How should I use my VA Loan: SFH or Multi-family in Reno?

[Jon Li]

Hi, I just got out of active-duty and am considering moving to Reno to buy/live in either a SFH (renting out part of it) vs. a multi-family (duplex or quadplex). I would really appreciate any thoughts or advice as I am learning a lot about REI and would hate to make a bad decision on our family's home purchase:

• SFH: ~$750K, would require additional ~$90K downpayment on top of the VA Loan (given ~420K limit for 0 down)
  • Positive: Wife/kids love the home; am sure I could Airbnb the in-law suite to help pay mortgage, in great area
  • Negative: Need to use $90K downpayment/opportunity cost of having money locked up; home prices have peaked in area and may be due for correction

• Duplex/Multi-family: ~$300K
  • Positive: I don't need downpayment, can use downpayment funds to buy another investment property, income from other unit(s) would help cover mortgage (though not totally)
  • Negative: Apt/duplex life isn't as appealing, though could do it a few more years and save up to buy dream home in next down-turn, just ok area (though kids are young so schools don't matter yet)

The emotional decision would have us jump at the house as again my wife/kids love the house has a nice yard w/ playpen, safe area, and we'd love to settle down after the constant moves but I would hate to be in a financial bind in a couple years if there is any downturn in the economy, especially if I have the chance to have additional side income by investing the downpayment funds instead as well.

Any advice?