Investor · Los Angeles, CA · Member since 2017 · 7 posts · 1 vote
I am a newbie investor hoping to buy and reposition my first multifamily property (4-8ish units) and then refinance it after a year. My background is in nonprofits, front-end web development, and marketing.
Like many on here I would love to reach a point of having financial freedom so I can invest more time and money in what is important to me. Also, I am passionate about communal living so I would love to have at least one property that I hold onto and live in and establish a more intimate community around shared meals and other activities.
As San Diego is such a competitive market right now, I'm researching other markets I can invest in. Since I have job location flexibility, I am hoping to live a year in my first property to get some experience overseeing it.
Excited to connect with people from this community, especially those interested in tag-teaming on some market research for good locations for investing!
Congrats. There is a big Commercial RE show in San Diego (CREF), Sun-Wed @ the Marriott Marquis. It may be worth going to, lots of speakers & information, lenders and related services at the expo.
Congrats. There is a big Commercial RE show in San Diego (CREF), Sun-Wed @ the Marriott Marquis. It may be worth going to, lots of speakers & information, lenders and related services at the expo.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
8y
One thing to consider is 1-4 units are considered residential whereas 5+ units are considered commercial. This make a big difference in terms of getting financing for a property.
Investor · Los Angeles, CA · Member since 2017 · 7 posts · 1 vote
8y
Thanks @Brian Napierala for the info about the show! I will definitely look into it.
@Aaron K., thanks for noticing. This is something I've been thinking about. Say I have 20 - 25% to put down. For a first-time investor would you have any recommendations for whether to start with a residential or a commercial property in terms of ease to finance and manage?
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
8y
Hands down residential will be easier to navigate, will have better financing terms and overall be more familiar (ie 30 year mortgage no balloon payment). Management will be more or less the same either way except one would have more units.
I am sure there are several schools of thought about that one & a laundry list of pros/ cons on both. I like the idea of residential units. There are more out there, more opportunity & choices and its more relateable (we all need someplace to live). Do your own research, find out what's available and what you like. Of course, talk to other investors once you decide so you can be aware of some of the pitfalls.
Investor · Los Angeles, CA · Member since 2017 · 7 posts · 1 vote
8y
@Aaron K.@Brian Napierala Appreciate hearing your takes on residential vs commercial. I was learning more towards residential as well for my first and then maybe getting a commercial property later on.
Investor / Syndicator · Austin, TX · Member since 2015 · 366 posts · 220 votes
8y
Welcome Jessica! I think you're right on in thinking about MF investing! The space between 5-20 units can be perilous ground. There is a reason investors call this the dead zone of investing because you have a lot more liability and costs due to this being a commercial investment, but not the scale. I think it's a good strategy to get as many 2-4 units as you can get, then jump into larger apartments. And yes, looks like you're probably going to be looking at other markets so you'll want to network. I think the midwest and TX are good places to look.