Quote from @Christopher Stetler: Looking for honest perspectives from people managing multiple properties.Background: I'm a QuickBooks expert who owns commercial property and handles CRE tax returns.

The 100-hour test is one of seven material participation tests - you may be able to pass one of the others, although test #1 (500 hours) and test #3 (100 hours) are most preferred.

Small multifamily usually beats a SFH because multiple units help cover the mortgage, while extra bedrooms typically boost rent more than extra bathrooms (within reason).That’s why many beginners gravitate to Midwest markets, lower entry prices, solid rental demand, and a much better chance to break even or cash flow while you build experience and equity.

You’re choosing between stability + appreciation and income + scalability.Let’s zoom out for a second.Option 1: Buy a Primary in Long BeachProsPrimary residence financing (lowest rates, lowest down payment)2-year capital gains exclusionLifestyle stabilityLong-term appreciation in a supply-constrained marketHedge against rising rentsConsLikely weak or negative cash flow if converted to rentalLarge capital tied up in one assetSlower path to income replacementProperty taxes + insurance + maintenance in CA are realIn markets like LA/Long Beach, primaries are often wealth preservation + appreciation plays, not income plays.Option 2: Skip Primary, Go Straight Into RentalsProsImmediate income-producing assetsHigher cash-on-cash potentialDiversification across multiple propertiesScalable modelMore control over returns (via underwriting + management)ConsNo appreciation “anchor” in SoCalLess emotional security than owning your homeMust build a strong remote teamRenting means rent increases remain a factorIf financial freedom through cash flow is the primary objective, rentals win on math.The Real QuestionIt comes down to this:Are you optimizing for:Net worth growth?

Since you're using a VA loan, you can't waive the appraisal protection, which can make your offer feel a bit weaker to a seller in a multiple-offer situation next to a similar conventional offer.

I moved from Portland to Columbus in 2020 to start investing and now own 10+ rentals, and what’s worked is buying multiple smaller single-family homes that hit the 1% rule in the $120K–180K range, which gives steady cash flow and builds equity quickly without over-leveraging.

I'd echo the HELOC > DSCR recommendation, especially with a 1.7 DSCR - that gives you solid cushion for rate fluctuations and vacancy.One thing worth stress testing though: the $100k purchase with $1800-2000 rent is a strong rent-to-price ratio (1.8-2%), which is excellent.

When multiple cornerstone employers start tightening at the same time, it’s usually less about any single company and more about the system adjusting.And this morning added more confirmation.

Even with strong single-family or small-scale experience, the risk profile changes significantly when:All units are offlineThere’s zero operating incomeYou’re managing multiple trades, inspections, and lease-up simultaneouslyDepth of experience and depth of capital both matter here.

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