First deal 5+ multi family??

[Elliot Landes]

This is my first REI property.

My target market has seen 20-30% price hikes in the last year. It’s absolutely wild - fortunately I sort of benefited from that, but not on a rental. Meanwhile, rents are low and static (not a market where rents go up every year).

SFH and duplexes are so far from the 1% rule that it will never make sense from a cash flow perspective. I'd be happy to find one that broke even! Buying just for the hopes of appreciation seems futile because I think that ship has already sailed.

But here is what I’ve found. Larger multi-family homes 5-12 units are affordable on a per door basis in my market and they will cash flow. I like the numbers and the prospects, but I’m a little hesitant of jumping in on my first deal at that large of a scale.

A little about my target market. Coastal beach town in the Northeast. Historically blue collar, working class with affordable homes. The town was only a minor resort/vacation area historically, not a big tourist draw. The towns to the north and south are big tourist/vacationer markets and the people that worked in and serviced those areas live here in this town. That is changing rapidly and people from larger metros are buying up vacation homes here left and right (myself included - we purchased one a year ago).

Since SFH and Duplexes are basically out of the question, does a 5+ make sense in an area that is undergoing this type of transition? (Condo conversion is likely going to happen rapidly on a lot of these buildings, so that's a possibility too)

Any thoughts or input about this are helpful!

Have others have success on their first deal being a 5+ MF?

Am I getting in over my head with no experience in this arena?