BEST PROPERTY TYPE TO LIVE IN FOR INVESTORS ??????

Dallas, TX · Member since 2016 · 74 posts · 16 votes

Hey my bigger pockets community! I am going to be purchasing my first property that I will actually be living in via FHA loan. I was curious if anyone had any cool tips for me when searching for the best kind of property to live in for investors. whether that is a Town-home, Duplex, Condo, House, and other options out there.( I also would like to mention that my real estate agent and I have looked for duplexes, but nothing is available in my area......) please help me with your opinions, thanks everyone :)

0 Reply

37 views

Most Popular Reply

Logan AllecBusiness Member

Accountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votes

10y

Fourplex for better cashflow.

Clarita CPA Group516 Reviews

Website View Page

2 Reply

See this reply in the discussion

21 Replies

Jump to latestLatest

Sort by

Logan AllecBusiness Member
Accountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votes
10y
Fourplex for better cashflow.
Clarita CPA Group516 Reviews
Website View Page
2 Reply
Brent Coombs
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
10y
Look for a verifiable "bargain". (But beware of who is saying it is). Either it should already be worth a lot more than your maximum Offer, and/or it has unrealized potential that others might have ignored. I do like Logan's idea of maximum cashflow, from a 4-plex. All the best...
0 Reply
Steve Bracero
Real Estate Agent · Westboro, MA · Member since 2016 · 1k+ posts · 471 votes
10y
Hi @Marcus Martinez
Agree with @Logan Allec the fourplex will get you the maximum return and cash flow-
I am also looking to purchase my first property and live in with an FHA loan. The BP community is excellent and a great place to learn. Make sure to listen to the podcasts tons of actionable content there!
1 Reply
Ayodeji Kuponiyi
Investor · King of Prussia, PA · Member since 2014 · 1k+ posts · 339 votes
10y
@Marcus Martinez Personally, you can't go wrong starting out with a 2-4 unit, preferably a 4plex. I started out with a duplex and wished I "knew better" but it still a great property with plenty of lessons I've learned. Keep searching and make sure you follow up with whatever you find with us at BP. You have to buy right! Best of luck!
1 Reply
Marcus Martinez
OP
Dallas, TX · Member since 2016 · 74 posts · 16 votes
10y
@Ayodeji Kuponiyi what exactly were those lessons you learned ??? if you dont mind sharing with us .
1 Reply
Jordas Reyes
Real Estate Agent · Naples, FL · Member since 2015 · 86 posts · 27 votes
10y
I starting right now with a single family that will cash flow after expenses. But my next property will be under wife's name and doing fha on multi family unit.
0 Reply
Ayodeji Kuponiyi
Investor · King of Prussia, PA · Member since 2014 · 1k+ posts · 339 votes
10y
@Marcus Martinez the lesson I learned: make sure to receive repair credit for items the seller doesn't fix.
0 Reply
William (Will) Amorin
Real Estate Broker · Vancouver, WA · Member since 2011 · 11 posts · 3 votes
10y
Regarding duplexes - that's an excellent start, especially considering you'll live in half. It may cover your mortgage and is easy to manage. Two ways to find them in any market, regardless of their listed status. A) have your Realtor door knock expired duplexes from the last 24 months. B) hit up your local title company, have the costumer service rep get you a list of all the duplexes in the area you wish to be. Here's the next part - take those addresses and check the county GIS website to acquire the mailing addresses and primary addresses of the owners. Go door knocking and ask if they'd like to sell. It's that simple. I'm happy to help, so PM me any time to discuss further.
1 Reply
Steve Jones
Investor · Los Angeles, CA · Member since 2016 · 72 posts · 55 votes
10y
I have purchased and lived in two different 4-plexes over the last 10 years. Both of the 4 plexes have a 5th bootleg unit that generate additional income but for financing and insurance purposes they are considered a 4-plex. I have great tenants and I don't mind seeing them coming and going.
It has worked out great for me.
0 Reply
Jerry W.Pro Member
Moderator
Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
10y
