The Kickass Entrepreneur
  • About
  • Blog
    • All Blogs
    • Create Wealth (Investing)
    • Entrepreneur Interviews
    • Featured Top Posts
    • Growing Profits
    • Growing Revenues
    • Marketing
    • Positive State of Mind
    • Real Estate Investing
    • Retirement
    • Sales
    • Selling your Business
  • Book
  • Courses
  • Podcast
  • Resources
  • Contact
The Kickass Entrepreneur
Subscribe
The Kickass Entrepreneur
  • About
  • Blog
    • All Blogs
    • Create Wealth (Investing)
    • Entrepreneur Interviews
    • Featured Top Posts
    • Growing Profits
    • Growing Revenues
    • Marketing
    • Positive State of Mind
    • Real Estate Investing
    • Retirement
    • Sales
    • Selling your Business
  • Book
  • Courses
  • Podcast
  • Resources
  • Contact
  • Create Wealth (Investing)

What You Need to Know Before Investing in a Quadplex Apartment

  • September 6, 2021
  • 32.7K views
  • 7 minute read
  • Vaughn Torralba
Investing in a Quadruplex Apartment
Share
Tweet
Share

If you’re looking to commence your journey as a real estate investor, then instead of looking at the conventional options, maybe dig deep. Single Family Homes have proved to be a good investment, but Quadplex is proving a better investment.

If you’re looking for a house hack or seeking new property as a real estate pro, you should look into Quadplex, which could be the start of building wealth in your world.

What is a Quadplex?

A quadplex is a single building within which there are four separate units. Each unit is designed for a single family, meaning four families can live under the same roof in individual units in a Quadplex. A quadplex is sometimes known as quadruplex, fourplex, or four-flat.

If you’re familiar with duplex— a house based on two units— then you can imagine Quadplex to be double because it has four divisions. Even though Quadplex allows more families to live together, they are different from apartments because, from the exterior, they look like a single-family home.

There are also three-unit houses as well called triplex and 10 unit houses called 10-plexes. However, the special thing about the Quadplex is that it is the largest building you can purchase and still be entitled to a single-family mortgage payment. 

Advantages of Buying a Quadplex

Quadruplex Apartment

Buying a quadplex has many hidden benefits once you’re aware of the loopholes. So, if you’re on the verge of making the big decision, you might as well go through the advantages first.

1- Loopholes in Financing

First thing first: any residential building with up to four units meets the requirement for a conventional loan. To elaborate on this, you can acquire the same amount of loan to purchase a four-unit house as you can for a single-family home. This tactic has a tremendous benefit because the interest rate is lower once the federal government subsidizes these loans.

However, the minute you think of looking into a house with a plus one unit, you enter the world of commercial mortgages. Commercial loans are not the most suitable for anyone who is looking to gain maximum profits. There are several reasons behind this, including:

  • The interest rates are higher
  • The loan term is noticeably reduced
  • Down payments are larger
  • Not funded by the government, so you’re dependent on bank policies.

2- You can dwell in one unit

Quadplex, or any other house with less than four units, gives you the benefit of buying multiple units together with easy and cheap financing. For example, you can choose to rent three out and reside in the remaining unit with four existing divisions. In fact, choosing to live in your Quadplex can help you qualify for VA or FHA financing.

If you meet the FHA loan requirement, then you don’t have to worry about putting a considerable sum towards the down payment and can put as little as 3.5%. There is even better news for veterans because they have to put nothing down with the VA loan. These are some of the rare ways in which you can become a real estate investor without spending money.

However, make sure that your fourplex cash flows, even with low down payments. This reminder is vital because you can only generate profit if you’re making money while investing very little. 

Another excellent tactic hidden in this advantage is that your tenants can pay your mortgages while you don’t have to worry about a thing. This way, you will be living free, plus keeping the equity in mind that you’re earning from paying down the mortgage, you’re gaining $200 over the top. You’ve got to agree; this deal is far better than free.

