Town homes vs single family vs multi family homes in minneapolis

[Alex Winder]

Hello fellow REI just asking opinions of members regarding the pluses and minuses for a first rental property. I have been able to save around 25k cash in the bank with no debt to my name and minimal life expenses (living with my parents saving money hand over fist). I live in the Minneapolis Minnesota market and have been looking at different properties for a while now. Something I have found in the suburbs is that most town homes have rather expensive association fees required when purchasing town homes and that sometimes don't allow rental properties in certain associations. Plus town homes don't generally appreciate as much as single family homes. Single family homes in the suburbs are normally more expensive than in the minneapolis st paul area. And minneapolis st paul area commonly have more duplexes or multi family homes. Just wondering pluses and minuses of each and what would be a smart beginning type of property for my first rental property. Also any advice you would recommend for someone looking to get into the REI market.

[Thomas S.]

Fairly common answer to your question as to where to start. Buy a multi unit, 3 or 4 plex, that has the right numbers and move into one of the units. Multiple unit purpose built rental properties are far more likely to have the best positive cash flow and as a owner occupant you can get the best financing rates.

At this point forget about appreciation, stay away from SFH as they are high risk low cash flow being home owner driven values. Stay away from anything with HOA fees as they drain your cash flow and are unpredictable.