Live in flip or multi-unit apartment complex as first purchase?

5 Replies

Hello all!

I am looking for advice. I am looking to purchase my first home and obviously want to make it some type of investment. I am debating between buying a live-in flip or a 2,3,4 unit apartment complex and living in one of those units. Does anyone have any advice? What to look out for/avoid? I live in suburban Philadelphia. Thank you everyone!!


Go for a 4 unit!

Depends on if you want cash or rental estate. 

This one is kind of hard to answer without having more information. What is your goal? Buying a multi-unit could be a good investment for you, long term. You will reap the rewards over the course of 30 years... unless of course it's totally run down and vacant. And you plan on rehabbing it yourself and getting solid tenants in it. And then selling it after you do that to get your cash back plus any profits you created. 

Buying a flip is a short term goal and will create a small amount of wealth over the near term. So you would put potentially the same amount of cash into it but you would get it back when you go to sell it in a few months or year. So you would have more cash on hand flipping a property as opposed to investing it in a multi-unit where it will sit for years. 

Of course, buy and hold investing creates the most wealth. Over a period of 30 years you should earn inflation rates at minimum but if you buy in a good area will reap appreciation too. 

People who flip properties are looking for a quick buck where people who buy and hold are in it for the long haul. These two strategies require different mind sets. I would first determine what your goal is, and then get a little more educated on the strategy you choose. 

There is a distinct difference between a home and a investment property. A home is a liability not a investment.

I believe you are looking to invest not to purchase a home. A flip is extremely difficult to live in, it is messy and disruptive. Ideally a flip should be done quickly, taking only a few months and then be back on the market for sale. Every day you hold the property you are losing money.

A multi plex on the other hand purchased to live in one unit is the best possible approach to begin investing. It is not your home you are simply one of the tenants of the property. You get cheap financing, live there for a year and move on to the next all the while earning a return on every unit rented..

Personally, I would use the "house hack" method. I would purchase a triplex or fourplex with a veterans loan (which I qualify for) then live in one unit and rent out the others.

What's better than owning my own place then having other people pay for it?!

After a few years just refinance for a single family house with a home equity loan and move out of the fourplex. Keep the multifamily investment property and start growing your real estate portfolio.

I really simplified this example but the idea is still the same.

@Sophia Morris You hit the nail on the head. My husband and I have 2 completely different mindsets. I am looking for long term cash flow and taking advantage of all 4 wealth generators with buy and holds. While my husband is looking for the quicker buck with flipping.

Hi @Phil Sabella - As the rest mentioned, I would house hack. If it were just me and my husband, that's exactly what I would do. Or you can always get into a home the more affordable way with an FHA, live there for a year and do whatever upgrades you want to do. Then rent it out, and rinse and repeat onto the next house.

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