questions on a first rental property

[Ben Zimmerman]

Hello BiggerPockets!

My situation: I purchased my home last year for 165k, and have roughly 45k in equity. I have a decent job and am saving ~2k a month with ~30k in savings. I am looking to buy my first rental with long term strategy of buy and hold, and am constantly flipping back and forth between SFR versus MFR. I know that I will only live in the area for at maximum another 2 years so I will need to rely on a property manager which will ultimately eat into some profits either way. When it comes to SFR I prefer recently built homes to (hopefully) reduce long term expenses.

Being 100% realistic, I likely will find a decent, but not great deal due to being inexperienced.  But sometimes simply getting into the game so to speak is better than constantly waiting for lightning to strike.  Due to this fact profit margins may not be as large as some of you are used to seeing.

Sadly, 30k is at the very low end for what is available for 20% down on a SFR here in phoenix. However a newer home in that price point would be along the outskirts of town, in a decent area. A multifamily may not be doable considering I likely would not meet the 20% requirement for even the cheapest quads. What would the experts at BP suggest? I see many people buying MFRs as their first rentals. Is it worth potentially waiting for funds to improve to buy a lower end MFR? Or press on and 'get in the game' with a SFR? I know SFR tends to appreciate more than MFR, and while appreciation sometimes seems like a dirty word in this business and everything centers around cashflow, I am in this for the long haul and have 30+ years for appreciation to occur. Given this fact appreciation can be very large and isn't something that should be completely overlooked.

Finally, do you feel that potentially buying two properties using 10% down is a better solution? It's guaranteed to be more pricey on a monthly basis due to PMI ect, but would allow for faster long term growth. The down side being profit margins would already likely be somewhat slim as is.