Larger Multifamily as First Deal - Good Idea or No?

[Chris Williams]

Given all the current craziness, in the housing market and otherwise, I wanted to run an idea pas the BP Conglomerate.

I'm following this plan at present: Buy a small multifamily (2-4 units) property in Washington State for a house-hack. Live in one, rent the other/others to cover the mortgage and maybe a little cash flow. You know the process.

This would be my first deal, wherein I would live for a few years before refinancing, pulling the cash out, and start in on investment properties in the Midwest or South.

Pretty standard approach, right? Which is where I've hit a snag. My intended area (Vancouver, WA) has caught on to this approach. Small multifamilies are going like hotcakes. Snapped up in days, if not hours. I'm a patient man, but I've no idea how long this could take. Meanwhile prices keep rising...

So I wondered. What about a larger multifamily - 4 to 8 units, let's say. Would that work?

You don't see too many, I know, but they also seem to have fewer people buying them up. It's a bigger mortgage, but higher cash flow, and a little more of a cushion in terms of vacancy rates. I could free up a little extra cash by borrowing against my 401K to increase the down payment.

What do you think? Good idea? Disaster in the making?