What type with $50k per year?

[Matt Cariello]

Hello everyone,

I am new to real estate investing and have a quick question to ask you guys. I'm in a pretty unique situation where I will be able to invest and/or save roughly $50,000 per year (sometimes more if I have a good year at my job) in some sort of real estate investment and want to be able to get the most for my money. I've been reading up a lot on single-family homes and whatnot, however, I found that in order to make the amount of money that I think I can with this amount of capital (Especially if I save it for a few years) it'll take a lot of properties (60-70 single-family rentals) in order to return the same amount it may for one or two larger multifamily apartments. My question is, should I save up a few years and use some of that $50,000 per year in order to put a decent sized down payment on a larger complex? Or, should I focus all on single-family homes and just purchase a lot of them? Maybe a mixture of both? I'm thinking of possibly starting off with a few single-family homes, and then once I've kind of learned the ropes, using my $50,000 per year to save up enough to start investing in larger projects. FYI - I am not opposed to going into projects with multiple investors… I'm not necessarily looking to do this all by myself.

What are your thoughts? Sorry for the long-windedness of this!

Matt

[Kelly N.]

Hi Matt,

If I were you I'd think about buying now to learn the ropes. Maybe look at multi family (2-4 units) since they may make more money for you in your market. Save the cashflow from these investments to be used along with your $50k per year, and buy more. When you find something big, do a 1031 exchange- sell some of your SF to fund the larger purchase. Set some goals and go for it!

Kelly