Advice on if my wife and I's finances are ready to buy 1st MF.

[Joseph Bennett]

I've been researching and saving for 3 years now. I'm fully convinced real estate is the way to go.

My wife and I are already invested in a gym and making returns on that. We have $22k in the bank and want to buy a multi in Florida's west coast where we live. The market is hot so multifamily is expensive.

Hoping to get a tri or quad but open to a duplex. So if we put about $15k down on a property, for example a $360k triplex and only had $5k left for reserves would that be risking too much? We make good money and are saving about $2k a month and if we moved into a into a property we owned it could save us an additional $500/month. I'm starting to get a little scared when I think of what could go wrong and having limited reserves. Should we just go for for it or save up more money?

[Matt Leber]

@Joseph Bennett you'll have a stressful issue if you run into a capex problem early on. I would wait a bit if I were you. Most of the multifamilies I have been seeing in Central Florida (Orlando at least) are overpriced to begin with - and they need capex rehab on top of it. If you can find a perfectly "like-new" multifamily, you will probably be OK, but those seem like a rarity. Also, you don't have enough savings if you're financing conventionally. If you are doing FHA that would be a different story.

If it makes you feel better, my wife and I are also in our mid 20s and have similar earnings/savings as you. We are in a “keep some cash on the sidelines” mindset right now with the way the market is. It may be valuable to have that liquidity if markets correct. That being said, I’m not able to time the market. If a great deal was in front of us we would still pull the trigger. At a savings rate of $2k/mo you’ll have a nice reserve in very little time. You’re in a good position. Don’t rush in and stretch yourself too thin. Good luck!