3- Expand Your Portfolio

There are some rules regarding residential mortgages of houses with a maximum of four units for rental properties. Your job is to find loopholes in these rules to maximize your chances of cheap financing to add a flair to your portfolio. Of course, there is a limit to which you can acquire these loans, but once you cross that limit, you will have to revert to commercial financing.

Even when it comes to buying a single-family home, you will have to get entangled in more complicated ways of financing if you cross the loan limit. This is why it is crucial to invest cleverly. 

Think about it! If you invest in single-family homes, the maximum number of units you can get is 10 with a conventional loan system. However, if you invest in a quadplex, you can end up with 40 units.

The reason stated above is why, if you’re looking to build your portfolio by leveraging low-cost financing, then Quadplex is your best bet!

4- Not that Hard to Manage

This advantage is not huge considering there is not much to gain, but it is important to note that multi-plexes properties are cheaper to manage. For starters, you don’t have to invest large chunks of money in maintenance because you have four units under one roof, which saves you the trouble of driving to four different houses.

If you’re the property manager, it will be easier for you to maintain the house quality. Even though four families can reside in the house, there will always be one roof, base, front yard, and backyard. This benefit will allow you to keep track of a smaller footprint and maintain it without emptying your pocket.

Drawbacks of Owning a Quadplex

Quadplex Investment

With all the benefits listed, there is no doubt that Quadplex is a good investment. However, nothing is perfect, and there are some downsides to buying a quadplex as well.

1- Uncertainty about tenants

Usually, people would much rather choose to live in a single-family house than duplexes, triplexes, or quadplexes. In a separate house, tenants have more privacy, which means they last longer. Quadplexes allows more privacy than a large apartment complex, but it is pretty understandable why most people would prefer single-family homes.

Now let’s say you’ve found suitable tenants who prefer to stay in your quadruplex; it is a whole other to ensure compatibility between them. When more than one family has to live under the same roof, it is essential that they respect each other’s privacy and needs. However, ensuring that no clashes occur in the future is not that easy.

Apart from that, fourplex houses are usually not found in relatively well-off neighborhoods. On the contrary, they are primarily situated in lower-income neighborhoods, where investing money is usually an excellent start to building wealth. However, many people prefer to have tenants willing to pay a higher rent and sign a lease for a slightly longer term.

2- Dwelling with your tenants

We have already talked about the many advantages of living in your Quadplex, but now let’s look into the disadvantages. First, it would help if you remembered that this way, you’ll be sharing the space with your tenants and living next door to them.

Some property owners might now hate the idea, but it may not be the best situation for some. For example, if you’re a person who hates conflict— it will be hard to live with your tenants because you’ll know what they’re doing round the clock with your property. 

You may also reconsider if you are ready to always be in the landlord’s uniform because, let’s be honest, it can get taxing.

3- Hard to find

Quadplexes have many advantages, but it is not always easy to invest in them because there are not readily available. Many places have a scarcity of multi-unit houses, and it is mighty rare to find one for sale.

Mostly, quadplexes are available in lower-income areas, but investing in them may not be the best idea. The tenants in these areas expect low rents, which may not even meet your monthly threshold. Therefore, it is crucial to inspect the location and demographic before making any real estate investment. 

Is Quadplex a smart investment?

After weighing all the pros and cons for you, it should be easier for you to deduce that quadplexes are an excellent investment option for many reasons:

  • Quadplexes have plenty of rentable units.
  • By residing in one of the four units and renting the rest, you can live for free and earn on top of that.
  • Your mortgage payment is reduced considerably due to low-interest rates as they qualify for residential real estate rates.
  • Your rental properties portfolio can be built faster by purchasing four units instead of one at a time.
  • Managing the house becomes cheaper and more straightforward.

Renting vs. owning a fourplex

Today’s youth is stuck in a quandary of renting an apartment and owning. The truth is that there is no one answer to this question as they both have their own set of pros and cons. However, the good news with quadplexes is that you can do both. 

