Jumping into Multi-Family/Apartments Need Advice

[Oliver Trojahn]

I currently own three single family rentals with a partner and we plan to buy 1-2 a year conventionally for the next 10 years or so. The business model is working and will continue. My next plan shouldn't effect our SFR rental business plan.

Now, on my own, to help diversify I have decided to jump into the apartment building/multifamily game. I do not have experience in Apartment buildings but am very competent in rental real estate. I have about 55k cash to start. My plan is to buy either duplex's, fourplex's or even a 6-14plex to start. I am not sure exactly which one to start with. All of these will be in C to C- areas that will generate great cash-flow with little chance of property appreciation. I will use a PM company to manage all in these areas. The deals I am considering will meet a 2%-3% rule.

I have three plans of attack I would like feedback on:

Purchase 2 duplex's cash that will generate over 2,000 a month in gross rents, get property management in place and see how it goes. This will allow me to get my feet wet with this area and not take on to much debt.

Jump directly into an apartment building 6-14 units and try to find an owner financed deal that will allow roughly 10-20% down, refinance after a year or so.

Attempt to get pre-qualified for a commercial loan with 20% down and make offers as normal on apartment buildings in my price range (i feel like this may be difficult with no experience in apartment investing.)

I have W-2 income which may help with loan qualification.

If you guys were me what would you do? I would like to get a jump start in the commercial multi family world.

Thanks.