Would you buy a 4 unit for your first investment property ?

Question

Is it wise to buy a Four unit 400,000$ property for my first investment and live in one of the units?

Donald D Michna · Answer

@Steven Allen Jr I think purchasing a 4 unit property would be the best way to invest in multi-families if you are going to house hack as their is a greater probability of having your tenants pay your mortgage. Typically it is hard for your renter to pay for your whole mortgage when you have a duplex and depending of the property you may be just having your renters pay the mortgage with a triplex, but a 4 unit typically can pay for all expenses for the property. Depending on the location of the property, $100,000 per unit will provide you with a nicer investment, but will probably not cash flow very well unless you plan to purchase in a major metro. It is always easier buying something that is already fixed up, but you create real wealth when you can find a property that you can create equity. Creating the equity by fixing up the property to a better class or increasing cash flow by utilizing creative investment.

Good luck on your future investments!

Jesse Aiken · Answer

Absolutely! That is one of the major things I would do differently if I could do it over instead of starting with a duplex. 400k seems high but I don't know your market. I know it can be a little nervewracking if you don't have any experience, but I wouldn't worry about that because  you will learn just the same with 4 units as you would with 2. As long as the numbers work, it will be to your benefit to secure as many units as possible with that cheap 30 year traditional financing while it's available to you.

Stephanie P. · Answer

@Steven Allen Jr

In a heart beat.

Gregory Chadwell · Answer

If I could do it over I would definitely buy a four family I started with the duplex then a three family and then a four family and I now do 4 families and larger if one person moves the only missing one fourth-year income versus a duplex where one person moves are losing half your income plus with the price point on a four family your depreciation and you’re write offs are larger and later on your net worth is higher

Bjorn Ahlblad · Answer

@Steven Allen Jr As long as it cash flows and makes you money it is a great idea! Lower priced loan, easy access to tenants, good learning tool. Learn how to underwrite so you can measure expenses and profitability. Let us know how you make out.

Mark Burlison · Answer

Just  purchased a 4 unit from a lady that was doing exactly that. My plan in 4-5 years is to sell my house and move into one my units and purchase a out of state retirement house.

Aaron Stuiber · Answer

Absolutely!

Being able to take advantage of loan programs that are specific to first time investors is huge.

Besides the loan advantage you're getting to live RENT FREE!!! For many that's a dream come true so having the opportunity to be a live in manager, live for free and make some money on the side you're hitting all the right targets.

In the Milwaukee market $400K for a 4 family is slightly high for our area but depending on where you're from I could see that being a great opportunity. See if you can add some value to the property to gain equity and make it rain when you re-fi.

Best of luck!

Would you buy a 4 unit for your first investment property ?

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