I'm 32, and I would like to ask for advise for a first time REI. What are the pros/cons of each options. I am currently in Alaska. Thank you all in advance :)
I started out with a single family because that made the most sense financially at the time. I've seen other investors start with a duplex and see great returns. The main thing to do is run the numbers on each deal.
Also, here is a BP blog that lays out the pros and cons of each:
I agree with what Tanvir said. If you can get into househacking at all, a duplex or Triplex could go a long way as you get 3 units for 3.5% of the purchase price if you go with an FHA loan.
Make sure you run numbers that aren't optimistic, I think I ran 50-60 homes I genuinely considered purchasing before I found one to make my first offer on. Then it was 6 offers later before I got one accepted.
Also, not sure where you live in Alaska, but I'd also be conscious of population size and if it fluctuates could effect your numbers at different times in the year.
More than anything, I'd see if there was a local Real Estate meetup in your area. You can ask these questions to those folks who know your market. Then plan your own strategy w/ more accurate information on what they said.
A good answer to your question will depend on many factors from your personal situation (income, longevity in one spot, goals, etc.)
That all said - house hacking a duplex or triplex is a no brainer in 90% of situations. Going the SFH or 4plex route would make sense for most trying to focus on an aspect of their FIRE or REI goals.
In short - tell us more and we can tell you more!
@Tanvir Sattar thank you
Hi! I think that whether you choose to start with SFH or Duplex for your first REI will all depend on the deal. You will want to make sure the numbers work for you. It will also depend on what method you choose to accomplish this. Will you be looking locally? If so house hacking could be a good option, especially with a duplex or bigger, or a SFH with a basement that you could finish out and use while finishing the upper level/s. If you are looking outside of your local market, what level of rehab are you comfortable with and do you have connections to that area?
@Joseph Atafua I always believe that house hacking is the absolute best way to start :) how you choose to do that is up to you but personally I find that buying a simple bungalow and adding a basement apartment is a fantastic way! Good luck!
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