Looking for some advice before jumping in

4 Replies

Hello all, First I would like to give you a rundown on my situation. I'm interested in investing in multi family, have been for a while just haven't taken first step quite yet. I've been spitballing ideas a little and not sure which route Would be best to take. I'm definitely set on multi family properties but not sure if I should jump right into it. I also might get into flipping eventually due to construction background. I currently pay rent living in an apartment with my wife and kids, but I plan on buying first property in the near future. So my question is, should I either; 1-start off by buying a home for my family, move into and renovate, build equity, refinance/sell, reinvest. 2- buy multi family and continue renting to tenants, collect and stash away the cash flow from property, reinvest or 3- buy multi family property and live in one of the units, renovate and build equity. Plus I can save money due to low balance on remainder of mortgage after collecting from tenants, and reinvest. Any and all suggestions welcome Thanks.

@Joshua A. Lenninger

Personally, I like option #3, but everyone's situation is different. Multis tend to require a higher up-front investment. Also, good multis are sought by many investors, so the market is crowded with people who run the numbers.

It appears you definitely want to do a flip. So why not go with the lower bar for entry? If you can manage that, you know you can do it again with a multi.

I agree that #3 would be the best option.  Look into whether there'd be a tax advantage, as well.  

I like #3 as well.

My wife and I did option #1 back in 2006, except we held onto the home and now rent it out. That worked out well enough. But, if I could do it all over again, I would have bought a duplex or even a fourplex, lived in one unit and rent out the others. By living in the property, you can get an FHA loan. Today, it is possible to get 30 year mortgages at 3-4%. A mortgage like that on a duplex or fourplex would be sweet.

@Joshua A. Lenninger

I also vote for #3. If you can find a nice multi-family that will work for your family, go for it. It is low-risk and a good first step into Real Estate.  You get the benefit of a low down payment and a great rate because you are going to occupy one of the units. That being said, a typical duplex or 4-plex has 2 bed, 1 bath units that aren't suitable for a family usually. So you might look at older houses that have been broken up into a number units or a situation like a house and cottage in the backyard that you could rent out.

If you wife doesn't agree to that strategy, I have been able to get started by buying "cheap" run-down houses, renovating, refinancing and turning them over to a property manager. By the end of the process you have very little or no money left in the property and you can go and do the next one.


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