A lot of people know I own eight houses in Seattle. Over the past decade, appreciation on those houses is how I reached financial independence. But these days I would rather introduce myself as a multifamily developer.
Because the money I made on those eight houses came mostly from luck the era handed me.
If I could go back ten years with what I know today, I would not buy single-family houses again. I would buy multifamily buildings, and buy them earlier.
What follows is the investing framework I assembled slowly, over ten years and more than a million dollars in mistakes.
The Past Decade Does Not Prove Single-Family Is a Good Investment
The past ten years in US housing was an extraordinarily rare appreciation cycle.
Seattle's home price rose from $357,000 in 2015 to $764,000 in 2025, a 114% gain in ten years. That is emphatically not the historical norm.
Look at the Case-Shiller index. Over the past 40 years, US home prices compounded at 4.3% annually, which works out to roughly 50% per decade.
Seattle's exceptional decade came from three things: historically low interest rates, high inflation following the pandemic, and rapid expansion of tech employment in Seattle. Together those produced the 114%.
The question is whether the next decade reproduces those conditions. Will mortgage rates sit at 2% for years? Will Seattle tech employment expand at that pace again? Will high inflation return? I suspect most readers share my pessimism on all three.
That is the central risk of single-family as an investment vehicle: the money you make comes fundamentally from another buyer being willing to pay more. What determines your return is the market and luck, not your own capability.
Same $1 Million: A Ten-Year Ledger for a House vs. a Fourplex
Suppose ten years ago two investors each spent $1 million. The first bought a three-bedroom single-family house. The second bought a fourplex containing four two-bedroom units.
The house appreciated 114%, from $1 million to $2.14 million, for $1.14 million in paper gains.
Meanwhile, Seattle two-bedroom rents rose from $1,415 in 2015 to $2,671 in 2025.
Over ten years, the single-family house generated roughly $327,000 in gross rent. Assuming operating expenses at 30% of rent, after property tax, insurance, maintenance, vacancy, and management, cumulative net rent over ten years is $229,000.
The fourplex, with four two-bedroom units, generated roughly $932,000 in cumulative gross rent. Even assuming a higher operating expense ratio of 40%, its ten-year cumulative net rent still reaches about $559,000.
On cash flow alone, the fourplex produced $330,000 more net cash than the house.
Total it up. The house delivered $1.14 million in appreciation plus $229,000 in net rent, for roughly $1.369 million.
The fourplex does not even need to appreciate 114%. It only needs to rise 80% over ten years, from $1 million to $1.8 million, and combined with $559,000 in cumulative net rent it matches the house. And if both properties appreciated identically, the fourplex would finish $330,000 ahead.
The conclusion is clear. The fourplex does not need to beat the house on appreciation. It only needs to not lose by much, and the extra cash flow can carry its total return past the house.
The Quality of the Return Differs: Paper Wealth vs. Real Cash
The two assets also produce very different qualities of money.
Most of the gain from a single-family house exists only on paper. Unless you sell or refinance, that money never actually reaches your bank account.
Fourplex rent, by contrast, is money that lands in the account every month. It helps you cover the mortgage, taxes, and repairs, which makes the asset easier to hold.
Many investors ultimately cannot hold a property, not because it lacks long-term value, but because it demands cash every month. On paper they get richer while the cash in the bank keeps shrinking.
Why Multifamily Is a Business, Not Just a Building
More importantly, single-family and large multifamily are valued on entirely different logic.
What a house is worth depends on what similar houses nearby sold for. A large multifamily building is closer to a business. What the buyer is purchasing is not the structure but a system that continuously produces income. Its value is not derived from nearby sales but from NOI divided by cap rate.
Take a 100-unit building with $1.5 million in annual NOI. If comparable properties trade at a 5% cap rate, the building is worth $1.5 million divided by 5%, or $30 million.
Now suppose I raise occupancy, improve management, increase rents, and add ancillary income, lifting NOI from $1.5 million to $1.8 million. The building's value rises from $30 million to $36 million. I created $300,000 of additional annual net rent and $6 million of additional value.
Single-family appreciation depends primarily on external market conditions. A large share of multifamily value can be created through active operation. Every dollar you add to NOI gets multiplied dozens of times at the market cap rate.
Multifamily carries risk too, of course. If rates rise and market cap rates move from 5% to 6%, the same $1.5 million NOI supports only $25 million instead of $30 million. But the key difference from single-family is that you can at least raise NOI to hedge part of that market risk. A single-family owner cannot do much to make the house next door sell for 20% more.
So a house is primarily an asset priced by the market. A large multifamily building is a business you can operate, optimize, and actively create value in.
Why I Use a Fourplex for the Comparison, and Where Scale Comes From
I should explain why the entire comparison uses a fourplex.
Because ten years ago, with the capital I had, choosing between a single-family house and a fourplex was a real choice. Buying a 100-unit building was not.
In investment terms, holding project quality, price, and management capability constant, more units produce more obvious scale effects.
If one unit in a fourplex goes vacant, you lose 25% of the income. If one unit in a 100-unit building goes vacant, occupancy moves by 1%.
Larger buildings also spread management, maintenance, insurance, security, common-area, and staffing costs across more units. Their potential buyers are no longer just individual investors but real estate funds, insurance companies, REITs, and other institutional capital.
It stops being a house and becomes an operating asset that institutions can finance, price, and trade. That is why buying another fourplex no longer satisfies me today.
How Ordinary Investors Participate in Multifamily
At this point many readers will say: I agree with the logic, but I do not have tens of millions of dollars, so how do I buy a 100-unit building?
In practice, most people participate in multifamily not by buying an entire building but through real estate syndication.
In simple terms, a professional team sources, finances, develops, operates, and manages the project while individual investors contribute capital and hold a proportional share of the returns. That gives you access to large multifamily assets that were historically available only to institutional investors.
One caution, though. Not every syndication is worth investing in. Two apartment projects can look alike while one builds wealth and the other costs investors dearly. Project quality, sponsor capability, debt structure, development cost, and exit strategy all directly shape the outcome.
So I do not want anyone finishing this article and rushing into a syndication. I would rather you first build the correct framework: why multifamily creates long-term wealth more reliably than single-family. Once that foundation is clear, you will know how to select projects and control risk, instead of chasing whatever IRR appears on a marketing deck.
If you want to see what a real project looks like, I publish the cost structure, schedule, and return modeling for the modular multifamily projects I am currently developing, which you can use as a reference point when evaluating other syndications.
As for how to judge whether a specific syndication is worth investing in, how to evaluate a sponsor, which returns are credible and which are fantasy, I will address that separately, drawing on my own years of development and investment experience.
