Acquiring 4 unit

[Nick Sarangoulis]

I want my next purchase to be a 4-unit multi family property. I want to know where the best markets are at the moment and is it possible for me to acquire one while only sitting on $15k. I have yet to purchase a primary residence so I can do 3.5% down with fha but then there are closing costs. Maybe i can get seller assist with the closing costs or seller financing on the deal? I would like to know what is possible with that amount of cash… second question is… Is it a good idea to make an investment like this that is far from where I live… ex. I am in Reading, Pennsylvania and there is a good deal in Phoenixville Arizona. Is it worth it/possible to hire a VA and make it work? Is it a good idea to visit these locations and make connections/check out the real estate? I appreciate any feedback. I am fairly new to investing, 24 years old, live in Reading, Pennsylvania.

[Steve K.]

I'd recommend waiting until you have built up more capital. You'll need a down payment plus reserves in case you get hit with a big capital expense, unexpected vacancy, tenant issues etc. You'll need to owner occupy in order to put 3.5% down otherwise you'll need 20% for an investor loan. So that's ~$425k max if you owner-occupy, or ~$75k max with an investor loan. But you'll need reserves in addition to the down payment. I'd start by talking to a mortgage broker about your options, then save up and wait until you can buy in a good location and have adequate reserves. You could also partner with someone that has capital, or find a seller-financed property, but not having adequate reserves is a bad idea no matter what the deal structure is.