First investment property! Looking for recommendations!

[R Koz]

Hey everyone,

I’m looking to get my first investment property and am curious about where to start.

1. Would you recommend a single home or a multi-family?

2. What kind of mortgage would you recommend for down payment?

- I've read about FHA, using HELOC, programs for using a smaller percentage down (10-15%) or should I just save up to put the full 20% down cash?

I’m looking for guidance based on other peoples’ experiences and what’s worked best for them to grow short term and long term cash flow.

Also, if there are any sites or books that people can recommend, I love learning and reading up as well but looking where to start!

Thank you for any help!! It’s really appreciated!!!

[Jacob H.]

As others have mentioned, the bookstore and podcasts provide a wealth of knowledge so if you're trying to learn more, that's a great place to go. As to your two questions,

The reality of the best decision to make in these cases are based on a number of factors that only you can truly answer. How much money do you have on hand? How much are you willing to put towards the property, and what is your risk tolerance? These are just a few factors that must be determined.

For the most part, a strategy that works for many new investors is house hacking. This allows you to occupy the property, taking advantage of an FHA (VA if you qualify) loan with a minimal down payment, and to begin investing with a tenant paying part of or all of your mortgage. This can be done in a single-family property by renting out a room or section of the house to a long-term or short-term renter. This could also be done by renting out units if you purchase a duplex, triplex, or quadplex. Anything 5+ units would be considered commercial and wouldn't qualify for VA or FHA - in which case you can expect to be putting 20-25% toward a down payment.

What you'll do will also depend on how expensive the properties are in your market.