Townhome rental or multi?

[Brianna Buscemi]

Hi guys. I’m a newbie, I’ve always dreamt of buying multi-family units & now I’m finally at a place where I have proof of income and make decent money. 
upon further research, here in Florida it’s difficult to find any without major rehab work. That being said, I’ve found a townhome, new construction, with the interest rate incentives as low as 3.99 & 4.99 it a a great area. I plan on living there for a year and renting out after. I know it could rent and essentially pay for itself. But I guess my question is, is it worth letting go of the duplex dream for now and rent out single family unit? Or wait and scan the market for a multi family I can afford? TIA. 

[Jasmine Williams]

Hi Brianna! I too am here in Florida and you should absolutely go the multifamily route. I have been working in the real estate industry since 2010 and have specialized in working with investors here in Florida for a number of years...you are absolutely right, it is typically VERY difficult to find decent small multifamily properties here. This is the exact reason why I switched to the Build 2 Rent model, and most of my investors are following. I'm actually a District Manager with Build 2 Rent here in Florida and we have off-market multifamily properties (both occupied and vacant) that you can purchase with a primary residence loan and interest rates in the low 4's. I'm happy to share that inventory with you! Just feel free to shoot me a message and I'll send you the link. I would personally recommend going the quadplex route, if you can. That way, you could live in one, purchase with little down since you can use a primary residence loan with a low down payment, and collect rental income on the other 3 units. If that's too uncomfortable for you, you can still always go the duplex route! (We have those too.) I hope this helps! Shoot me a message if I can help with anything else. Congratulations on starting your journey! (Btw, we have a Quadplex Investing Webinar coming up soon. If you'd like me to share the link with you, let me know!)

[Alecia Loveless]

@Brianna Buscemi Sometimes it’s worth it to wait a little longer to reach your goals.

If I was dreaming of a duplex I wouldn’t rush the deal and just buy a SF simply to be buying.

Personally I scan the MLS every night in my target markets. It tends to get me results much faster than I receive results from the searches I have set up. The searches in my area typically run 2-3 days behind the actual listings which can make or break a deal sometimes.

[Jasmine Williams]

Quote from @Alecia Loveless:

@Brianna Buscemi Sometimes it’s worth it to wait a little longer to reach your goals.

If I was dreaming of a duplex I wouldn’t rush the deal and just buy a SF simply to be buying.

Personally I scan the MLS every night in my target markets. It tends to get me results much faster than I receive results from the searches I have set up. The searches in my area typically run 2-3 days behind the actual listings which can make or break a deal sometimes.

Great advice Alecia. My personal suggestion, get with an agent in your local market, ask them to set you up on property alerts through the MLS. Then, you'll get alerts as soon as the property becomes available with the specifications you're looking for. That's what I do for my clients. Its more effective and faster. What markets are you looking in, btw?

[Brianna Buscemi]

Quote from @Jasmine Williams:

Quote from @Alecia Loveless:

@Brianna Buscemi Sometimes it’s worth it to wait a little longer to reach your goals.

If I was dreaming of a duplex I wouldn’t rush the deal and just buy a SF simply to be buying.

Personally I scan the MLS every night in my target markets. It tends to get me results much faster than I receive results from the searches I have set up. The searches in my area typically run 2-3 days behind the actual listings which can make or break a deal sometimes.

Great advice Alecia. My personal suggestion, get with an agent in your local market, ask them to set you up on property alerts through the MLS. Then, you'll get alerts as soon as the property becomes available with the specifications you're looking for. That's what I do for my clients. It's more effective and faster. What markets are you looking in, btw?

Thank you for all your replies it really is appreciated. I’m looking for residential multi-family’s in the the Tampa Bay Area, so that includes mostly all surrounding cities. 

[Jasmine Williams]

Quote from @Brianna Buscemi:

Quote from @Jasmine Williams:

Quote from @Alecia Loveless:

@Brianna Buscemi Sometimes it’s worth it to wait a little longer to reach your goals.

If I was dreaming of a duplex I wouldn’t rush the deal and just buy a SF simply to be buying.

Personally I scan the MLS every night in my target markets. It tends to get me results much faster than I receive results from the searches I have set up. The searches in my area typically run 2-3 days behind the actual listings which can make or break a deal sometimes.

Great advice Alecia. My personal suggestion, get with an agent in your local market, ask them to set you up on property alerts through the MLS. Then, you'll get alerts as soon as the property becomes available with the specifications you're looking for. That's what I do for my clients. It's more effective and faster. What markets are you looking in, btw?

Thank you for all your replies it really is appreciated. I’m looking for residential multi-family’s in the the Tampa Bay Area, so that includes mostly all surrounding cities. 

You're welcome! We have inventory in Southwest Florida and Central Florida, which is right outside your area really. I'll message you the link. Just get back with me if you have any questions!

[Nick Velez]

@Brianna Buscemi

If I could do it all over again, I wish I would have purchased a 2-4 unit property instead of a town house as my first property. The new builds are very attractive with all of the incentives, but they are often in weird corners of the town and do not command as high of rent as more prime locations that have been around for awhile. A 2-4 unit is going to cash flow much better after you depart, which will help you qualify for properties in the future. 

I would connect with a local expert such as @Josh Green, who can help you search for properties and run numbers when deals pop up. I know he has personally done several house hacks and has helped a plethora of clients repeat the same model he followed. 

Don't give up and stay on the hunt!

[Jorge Vazquez]

Hi Brianna,

Welcome! It sounds like you're in an exciting spot with your real estate journey. While multi-family units are a great goal, finding a new construction townhome with low interest rates in a good area is a solid opportunity. Living in it for a year and then renting it out could be a smart move to build equity and gain rental experience without the major rehab headaches. It might be worth going for the townhome now and keeping an eye out for multi-family deals down the road. Best of luck!

Best,
Jorge

[Josh Green]

Quote from @Brianna Buscemi:

Hi guys. I’m a newbie, I’ve always dreamt of buying multi-family units & now I’m finally at a place where I have proof of income and make decent money. 
upon further research, here in Florida it’s difficult to find any without major rehab work. That being said, I’ve found a townhome, new construction, with the interest rate incentives as low as 3.99 & 4.99 it a a great area. I plan on living there for a year and renting out after. I know it could rent and essentially pay for itself. But I guess my question is, is it worth letting go of the duplex dream for now and rent out single family unit? Or wait and scan the market for a multi family I can afford? TIA. 

I would avoid investment decisions based on promo interest rates or builder incentives.  At the end of the day, the deal itself is the most important.  Interest rates are poised to start coming down and refinancing is how you time real estate.  The issue I see a lot of clients make with new construction is: 1) they use the builder direct and end up not getting the best deal on the purchase. When they go to sell they find this out when they have no equity in the deal. 2) they go for the interest rate, which can be refinanced down, instead of the purchase price that can’t be changed after purchase. 3) the location and product are carbon copy with their competition. When rental demand dips they suffer with placing tenants or forced to play a game with who can charge the least in the area.  Sometimes, there’s even newer construction being built right after nearby causing the home values of the existing properties to drop and rental numbers as there is always someone with better access to debt or lower acceptable margins than you. You also loose out on any value add in exchange for “turnkey”.  

TLDR: be careful - make your investment decision based on your goals and what the market fundamentals are.

[Bill Hallman]

Hi Brianna, one thing to be aware of is properties with HOA's there may be rental restrictions. Also, HOA fees can change and will add to your expenses.