Beginner Help: BRRRR, Niche, and Strategies

[Steven L.]

Hi BP Community,

I am an absolute beginner to real estate investing (never made a deal). I read Brandon Turner's Ultimate Beginners Guide and want to overcome analysis inertia. My goal is to make a deal within the next 3 months. I hope this is a good forum to ask this.

Niche

I would like to start with a multi family (duplex or even small apartment), but don't know if I'm being too ambitious. If I start with single family homes, I would like to start with 2 of them (to still be somewhat multi family). I can make down payments for both properties.

What are your thoughts on niche (single vs. multi family) for a novice?

Strategy

BRRRR sounds appealing, but certain aspects seem too similar to house flipping, which I'm not comfortable doing. But I also want to become a well rounded real estate investor, which BRRRR seems to quickly make you. I like the buy and hold aspect built into BRRRR.

Is it best to pay off mortgages with other people's money (OPM) or making mortgage payments from your own job income? How you can get cash flow using OPM confuses me.

For (a realistic) example, a single family home costs 250K and I make a 40K down payment. The objective is to use OPM for the mortgage. Let's say I can get $2500/month rent tops in my area. Using the 50% rule, I should set aside $1250/month for repairs/expenses. This leaves me with $1250/month to pay off the mortgage. Taking a 30 year mortgage, it should be possible to owe no more than $1250 monthly for the mortgage. At this rate, it will take 210000/1250 = 168 months = 14 years to pay off the mortgage.

So 14 years with no cash flow? Does this seem right? If this is the case, it seems impossible to win with buying and holding single family homes.

Conclusion

Buy and hold for small apartments or multi family homes sounds most appealing to me. I am open to commercial loans. But given my short timeline, single family is fine: I just still don't understand the single family profit mechanism. (Without expecting appreciation in property value, is it pretty much no cash flow as in my above example?)

Finally, I'm soliciting your suggestions for a reading list that has worked for you on these topics.