Rental Investment Stategy

[Philip Sanders]

Hello Bigger Pockets !! 

I have two rental properties, one I have owned since 2008, and One I purchased last month. But I'm finally going to invest in this idea all the way !  

I love all the information on this website as well as the podcasts. I'm looking to connect with like minded individuals in my area ( Huntsville Al) to learn from and lend a helping hand (sweat equity). 

My goal is to have passive income that I can use to invest in more properties and eventually quit my day job. 

My Question: 

Is it better to pay off the mortgage in full, and use all the cash flow from that property to pay down your next investment property, and repeat. 

OR 

Like the book I read "How to invest in rental properties" is it better to just finance as many as you can and let the tenants pay them off over a period of years and use the extra cash flow to help pay down the mortgage.

Second Question: 

SFR or Multi-Family ?

My area is North Alabama. It seems to me that the majority of Multi-Family are in bad neighborhoods. I had a tri-plex once, in a bad area of town and although it made money, it was more headache than it was worth. 

Thank You for Any and All Advice/Criticism 

[Tim White]

@Philip Sanders

I am a local investor and that is not true about the four properties.  National Bank of Commerce is one lender that will allow you to have more than four as they go by Fannie Mae guidelines as @Mike D'Arrigo  stated.  Before you prematurely admit to defeat contact more banks and let them know your situations and see if they will work with you.

With that there is much risk in dealing with leveraging multiple properties and that really depends on your risk tolerance.  One way to hedge that is use private money to loan on a rehab then flip the property and use the proceeds to invest in other rentals as @Joe Villeneuve mentioned in a previous posts. Use the initial seed money to continue flipping.  With the appreciation as of late in Huntsville it is not hard to find a good flip deal.  That does lead to a different risk when dealing with the volatility of appreciation.  Anyways determine what your risk tolerance is and don't stop at the first no.