Need opinion
Would it be better to buy 3-4 single family homes to fix alittle then rent them out and sell later for profit, or 1 4plex and rent it out.
In the famous words of Archer... Either!?
It depends on what your goals & time are. What your financial situation is. What your local real estate is like. A little more information is always helpful. For a beginner, I would recommend a 4-plex because it is the largest multi-family unit that you can get with a FHA 3.5% loan. It will teach you the ropes of being a landlord & everything will be close at hand so you can keep a eye on it.
Im in the sacramento area. If i went with the single family homes i would be able to profit off their sales alot more awhile down the line compared to the multi right
Supposedly, but depending on appreciation is a fools game. In my opinion. Though I hope for it, I do not count on it.
Hi Marcos,
A couple of things to think about when you compare SFR and Multi for rental income properties:
When a SFR is empty, it is empty and you are not getting any rents, but expenses still have to be paid. Also, is the SFR an executive home or what I call at "labor" rates. The reason is you have more "customers" when the SFR is at labor force levels versus executive level.
With a multi-unit, providing you can purchase it at the right price, you can have a vacancy and still pay your expenses (always bake this into your numbers when considering the purchase). Multi has many revenue streams.
Overall, it is not just about the quantity of SFR vs. Multi. As Rusty stated above, you need to know your goals and what you are striving for. If you are wanting to be a flipper, then stay in that niche. If you want to be a landlord, then be a landlord. Understanding both will help you determine what fits you.
Lastly, "profits" are not realized until the money is deposited into your bank account. You can either have immeditate positive cash flow with rents (providing the numbers work), or you can "hope" on a profit somewhere down the line when you sell the property and realize appreciation.
Give it some thought on where you want to play and how you want positive cash flow to work for you.
Say i bought a home for 50k and later i could sell it for 150k. That would be a 100k gross profit right? i heard something about yearly depreciation on a home but does that affect anything
Im looking to have multiple 2+unit rentals and i was wanting to be a flipper at the same time.
Then start with a Multi to live in and manage with a good positive cash flow that will only cost you 3.5% down, and pursue your flipping carrier. But remember, what every you buy, make sure its a deal. Or you could destroy your investment career before it even starts.
You might also consider reading Marks paper on financing investment properties found on his blog. Good stuff
http://www.mortgagesbymark.com/blog