four-plex vs six-plex

Rehabbing, Fix and Flip, Rental Properties
1

Hi,
I am going through my first process of renovating a large single-familiy unit into a multi-family (Houston). I am trying to decide if to do a four-plex (3 1-bedroom and one 2-bedroom + laundry) or a six-plex(5 small 1-bedrooms and 1 2 bedroom. No laundry). The market area calls more for a 1-bedroom apartments and that is the reason I would like to do the 6-plex. Questions:

  1. Is it the approval from teh city of Houston MUCH more difficult for a six-plex?
  2. What about dwelling/fire policy? More expensive in a six-plex? ANy recommendation on where to get insurance?
  3. will both require “certificate of occupancy”? Is this difficult to pass?
  4. Is the laundry idea really profitable? or is more of a pain?

Thanks a lot in advance

Claudia

2

I can tell you that refinancing will be easier with a 4 plex than with a 6. Management will be less of a hassle, too.

3

1 Bedroom apts. have a higher turn over rate and higher vacancy rate than 2 bedrooms. The smaller the 1 bedroom unit is the higher the turnover rate and vacancy rate.

Adam is correct. Financing will be easier on a 4plex.