At the current market, what is the best strategy for a first time investor?

[Alex R.]

Something that is doable considering limited experience of such investor; offering a reasonable reward and manageable risk.
For example I know Auctions have potentials for huge equity right at the time of purchase but there are complexities to them such as liens or deferred taxes.
Multi-family units seem to be lucrative but then they have their own downsides.
Flip needs experience in managing time, contractors …
Which path is the ideal path to take as for the first deal?

[Jon Holdman]

You have to start with your goals. Are you looking for an income stream to live off? Or to build a retirement account? Something else?

Comparing a fix and flip to a multifamily investment is apples and oranges. Done right, a fix and flip can generate a nice chunk of change. But its a job. You don't just put in some cash, wait six months, and collect the returns. You have to do a bunch of work to get to the payday. And there is risk. Especially starting out. Its easy to overestimate the selling price and underestimate the repairs and end up making nothing or suffering a loss.

Rental investment (regardless of exactly what type of property), OTOH, don't tend to spin off large chunks of cash. If you purchase right, you can generate some cash each month. Purchase wrong, and you'll be feeding money in on an ongoing basis. But in either case, you will be accumulating equity in the property. Hold 15 or 30 years and you have a paid off property that will get you an ongoing monthly paycheck.

Depending on how you do it, rentals can be pretty passive. If you use a PM, you're involvement will be mostly a matter of dealing with the PM. That comes at a price, though, and you can earn the PM's chunk by doing the PM work yourself. That will require more of your time. Not a huge amount, but its unpredictable when it will be needed.

There are other ways to invest. If you have cash, lending to rehabbers carries somewhat less risk and still has good returns. Buying notes, performing or not, is a similar strategy. If you want to do a RE job, there are a number of those - wholesaling, being an agent, managing properties, developing, or various construction jobs (which can help give you the skills to be a fix and flipper.)

If you have no cash, bad credit, and no income, or some combination of those, then I'd advise to take a hard look at your skills and background and just plain get a job. Lots of stuff that's called investing is a job. You turn the crank, and money comes out. Lots of "investing" is really commissioned sales jobs. Yes, you can make money at those. It takes work and some money to get rolling. But you can also invest a lot of time and get nowhere. There's a lot to be said for a steady paycheck that doesn't depend on your ability to close deals. And there are lots of hours in a day. Work a day job to accumulate some money and spend your evenings and weekends trying to do some real estate job.