After a heart-to-heart conversation with my realtor and myself, I've come to the conclusion that the multi-family space may not be for me...at least right now.

It appears that in my area virtually all the multi-family properties are in "C" or "D" neighborhoods, and mostly right on the border of each other. I'm looking for more of a "B" / "C" borderline area. With that said, I'm seriously considering (even though I was previously against it) buying 3/2, or similar, single family homes.

Here are my thoughts:

PROS Price: Based on my somewhat limited cash resources at this time, I can get into a property for quite a bit less than multi-families. Exit Strategy: In the event I ever get into trouble or want out, a 3/2 is likely much easier to unload than a small multi-family. Gaining Experience: I think this might be an easier entry path from a first time investor standpoint to gain valuable land lording experience. Ratios/Rules of Thumb: Buying foreclosures in this area should still allow me to achieve some of the general rules of thumb and generally accepted financial success ratios. Rate of Expansion: Since these single family homes will be less expensive than the multi-families, I should be able to acquire more properties more quickly.

CONS Cashflow: Even though ratios might be better, monthly passive Cashflow dollars will be less. Vacancy: If my 3/2 is vacant, I have 100% vacancy versus a multi-unit where that might only translate into a 25% or 50% vacancy. Competition: It seems like there may be more investors/flippers interested in the single family foreclosures vs multi-units. Rehabbing: Chances are many of these single family homes will need some major work. Do I really want to have to get into the whole ARV thing?

As I continue to ponder what the right next move for me, I also don't want to experience paralysis by analysis. If I were to move forward on the 3/2 approach, here's what my game plan is:

1.) Search for foreclosed homes generally within 1 hour of where I live that are in my budget.

2.) When I find a qualifying property, run some numbers on market rents, crime, etc. for that area to see if if will even be a feasible investment.

3.) Have my realtor get us in to the property to take a quick look at estimating any sort of work needed. Basically, do I just want to run the other way, or is it ultimately worth getting a few contractor bids for the repairs?

4.) Make offer on property with property inspection to my satisfaction contingency clause (assuming that's allowed).

5.) Negotiate. Get an inspection. Get contractor bids. Close the deal. Get to work. Rent it out.

6.) Wash. Rinse. Repeat.

HELP FROM BP NATION: What I would like to hear from all of you are your opinions on my pros/cons (did I miss anything, am I way off on anything), your opinions on my next steps, and either a slap on the wrist to fix some things or a kick in the behind to stop talking and get moving.

Thanks in advance, everyone! You have no idea how much this will help me. I will give back one day when I am in a position to help others and add value.