Researching to get get in the door.

[Jason Brown]

I'm interested to get in REI and want to know if it's better to get a single unit property or a multi unit property for the first purchase. Also is seller financing a frequent occurrence or a pipe dream for someone with not a lot of cash on hand?

[Kyle Hjelmstad]

Hi Jason,

Just a newbie myself so I can't really answer your questions but, I just wanted to say hi and wish you luck on your journey!

[Nathan Murith]

Hey @Jason Brown and @Kyle Hjelmstad, welcome to BiggerPockets and congratulations on doing the work!

It really all depends on your level of comfort really. There is no right or wrong answer here and really depends on what your investment goals are, the market, desired returns, etc.

That said, I have always liked starting with a single-family home. I say that because it typically is easier for someone getting started to comprehend. They are either familiar with them through their own primary home, something they’ve rented, etc. Single-family is also typically easier to understand because it is 1 address, 1 tenant, 1 roof, 1 heating and cooling system, 1 plumbing system, 1 kitchen, etc. With a single-family home you do not need to worry about whether utilities are your responsibility or the tenants, you typically have fewer expenses (you do not have to do snow removal or lawn care on a single-family).

With single-family homes (and small multis up to 4 units) you get more financing options and better financing terms.

Those are some of the reasons, I like starting with single-family, but again, it depends a lot on your level of comfort, level of experience in real estate, investing goals, etc.

I do not think seller financing is a pipe dream, but I would say it is that frequent either. Those who are most successful with closing seller finance deals are active investors with pretty sophisticated marketing machines to find and target those home owners that might be a good fit for seller financing. I wouldn't say it's complicated stuff, but it does require different skills for finding and targeting the appropriate people, great communication skills, good negotiation skills, different state-specific contracts and paperwork, etc. Simple way to say it is seller finance deals are not all over the MLS :-)

There are a few folks (including BP podcast guests) that started with seller finance deals, but I would say that is more the exception than the norm.

FWIW, we love and primarily invest out-of-state in single-family buy and hold. Happy to share any and all mistakes, successes, tools, tips, tricks, we loved when getting started and still use today.

Do not hesitate to reach out, connect, and DM me.

[Lexey Vezzoso]

Hey Jason!

Whether or not to do single family or multi unit property depends on how the numbers pencil. I have talked to a lot of people that wish that they had just skipped single family and gone straight into multi units. However, if you start small with single family I believe it will help you learn all of the ins and outs of investing. 

As far as seller finance goes, it is out there and it will likely be more prevalent with our market heading in the direction it is. The thing about it is usually you have to ask if people are open to the idea. They usually aren't going to suggest it to start. 

I hope this helps!

Good Luck!

-Lexey 

[Jeff Campbell]

I think it depends on your financial situation on whether or not a single family or multifamily will be the best for you. Multifamily could be more expensive with having more to take care of, but that really depends on the condition of the property.

As far as seller finance goes it is definitely out there. I own several owner finaced properties and I think the most important part is for you to show the seller confidence that you can make the payments and keep the property in a great condition until it is paid in full. Congratulations on deciding to get into REI.