I would try to get a property with more than one unit. I have always tried to buy properties that need a little fixing up so I can value add over time. Not everyone likes doing that though. Finally do NOT fall in love with a property. The kind you fall in love with rarely cash flow. The ones that need a good cleaning and polishing are the ones that make you money.
1 Reply
Marcus Martinez
OP
Dallas, TX · Member since 2016 · 74 posts · 16 votes
10y
@Logan Allec @Brent Coombs @Steve Bracero @Ayodeji Kuponiyi @Jordas Reyes @William (Will) Amorin @Steve Jones @Jerry W. Well at the moment nothing in my price range is for sell as far as multi family properties. Do you fellas have any other advice/tips for a good investment property besides a multi family ???? by the way thanks for the good insight everyone. :)
0 Reply
Peter MacKercherBusiness Member
Residential Real Estate Broker · Saint Louis, MO · Member since 2014 · 1k+ posts · 567 votes
10y
@Marcus Martinez If you're not considering multi-family then you're buying a single family home and renting out rooms/doing AirBnB, if you're doing residential. Besides that you'd be looking at some sort of commercial property which is a different beast entirely, and also not a live-in situation.
I'll also throw in and suggest the 4-family. If you can't find one right now, keep looking and keep saving!
[email protected]
0 Reply
Marcus Martinez
OP
Dallas, TX · Member since 2016 · 74 posts · 16 votes
10y
@Peter MacKercher what about townhomes or condos ? near colleges?
0 Reply
Matthew S.
Investor · Vienna, VA · Member since 2013 · 41 posts · 6 votes
10y
Hi Marcus, in my area of Northern Virginia near Washington DC we have very few 2-4 unit properties. So instead I bought a 4 bedroom, 4 bath townhouse. I live in the master bedroom, and I rent out the other 3 rooms to roommates. It's a good situation... I put 20% down on a property costing about $425,000 (there are hardly any cheaper 4 bedroom properties in our expensive area, unfortunately).
At the time, I didn't make enough to get the loan myself, so my dad kindly took a risk and cosigned, with me committing that I would be renting out 3 rooms. And it worked... the PITI is $2,050 per month, but I rent out the 3 rooms for $2,150 total. I have rented out the 3 rooms to 8 different roommates over the last 4 years with not one day of vacancy. I rent the rooms for about $700-750 per month including utilities... this is very attractive to young people given that studio apartments in our area start at $1200-1300 not including utilities.
So I just pay some utility and repair costs, a few hundred per month, and basically live close to for free. This allows me to save money from my job to invest in other opportunities. I suggest you try something similar.
The one thing is, when sharing the common areas with roommates as I do, you have to have a lot of patience for other people's weird habits and not get easily bothered, plus carefully vet prospective tenants. Luckily I'm ok with that, but for some people a duplex/triplex/quad would be better due to privacy reasons.
0 Reply
Peter MacKercherBusiness Member
Residential Real Estate Broker · Saint Louis, MO · Member since 2014 · 1k+ posts · 567 votes
10y
@Marcus Martinez Those are just more single family dwellings which would still leave you renting out rooms if you wanted to collect rent from a tenant. I'd especially stay away from condos since there's often restrictions on their use, so you would likely have an issue renting it out if you decided to move and keep it as a rental.
College areas aren't my specialty, but you'd have built-in demand, most likely backed by parental financing, with a high seasonality, harder wear-and-tear on the units, and lots of turnover. Some people have that market down pat and do well there but I can't really give you more advice than the most obvious facts.
If you're implying an appreciation play on a property (guessing since you mentioned SFH) then that's a different beast and far more speculative than many people on here would recommend for your first investment property. Try to find something that will pay for itself through rents if you're going to be holding it, hence the support for multi-families, and 4-families in particular as they have the most robust rent stream for properties you'll be able to get FHA financing for.
[email protected]
0 Reply
Ayodeji Kuponiyi
Investor · King of Prussia, PA · Member since 2014 · 1k+ posts · 339 votes
10y
