Many investors are interested in residential multi-family properties. Some want to house hack by living in one unit and renting the rest. Others want all the cashflow by renting all the units.
Part of what makes residential multi-family units attractive to investors is that properties with up to 4 units are considered residential and are able to be financed using residential loans rather than more expensive commercial loans.
In the Raleigh, NC market, these residential multi-family properties can be hard to find due to zoning regulations that severely limit where multi-family properties can be built. But that is recently changed with the passage of new zoning regulations which permit multi-family housing to be built where only single family homes were allowed. In the short term, this provides a great opportunity for investors looking to convert a single family home to multi-family. As inventory of multi-family homes increase, investors looking to rent out units will have more choices.
When considering a multi-family investment property:
* More doors means lower vacancy rates - if you have a duplex and one renter leaves you have a 50% vacancy rate. But with a quadplex, one renter leaving is only a 25% vacancy rate.
* House hacking a duplex is not enough doors to fully eliminate rent for the live-in investor. A quadplex is far more likely to cover all the rent.
* When living in one of the units, an investor can qualify the property as their primary residence so additional financial options become available - like FHA mortgages with low down payments.
With inventory of multi-family homes in Raleigh, NC being limited, an alternative to a multi-family property is to buy a single family home and rent out rooms. This can be very profitable assuming you don't mind living with strangers.