Buy SFH now or wait for MFH

[Rea Cooper]

Question: Should I start with a single family and house hack or wait for ~10 months for multifamily?

Hi BP family! So I am conflicted right now. Due to rising interest rates, I do not have the capital for buying a MFH property and I most likely will not have the capital until ~September 2023. So should I wait until I have the capital or should I buy SFH now? Short term rentals will be my main play and there are a few good properties in the area however, the properties are either in areas of slow growth (house age + lack of development = low appreciation) or they are priced at the high end for the area they reside.

Quick summary of my RE strategy: I plan on buying small to medium SFH or MFH properties (2-4 units) until I gain the capital to invest in the larger MFH units (8-100+ units).

A few other questions that I have are these as well:

1) As a first time home buyer, would it be a good idea to look in other states where properties are cheaper?

2) Should I try to find someone to partner with? I do not have someone in my current circle who is into RE so I would have to meet someone, but is this wise when I have no experience?

Thanks in advance for all advice!

[Brandon Vanderford]

Hey Rea, some of your strategy will be dependent on whether you are aiming for immediate cash flow or long-term appreciation. I see that you are posting here in Raleigh. I am very optimistic for future appreciation in the area. However, the prices are high, and your immediate month-to-month cashflow might be better elsewhere. 

Another Wake County specific tip. The Raleigh area tends to have far fewer multifamily homes than the average, similar-sized city. You might look at Durham, instead. That will open your options a bit. 

If I were in your shoes, I would probably act sooner rather than later, if the numbers on the house hack make sense (just because I like to take action rather than wait). Of course, I cannot predict what the house market will look like in 12 months, so there might be some advantage in waiting.