@Marcus Martinez my niche is mom & pop apartments. I couldn't give you advice/tips on anything else because I have a specific knowledge in multifamily. With that said you're going to have to do research and find a niche you like. A niche will make you rich.
Best of luck.
0 Reply
Steve Bracero
Real Estate Agent · Westboro, MA · Member since 2016 · 1k+ posts · 471 votes
10y
@Marcus Martinez Take a look at foreclosed properties as well as HUD properties...
0 Reply
Kevin Hunter
Rental Property Investor · Carlisle, PA · Member since 2013 · 1k+ posts · 543 votes
10y
@Marcus Martinez My two cents. I know your area well and it is difficult to find 2-4 unit properties. Not impossible, just difficult. So now the question comes down to timing. How long are you willing/capable to wait? Secondly, how far are you willing to go? If you are comfortable waiting and looking for an extended period of time, than it makes sense to hold out for a multi-family. If you are willing to go down to Fredericksburg or out to Winchester you will find quite a few more options. If not, then you have to sacrifice units for location. If you are not willing to wait or go a little bit farther, I would argue for a Single Family home. No HOA fees, or extremely low ones, as opposed to Townhouse. When you look at a SFH, my opinion is to find the ugliest one in the nicest neighborhood. If you plan to rent out rooms, then there are other things to consider as well. If you buy a four bedroom and rent out three, then you will have three roommates that need transportation. (they may have cars, but will you be able to find parking to accommodate four vehicles???) You should stay close to public transportation. That doesn't have to be the metrorail though which drives up the prices. The metrobus is just as convenient while not as well known or publicized. Lastly, study areas and compare rent prices with purchase prices, then work backward. For example, if a four bedroom house in Alexandria will cost you $600K with 3.5 percent down and a 4% interest rate, what will be your total monthly expenses (all expenses, which includes maintenance, vacancy, utiliities, etc....) Then divide that number by three which will give you the rent need from each room. If you don't want three roommates then change the number to two. Be patient and stick to your numbers. Take all emotion of the equation. When you plan to live in a property emotion will tend to creep back in. Avoid that tendency. Good luck and keep us posted!!!
0 Reply
Ramon Zapata
West Haven, CT · Member since 2016 · 3 posts · 1 vote
10y
How long do you have to Live-in for until you can rent out your own unit with Fha Guidelines or rules
0 Reply
Tim Hall
Flipper/Rehabber · Tallahassee, FL · Member since 2014 · 462 posts · 237 votes
10y
House with an in law suit, non conforming multi units. If all your looking for is cash flow, these are a great for a start. They're also a lot cheaper than your four plexes and can yield the same amount of cash. Otherwise think bigger 20+ units with a value add and you can get a bargain. Good luck!
0 Reply
Clifton Kaderli
Residential Real Estate Broker · Winchester, VA · Member since 2014 · 136 posts · 34 votes
10y
To house hack by renting the additional units of a 2-4 unit is good. However, your biggest slug of cash will come in the form of the capital gains savings, once in the house two plus years (not a tax professional, not giving tax advice).
To maximize homestead investing in this manner, you will need to achieve the biggest earnings. This translates to finding a big problem to solve, and/or finding a way to add value.
This also requires a property of large enough value to generate a big slug.
Consider living in the largest, nicest, property you can afford (with the biggest problem to solve, or most value to add). Your quality of life is better than hacking a four plex. The capital gains will be easier to document, being a single family, instead of multi.
Example: House is worth $1M ARV. You buy for $600K. Put $150K in. Own at $750. Live in it for two years. Sell at $950K. Make $200K tax free. Rinse and repeat.
The challenge is affording the two year occupancy. Imagine if you found seller financing, interest only, with a three year balloon. The scenarios are endless. The concept is homestead the luxury property, don't house hack the duplex. Both are solid plans. One has more profit and likely a pool. Enjoy.
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.