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Updated over 3 years ago on . Most recent reply

GOING BIG OR GOING PART WAY WITH FIRST MULTI-UNIT
Hello all,
I am looking to purchase my first multi-unit and not sure if I should go big or go half way to get the momentum going. The smaller 3 unit is 15.58% CoC. Closer to home and in the city. The 6 unit is 19.84% CoC and would take all my reserves but this would grow quickly to reinvest in the next one which has $1,000 a month cash flow. And it has a commercial front that needs rented. This is in a more rural area. Both properties will have no showings until an offer is accepted. Thank you in advance for the feedback.

Hey Jennifer!
I hope you're doing well.
IMO: Both properties have great CoCROI; however, if the 6 unit is going completely wipe your reserves, then it may be best to consider the tri-plex. What would really suck is if you had a non-paying tenant on your 6-unit and didn't have the reserves to cover the costs. Then you're in the hole immediately. Bigger reward, but bigger risk. Since the other property is in the city, it should be easier to rent out faster in the event of a vacancy. Either way, I don't know the areas or your risk tolerance.
Let me know your thoughts,

Thank you those were my thoughts as well. I really don’t want to get that risky with the first one but I am working full time to cover those “extras”


Okay. If you're comfortable and confident that you're able to cover the expenses in the event something happens then I would say, Go for it. :)
Do you have your financing in place?

I thought I had financing in place. They called me today and apologized they thought the properties were 75k a unit and they do not lend on anything less. I told him if they were that then they would not cash flow. I don't know they must have had a few bad deals. Thanks