I will be purchasing my first property soon. I am in the Northeast, and was wondering if it would be smarter to purchase a three-family home, live in one unit (for 12 months w/FHA) and rent the other two out, and then purchase my first single family when school gets out in 2019...or buy a single family home first and then refinance w/cash out and purchase an investment property? I have three children and I'm concerned about them switching schools too many times within a short period of time. So, the areas that have many of these three-family homes for under 200k are in some of the worst areas. Then again, there are hidden gems. My point is, I am unsure what I should do first, and I have gone back and forth in my head for months now. I can some advice right now! Thanks!
I think it comes down to how much cash you have for a downpayment. If you can find a 2-4 unit within your budget (I assume 3-5% down if you're using FHA) and in a safe neighborhood, you should definitely do that. Just make sure you save some cash in reserves, as you may need it for managing the other units.
If purchasing a 2-4 unit spreads your finances too thin, then go with a smaller SFH in a safe neighborhood. I would encourage you to treat the SFH like a rental though, and try to purchase one that would cash flow if a tenant were in it. This will make the transition to house hacking your next property much easier.
Best of luck!
@Tijana Flowers-Harris Everything boils down to your personal and financial situation/flexibility. Regardless of what you buy, you will have to treat it like a business. Therefore, run the #s thoroughly to ensure that you are positively cash flowing on the property.
Assuming this is your first purchase, look towards investing in a safer neighborhood with a more "stable" property. This will help you in getting your feet wet and give you momentum as you start buying more properties.
Best of luck!