First Property- Apartment vs SFH??

2 Replies

Hey Everyone, I am looking for some feedback and greatly appreciate any other helpful insights.

Currently in the Philadelphia Market - first time property investor. As I look to ease into buying real estate I am conflicted if I should consider purchasing a condo/apartment over a single family home. My thoughts are for the limited funds i have available the first go around it might be easier to go with a condo /apartment because of less rehab and structural issues that could go wrong.

In addition to not being able to do most of the work myself if that was the case costing more money. Also, with an apartment in the city of Philadelphia I feel that it would be a quicker turn around time. Since this would be my first purchase I'm not too concerned with seeking high rates of cash flow. Since i would like this to be a long term investment and use this as an easier way into learning the ropes. I know the downside of an apartment are the HOA fees will cut into my cash flow, but if I can get a minimum of 100$/ month after all costs I would be satisfied since the mortgage would be getting paid.

Does anyone have any thoughts on this approach? Or any insights the the Philadelphia market? Thanks!

Apartment -- do you mean a condo? Those will have fees that will bring down your numbers.

If you mean MFH, then that's a possibility, but either you've got the money to play with the big boys in the nice part of town, or you're buying in a warzone and praying for appreciation -- same for SFH, honestly.

The answers will all lie in how much money you have, how much money you can leverage, how much of a project you want, etc.

All I can tell you is that you're basing your cash flow either off Brandon Turner's book, or what you've seen in the forums. Don't do it.

$100 a month cash flow is a very basic number to hit. Why not $200? $500? You want an investment to yield the best return, not the number Brandon told you to hit. Also, your cash on cash return should be in play when evaluating a property. $100 cash flow per month might be great for something you put only $5000 into -- you should get your money back in a little over 4 years at a constant $100 per month. How about $50000? You'll be old and gray before you see that money again if all remains constant -- and it never does.

It would definitely be a quicker turnaround time if you got a condo/apartment, but you will also probably attract lower quality tenants as well. Houses attract families which are the best tenants that you can get.

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