The option to give a portion of your house on rent is relatively a new one. But, multi-unit homes allow you to become rent as well as live under the same roof in separate units. As already mentioned above, living in your Quadplex has generous benefits, so this dilemma of renting vs. owning maybe just another benefit in disguise.

Bottom Line

After traversing through the good and the bad, we can safely deduce that buying a quadplex is a good investment for both real estate investors and residential buyers. 

There is no doubt that you will have to run more background checks on the building, location, and ultimately the tenants than you have to on a single-family home. However, it will also guarantee a steady flow of income. Apart from that, being an owner of a quadplex can give you unique advantages, unlike other landlords.

Thank you for your interest in THE KICKASS ENTREPRENEUR'S GUIDE TO INVESTING. Three Simple Steps to Build Massive Wealth with your Business's Profits. Please check your email to confirm the book download. Form: 400529

There was an error submitting your subscription. Please try again.

Related Posts:

  • How Do You Make Money Investing in Apartment Buildings?
  • What You Should Know Before Moving to a New Apartment
  • How To Buy An Apartment Building And Make A Whopping 110% In Three Years
  • How Much Money Do Apartment Building Owners Make
  • Experience The Charm of Lisbon: Stay In A Comfortable Furnished Apartment
  • What is ESG Investing and How Can You Get Started?
Share
Tweet
Share
Vaughn Torralba

Previous Article
person holding a blank business card
  • All Blogs

Is It Important to Stick To a Standard Size Business Card?

  • September 3, 2021
  • Rene
View Post
Next Article
Executive entering data in a laptop at office
  • All Blogs

How to Manage Business Data for Better Revenue

  • September 7, 2021
  • Rene
View Post
You May Also Like
man and papers
View Post
  • Create Wealth (Investing)

Active vs. Passive Investing: Which Is Right for You?

  • August 8, 2023
  • Meg Rivera
real estate agent
View Post
  • Create Wealth (Investing)

5 Key Strategies for Long-Term Success as a Real Estate Investor

  • March 28, 2023
  • Meg Rivera
property
View Post
  • Create Wealth (Investing)

13 Things That Will Increase The Value Of Your Real Estate Property

  • March 27, 2023
  • Meg Rivera
deck of folders with insurance word on it
View Post
  • Create Wealth (Investing)

Tips for choosing the right auto insurance coverage

  • February 17, 2023
  • Meg Rivera
Rising gold prices concept. Investment in precious metals in the stock market
View Post
  • Create Wealth (Investing)

The Pros And Cons Of Investing In Precious Metals

  • February 9, 2023
  • Meg Rivera
man looking at his tablet
View Post
  • All Blogs
  • Create Wealth (Investing)

These Are The 7 Mistakes Six-Figure Earners Make

  • January 7, 2023
  • Jeff Wiener
bitcoin
View Post
  • Create Wealth (Investing)

Why Invest in a Bitcoin Casino: Understanding the Crypto iGaming Business

  • December 22, 2022
  • Meg Rivera
money in grass
View Post
  • Create Wealth (Investing)

Getting an Affordable Home Loan for the Eco-Home of Your Dreams

  • December 22, 2022
  • Meg Rivera

Join 6,472 Entrepreneurs That Get My Business Building and Wealth Creation Posts by Email

I can teach you how to build a successful, profitable business, and turn that into millions in personal wealth.

Thank you for your interest in THE KICKASS ENTREPRENEUR'S GUIDE TO INVESTING. Three Simple Steps to Build Massive Wealth with your Business's Profits. Please check your email to confirm the book download. Form: 400529

There was an error submitting your subscription. Please try again.

We won’t send you spam. Unsubscribe at any time.

