First Investment Property Advice SFR or MF?

[Blake Jenkins]

I am seeking some advice on my first investment property.

I have about 55k cash and my budget is about 200K max, (20% down) which will leave me with approximately 15k in reserves. I am wondering if it would be best for me to start small by purchasing a 2BD/1BA home for around 125k and try to rent it out without utilities for around 1300 / month or would you recommend purchasing a 3-4 unit property? I’m afraid that with a Multi family my reserve will be dangerously low at 15k with the additional SQ FT that could cause issues / require repairs.

To be approved for the commercial loan I am looking into I will be a 1.20x DSCR which is possible with both the SFRs and Multis I have been looking at but it's looking like the MFs will cash flow more than the SFR...

I would appreciate any insight possible and please feel free to point out key details I may have not mentioned / may be overlooking

Thank you!!!

[John Teachout]

My two cents: If you can live in a portion of a multi-family, go that route. If not, start with a lower price SFR. This will be your training program and it's easier to get in and get out of an SFR. I think they're a great place to start since the risk is lower. Almost every landlord refines their processes as they go along and making critical mistakes on "small" money is better than on "big" money.