Starting out with $100,000

[David Hill]

My wife and I have been living below our means for some time now so that we could save up to purchase an investment property. From countless hours of videos and conversations online and in person, multifamily is the route I was headed. I would love this communities input as to whether there is a consensus for buying a few smaller units vs a larger multi. Ive seen success stories and though this would be my first rental, I am willing to grind to make a change for my family’s future!  So the question I am posing is would it be wise to purchase a larger multi family or look at smaller deals? There is some fear as to where this wild market is going to head. Thanks in advance.

[Nathan Grabau]

I would recommend purchasing a 4 plex with a 3.5% down FHA loan. You likely do not spin off a ton of cash, but it continues the trend of you living below your means, and allows you to continue to hold cash while continuing to save money. While this is not guaranteed, I think you will have the opportunity to refi out of the FHA loan and PMI at some point in the next 12 months, when the Fed realizes it has over tightened and has to cut rates.

Even if this does not happen though, it is extremely unlikely that rents fall in a meaningful way making this a very safe bet for you guys to reduce or eliminate your housing expense, allowing you to save money.