Buy-Box Question from a Beginner Investor

[Ethan Slater]

Hello! I am a beginner investor, who has spent the last few months learning about REI. I am ready to take action to purchase our first investment property and am seeking some guidance on the specifics of building a "buy box."

Question: Having decided on a specific investment market, Is it wise/feasible to build a different buy box for different parts of the same city? I recognize this question probably ultimately boils down to investment strategy.

For more context: I just found out I am starting residency this upcoming summer, so my family and I will be moving to Houston, Texas. As we think about purchasing our first investment property, we want to harness the power of owner-occupied strategies (and the VA loan as I am active duty Air Force). We are considering either: A) House Hacking by purchasing a small multi-family property or SFH with ADU/DADU OR B) Purchasing a SFH and performing a light, live-in flip (small, cosmetic-type renovation to gain some reno experience). Our long-term goals involve holding quality assets for many years.

Follow-Up Question: Is it wise to build a buy box for small multi-family units in certain neighborhoods/zip codes, while simultaneously building a different buy box for SFHs in another part of the city? I recognize that I will certainly need to contact a real estate agent in the area, but I first want to start analyzing deals to gain some more first-hand knowledge of the local market. Maybe I am trying to bite off more than I can chew, but I would like to toss a wide net to find a property/deal that fits our long-term goals.

Any and all advice would be recommended as we begin our real-estate journey! Thanks.

[Cameron Tope]

Hey Ethan,

I'm not sure what @Jason Wray is talking about - Houston was NOT built out with a lot of multi-family properties. 

The majority of 1-4 MF are in super expensive areas like Montrose, less desirable areas outside of town, or new developments which haven't proven their long term attraction. 

Instead of looking for 1-4 MF or SFR, I would look for a desirable area that you would want to live, with great schools.

I see a lot of investors go for the cheapest property, and get burned. 

Remember Warren Buffett's quote - "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price".

Same goes for rental properties. 

Best of luck!