First Investment

Multi-Family and Apartment Investing
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First Investment

Chance Monteith
Surprise, AZ · Member since 2015 · 6 posts · 1 vote

This is my first ever question posted to BP!

Anyways, by the end of the year, I plan on purchasing a multifamily property to house hack. My brother and I are going to live in a unit, and rent the other(s) out.

My question is, in your personal opinion, what type of property should be a first purchase? Should I plan to buy a Duplex, Triplex, or Fourplex? I understand there are more factors that can go into making a clear-cut decision, but right now I just want to know your advice, assuming I'm able to afford the fourplex.

Another question: I have found a small complex composed of townhouse units, and a seller is selling 4 of these, 2 bed units together at $175000. 

Are these type of units considered to be the same as a fourplex,  or something else? I'm not sure how to describe the complex they're in, as they are townhouses in an apartment-style area.

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Aaron Smith
Investor · Washington, DC · Member since 2016 · 175 posts · 73 votes
10y

Look into FHA financing, its 3.5% downpayment. They also have their FHA 203k program, which finances renovation costs into the loan, still with 3.5% down. If you go that route, you can save the other money you have for other investments. Its a great way to avoid paying rent, and have tenants pay your mortgage for you. Max is 4 units for an FHA loan.

I did a 4 unit FHA house hack about 5 years ago. Its not too bad filling those extra units, just follow the tenant vetting advice on this website. I would personally go 4 unit. If one tenant moves out, you only lose 1/4 of the property income, so its much safer.

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  • Brian Adams
    Syndicator of Large Apartment Buildings · Glen Mills, PA · Member since 2009 · 1k+ posts · 1k+ votes
    10y

    @Chance Monteith, welcome to BP and make sure you check out the various forums, resources, podcasts, etc. 

    Lots of good info on this site.

    I focus on 100 to 400 unit deals, so probably not the best person to answer your questions. 

    Good luck on your journey!!

    0Reply
  • KC Zhang
    Flipper · Elmhurst, IL · Member since 2011 · 96 posts · 23 votes
    10y

    Chance, 

    I suggest you start small with a duplex, then move on to 4 plex or even bigger complexes. 

    As for your question about the 4 units, you need to check how they are deeded. If they are all on one title, then it's a 4 unit. I'm not a title expert, so please check with a local title officer. 

    Good luck!

    Casey

    0Reply
  • Mark Nolan
    Professional · Carlsbad, CA · Member since 2012 · 12k+ posts · 1k+ votes
    10y

    @Chance Monteith

    Welcome to bigger pockets. Make sure to check out the Bigger Pockets Blog: https://www.biggerpockets.com/renewsblog/

    It is full of great information

    0Reply
  • Chance Monteith
    OP
    Surprise, AZ · Member since 2015 · 6 posts · 1 vote
    10y
    Originally posted by @Brian Adams:

    @Chance Monteith, welcome to BP and make sure you check out the various forums, resources, podcasts, etc. 

    Lots of good info on this site.

    I focus on 100 to 400 unit deals, so probably not the best person to answer your questions. 

    Good luck on your journey!!

     Geez! Must've been quite the journey to get there. Thanks!

    0Reply
  • Chance Monteith
    OP
    Surprise, AZ · Member since 2015 · 6 posts · 1 vote
    10y
    Originally posted by @KC Zhang:

    Chance, 

    I suggest you start small with a duplex, then move on to 4 plex or even bigger complexes. 

    As for your question about the 4 units, you need to check how they are deeded. If they are all on one title, then it's a 4 unit. I'm not a title expert, so please check with a local title officer. 

    Good luck!

    Casey

     I appreciate the info and advice, KC!

    0Reply
  • Aaron Smith
    Investor · Washington, DC · Member since 2016 · 175 posts · 73 votes
    10y

    Look into FHA financing, its 3.5% downpayment. They also have their FHA 203k program, which finances renovation costs into the loan, still with 3.5% down. If you go that route, you can save the other money you have for other investments. Its a great way to avoid paying rent, and have tenants pay your mortgage for you. Max is 4 units for an FHA loan.

    I did a 4 unit FHA house hack about 5 years ago. Its not too bad filling those extra units, just follow the tenant vetting advice on this website. I would personally go 4 unit. If one tenant moves out, you only lose 1/4 of the property income, so its much safer.

    1Reply
  • Pete Perez
    Engineer/Real Estate Investor · Renton, WA · Member since 2015 · 368 posts · 120 votes
    10y

    @Chance Monteith

    Welcome to BP! 

    Like others have said there are plenty of resources for you here. I'd recommend the podcasts, and the weekly webinars. 

    I actually plan on doing the same thing in the near future. We are going to start with a duplex to get our feet wet. I've never managed a tenant before, so I'd rather start with one instead of three. But that is just my personal opinion. You may want to jump in on a great deal and learn on the fly. Whatever you decide I wish you the best of luck.

    Pete

    0Reply
  • Chance Monteith
    OP
    Surprise, AZ · Member since 2015 · 6 posts · 1 vote
    10y
    Originally posted by @Aaron Smith:

    Look into FHA financing, its 3.5% downpayment. They also have their FHA 203k program, which finances renovation costs into the loan, still with 3.5% down. If you go that route, you can save the other money you have for other investments. Its a great way to avoid paying rent, and have tenants pay your mortgage for you. Max is 4 units for an FHA loan.

    I did a 4 unit FHA house hack about 5 years ago. Its not too bad filling those extra units, just follow the tenant vetting advice on this website. I would personally go 4 unit. If one tenant moves out, you only lose 1/4 of the property income, so its much safer.

     I had thought about using a 203k, but haven't really looked into it much! Thanks man 

    0Reply
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