First Time Home Buyer: Apartment vs Single Family Home

OP

Member since 2019 · 7 posts · 0 votes

I did not know! I guess watching Friends did skew my words a bit LOL but I do appreciate you insight. Thank you!

Jeff Zimmerman

Real Estate Agent · Fresno, CA · Member since 2014 · 368 posts · 174 votes

Hey @Cristian Garibay , congrats on getting started. The answer to your questions are like most RE questions, "it depends". in Fresno I typically steer people away from townhomes for investments, the reason is that most renters and future buyers (when you choose to sell) prefer an SFH rather than a townhome and since you have more demand to rent/buy SFH's you will do better financially. Plus, you want to stay away from HOA's if you can help it, they are usually pretty expensive and can cause problems for you as an investor. additionally a 3bd sfh in a decent area of town will give you more rent since there are 2 other bedrooms to rent out.

another idea you could try is buying an MFH with a residential loan (just like a home loan) and living in one and charging rent in the others, that's a really good way to get started. I hope this helps.

are you in fresno or somewhere else in the CV?

1 Reply

OP

Member since 2019 · 7 posts · 0 votes

Hi @Jeff Zimmerman! Thanks for the response! Thinking more about it, a SFH does seem to be a better fit toward what i am looking to achieve. HOA's are expensive! But, as you mentioned, I am considering buying a MFH. Do you have any recommendations for qualities to look for in a MFH? As a first time buyer, would you say an FHA better suits me? or does a residential loan have its pros?

And to answer your question, I live in Modesto and looking at houses in this area.

Johnathan P.

Oxnard, CA · Member since 2015 · 7 posts · 4 votes

Hey @Cristian Garibay, just a quick pile on. I completely agree with @Chris Mason and @Jeff Zimmerman. I’m currently repositioning myself in life to be effective in the investment game. Part of that is getting out of two places that were’t good investments and were purchased using the typical mentality of a home buyer. Funny enough, the one in Florida is called a townhouse because you own the property just outside the unit. The one in California is called a condo and the community owns the property just outside the unit, we just have exclusive use of it. Regardless though, they are both obviously under HOAs which can complicate things (it has for me). Also to corroborate what was said, they haven’t appreciated as much as the single family places around them and are beholden to the HOAs. If you can find a multi family in a neighborhood you would feel comfortable leaving your future wife alone in and it pencils out financially, that would be great (I’m having a hard time finding those in Fresno). Also, of course it all depends on the situation but I wouldn’t recommend going with a 2 bedroom either for your situation, unless you could possibly renovate it to make it into a 3 bedroom 2 bath. That could be a good value add! Avoid some of the mistakes I made before discovering Bigger Pockets, it can take a long time to recover from.

OP

Member since 2019 · 7 posts · 0 votes

@Johnathan P. thanks for the input! I definitely want to avoid making a mistake, but I'm sure you learned tremendously from it. Im definitely going to consider going with a 3 bed instead. I appreciate your knowledge!

Jeff Zimmerman

Real Estate Agent · Fresno, CA · Member since 2014 · 368 posts · 174 votes

@Cristian Garibay sorry for the late reply. as far as qualities in an MFH, it's always good to know first and foremost what the rents in each unit are at to make sure it will put some money in your pocket each month after you pay expenses, especially with one unit "un-leased" since you will be living in that unit. second, i like to look around at what other units are renting for in the same area, if they are higher that means you have room to move yours up too (which sometimes means improving the units, but this is based on the comps in the neighborhood), if yours are the same as everyone else then you will know that they are stable and can move up every year 1-3% due to inflation, costs of living, etc... If yours are higher than everyone else that means you have the best place on the block, which is good for a lot of reasons but could also mean it's hard to replace a current tenant at the same rent when you do a turnover, as there is a chance that most people in the neighborhood can afford your rents.

a conventional, residential loan is the best way to go to win a deal as sellers prefer them, they come with fewer stipulations for the seller. an FHA loan is better for you because it usually comes with a lower interest rate and less money down, it may be smart to be pre-qualified for both and then you can decide which to use when making an offer. I hope that helps, feel free to message me if you want to continue the conversation.

OP

Member since 2019 · 7 posts · 0 votes

@Jeff Zimmerman thanks a bunch! Ill make sure I look for these qualities during my search. I’m in the process of getting approved for a loan, so I’ll definitely see which numbers play out better for my situation. I really appreciate your willing hand to reach out to you.

Jeff Zimmerman

Real Estate Agent · Fresno, CA · Member since 2014 · 368 posts · 174 votes

@Cristian Garibay great, let me know if i can help further.