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Updated almost 6 years ago on . Most recent reply

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162
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Jared Baker
  • Hartford, WI
50
Votes |
162
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Should I take Agents Advice?

Jared Baker
  • Hartford, WI
Posted

Hello BP!

I'm hoping to purchase my first rental property before July. I've got my financing in order and I am ready to start making offers on properties. I sort of made a decision to myself that I would get a SFH at least a 2/1 800sqft or larger. Getting a SFH to me seems like the best option for a first property, should rent easily, get a little better cash flow since the rent is a little higher than multi-family units, and if need be should sell quicker if for some reason I need to unload it.

I spoke to an agent last night and she said that I would be better off getting a duplex.  I have considered that but since this is going to be my first property I don't know what challenges I will face in terms of existing tenants along with the normal process of being a landlord.  I agree with a duplex is better because you have two units under one roof and higher income.  But there are also the downsides such as what i mentioned above along with a higher payment per month, double appliances, and just larger space overall if something needs to be worked on.  I could definitely afford to get a duplex, but I would put a much larger portion of my money into that than a single family.  Duplexes are just over twice what a single family is.


Should I heed her advice and change my focus to a duplex or should I continue with the SFH just to get my feet under me? I would like to build a rental portfolio but I'm not sure if going "big" is the best way to get started.

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Replied

@Jared Baker here is one strategy:

Buy 3, sell 2 after 5 years, take equity to pay off 3rd. Repeat. If you can find 3 properties that are affordable and would be a good purchase market, hold on for 5 years, sell the 2 with appreciation that can be put into the 3rd to payoff, free and clear. Find someone that may own all 3 willing to make a deal for all 3. Financing may be able to do creative financing with a commercial loan. Good luck!

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