There's a fourplex on Georgia Street in North Park that traded last year for just under $1.6M. I watched that deal closely. The new owner is cash flowing, and I want to explain why, because most people assume that's impossible right now.
The math isn't magic. Four units, each pulling roughly $2,200 a month in rent. That's $105,600 a year gross. After a 25% down payment and today's rates (call it high sixes), the mortgage, taxes, and insurance land somewhere around $8,400 a month. You're left with a thin margin. But thin isn't zero. And thin on a fourplex in North Park, a mile from craft breweries and two miles from Balboa Park, is a position most investors would take.
Here's where I disagree with some of my peers. A lot of agents will tell you to wait. Wait for rates to drop, wait for prices to correct, wait for some perfect window. I've been doing this for 25 years, and I've watched people wait themselves right out of generational wealth. The investors I've seen win bought when things felt uncomfortable. They bought the duplex in Hillcrest in 2010 that everyone said was overpriced. They bought the triplex on 30th and Dwight when North Park was still "up and coming." Those properties doubled.
Small multifamily (two to four units) in our neighborhoods has something working in its favor that spreadsheets don't always capture. Demand floor. University Heights, Hillcrest, North Park, Mission Hills. These aren't speculative markets. People want to live here. Vacancy rates in these pockets have stayed below 4% for years, per what I've tracked through CoStar and local MLS data.
The strategy I keep coming back to for investors right now is simple. Buy a small multifamily property you can hold for five to seven years. Lock in today's rents (which are strong). Refinance when rates eventually come down. Your cash flow improves without you doing a single thing to the property.
Will every deal work? No. I've also seen investors overpay on a "charming" duplex in Mission Hills that needed $200K in foundation work nobody budgeted for. Due diligence matters more than optimism.
That fourplex on Georgia Street? The owner told me he almost didn't write the offer. Said it felt like too much. I think about that a lot.