First Fourplex

[Pedro Plencher]

Hi everyone, I'm a military veteran and I have yet to do my first real estate deal. I really want to purchase a fourplex to get my feet wet. My plan is to get a VA loan so I have zero down payment, live in one of the units, and rent out the other three. Since I am a newbie there are some questions I have about this. For instance, how much cash should I have in reserve? Is it better to go through a real estate agent or for sale by owner? Should I start with a duplex rather than a fourplex? I know this might be a lot of questions for one post, but I do appreciate all the feedback, thank you!

[Rob L.]

Hey Pedro,

Congrats on asking the right questions to get started on your first property. Reserves is really up to you and it depends on what enables you to sleep soundly at night. Most banks ask for 3-6 months of reserves so that may be a good buffer or starting point for you. 

A deal is a deal so if you find a FSBO or something on the MLS doesn't matter in my book as long as the numbers make sense.

Duplex or fourplex....So you have two main things to consider here, cashflow and location/yardage. Around my area you can find nice two families in good areas with nice yards. But, its difficult to find one that will cashflow even after you move out and rent both units. Where most 4 families will cashflow but you may be giving up having a yard and it may not be located in the nicest area. Again, this is all local but if your looking to invest then I would go bigger and focus on the cashflow each property puts out.