Recent Posts
  • man and papers 1
    Targeting Millennials: Real Estate Marketing Strategies For The Next Generation of Homebuyers
    • September 22, 2023
  • loan types 2
    Smart Borrowing: Determining How Much You Can Afford To Borrow
    • September 22, 2023
  • handyman 3
    Effective Strategies To Advertise Your Handyman, Landscaping, or Plumbing Services
    • September 22, 2023
  • happy woman 4
    Kickass Ideas to Maintain Customer and Employee Loyalty
    • September 21, 2023
  • Real estate broker agent presenting and consult to customer to d 5
    The Return on Investment (ROI) of Mortgage CRM Investments
    • September 20, 2023
Featured Posts
  • Become a Decamillionaire
    How to Become a Decamillionaire, Grow your Net Worth to $10 Million, and Join the 1% Club
  • how to become wealthy
    The Entrepreneur’s Secret to How to Become Wealthy and Build a Personal Fortune
  • Most Profitable Small Businesses
    27 of the Most Profitable Small Businesses to Open in 2023
Categories
  • All Blogs (1,077)
  • Business (410)
  • Canadian Financial Products (4)
  • Create Wealth (Investing) (134)
  • Entrepreneur Interviews (27)
  • Featured Post for Main Menu (4)
  • Featured Top Posts (23)
  • Finance (112)
  • Financial and Investment Calculators and Economic Data (118)
  • Fitness (9)
  • Growing Profits (72)
  • Growing Revenues (71)
  • Growing Revenues (115)
  • Marketing (161)
  • Millionaire and Business owner interviews (3)
  • Positive State of Mind (69)
  • Real Estate Investing (17)
  • Retirement (13)
  • Reviews (13)
  • Sales (16)
  • Sell Me This Pen (8)
  • Selling your Business (13)
  • Starting a Business (1)
  • Startup Ideas (18)
  • Technology (194)
  • Top Products (4)
  • Uncategorized (62)
Follow us
Author
Jeff Wiener
Jeff sold his company to private equity in 2017 and is now semi-retired. Jeff spends time…

    CHECK OUT MY BLOG, AND SUBSCRIBE

    about
    The Kickass Entrepreneur

    Expand Your Business, Improve Profits, Create Wealth

    Expand your business, improve your profits, and create wealth. Each one of the three can be elusive goals. Follow the right steps, and you, too, can create financial independence. It is possible … you just have to take the right steps.
    NAVIGATION
    • About
    • Blog
      • All Blogs
      • Create Wealth (Investing)
      • Entrepreneur Interviews
      • Featured Top Posts
      • Growing Profits
      • Growing Revenues
      • Marketing
      • Positive State of Mind
      • Real Estate Investing
      • Retirement
      • Sales
      • Selling your Business
    • Book
    • Courses
    • Podcast
    • Resources
    • Contact
    TAGS
    apartment BATNA Business business failure business growth business sale Capitalization Rate CAP Rate cash cash flow Creating Wealth Discipline entrepreneur entrepreneurship excel extra cash Featured goal setting Growing Business investing investment real estate M&A marketing Marketing KPIs Mergers and Acquisitions | M&A | Entrepreneur Blog Millionaire millionaire next door mistakes MUR Peter Principle Profit profitability real estate retirement revenue Revenues sales sales management Semi-Retirement Blog | Entrepreneur Blog | Small Business Blog small business Stagnant stocks success Thomas Stanley wealth
    RECENT ARTICLES
    • horse jockey
      Top 5 Most Successful Horse Racing Jockeys Ever
      • September 8, 2023
    • man and papers
      Active vs. Passive Investing: Which Is Right for You?
      • August 8, 2023
    • seoul
      How Seoul Internships Shape Your Professional Journey
      • July 24, 2023
    • casino
      Empower Yourself With These 5 Lifelong Skills For Success In Casino Business
      • June 23, 2023
    • Real Estate Brokerage
      Factors That Affect Real Estate Commission Rates
      • June 21, 2023
    • Digital online marketing commerce sale concept. Woman using tablet payments online shopping and icon customer network connection on hologram virtual screen, m-banking and omni channel.
      A Savvy Shopper’s Guide to Purchasing Power Tools Online
      • May 23, 2023
    The Kickass Entrepreneur
    • Coaching
    • Book
    • Blog
    • Contact
    • Privacy Policy
    • Terms
    • Disclaimer
    • Facebook
    • LinkedIn

    Input your search keywords and press Enter.