Is it better to buy one large or several smaller multifamily properties?

In the Los Angeles area. As example, 36 unit building vs. 3 12 unit ones. I am aware of on site manager issue. I'm most concerned with which (in general) would represent a better value in this market, which would appreciate more and which would be easier to sell later.
In Buying Property - Asked by Andrew T. - Jul 30, 2011
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Answer(s)

Steve C.
Broker/Agent
Lake Helen, FL

Buy the best property you can with the money you have to invest. If the large one was in a A location, good shape with good rental history then I would pull the trigger. Same thing goes for smaller units. Obviuosly you are going to have to do more due diligince to buy three properties so your costs will be more, but you will be diversifying you investment.

Jul 31, 2011
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Judy M.
Broker/Agent
Vancouver, WA

I always ask how long do you expect the hold the investment. I prefer to buy multiple properties so I can sell off a property when possible to acquire something else. It gives you more flexibility to sell or hold the properties in case you need to liquidate quickly. Finding a quality unit that gives you positive numbers is the challenege. All depends on your exit strategy and purpose for buying.

Jul 31, 2011
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Nick T.
Broker/Agent
Valencia, CA

Andrew, if you just starting in the business it is better to start with smaller units and start growing in more properties. Diversity is very important a lesson we learned three years ago. If you are an experience investor and you have the means to buy 3 x 12 units I would prefer that in different areas of your market. If the 36 units is in a very demanding area and room to grow and very low vacancy, then I rather 36 units. Good luck to you.

Aug 1, 2011
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Rob B.
Chandler, AZ

Andrew....
It is often said, "Don't put all your eggs in one basket". This has been an important statement since the time of our forefathers. Nothing much has changed. There are many advantages to having a diversified real estate portfolio.
However, make sure that in making your purchases of more than one apartment facility that you continue to consider economy of scale in property management and service contracts, as well as your own time in solving ownership challenges.
Onward and upward Andrew....
Rob Baird

Aug 3, 2011
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Gregg H.
Broker/Agent
Ontario, CA

It is harder to mange 10 units then 200 as long as you buy right. One roof ten unit expensive roof one roof 200 units. Roof expensive but lots more heads covered lots more money in the bank.
Gregg Holt
North South Realty

Aug 10, 2011
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Rob M.
Broker/Agent
Seymour, IN

Hello Andrew,
The best person to truly answer your question is a reptuable multi-family broker in your market. My advice from marketing properties, is the 36 unit property will be more attractive to would-be investors when you decide to sell. Also, the property will most likely be easier to obtain financing from a greater pool of lenders versus the smaller units. When considering management, your local broker should have a good idea of the economic threshold for hiring a property manager. Now is a great time to buy, good luck to you!

Aug 22, 2011
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