Here's my situation... $50k cash to play with. SFR vs. MFR?

[Eric Bate]

I've got $50k to work with, and I need a place to live in the Twin Cities (Minneapolis or St Paul).  Here are some of the options going through my mind:

1. Buy a SFR and get roommate-tenants off Craigslist. (Buy-and-hold)

2. Buy a duplex.  Live in one side, rent out the other.

3. Buy a cheap place in cash just for me to live in (probably not in a great neighborhood... not looking forward to that).  Then get a home equity loan to put a downpayment on another place, which I would rent out.

4. Continue living in an apartment, but use the $50k to get into buying-fixing-and-flipping as a side gig to build up more capital.

Is there really much of a difference between options 1 and 2?  Lately I've just been focusing on duplexes for house hacking, but I'm trying to expand my thinking here and see if there are any better options.

I'm paying about $1000/mo in rent right now, so once I've got a place that pays its own mortgage and expenses, I could start building up capital a lot faster than before.  My long-term goal here is to have a place of my own plus rental properties to supplement the income from my music.

Thanks!

Eric

[Conor Hesch]

Hello @Eric Bate  here is what I would do (it's not highly technical but it's been working for me)

1. Buy a duplex. Use the loan that I just used to buy my first duplex: Portfolio Conventional Loan, 3% Down Payment, No Mortgage Insurance (yes this loan really exists). This will make your monthly payment way lower than an FHA loan and thus will help you cash flow. (not to mention your offer looks stronger to the seller if its a conventional loan opposed to FHA). Plus you can finance up to $5,000 of repairs into the loan (like a mini-rehab loan) just as @Account Closed can advise you on that) or just stop there and enjoy more free time...I have friend who quit his job and just manages his properties now.

Also most lenders need only 45 days or less to close your loan so if you need a home by August you are just fine for time !  Keep in mind that this 4 step process I outlined takes time (anywhere from 1 to 10yrs depending on the person) so keep the big picture in mind but don't let it stress you out too much.  Send me a message if you have any more questions and keep us posted on your success!  GOOD LUCK !