Deciding on first RE investment

[Paulina L.]

Hi all, I am new to investing. I'd like to get started this year, but a few questions on what may be the best choice for first RE as a way to bridge to more investments after. Would love other's advice on best first investment with ideal scenarios below:

Choice 1: Out of state investment (likely has to be anywhere between $75k-110k in purchase price), likely conventional loan, 20-25% down. I'm finding some ideal properties (I'm finding good market with decent cashflow OR bad market decent cashflow - however, as tempting as both are, I'm assuming either way to stay away from the latter. However, the former has been scarce).

Choice 2: Multi-family property (in CA), conventional loan/FHA. I would like it to be a buy/hold with cashflow - my issue with this is that most of the locations I am finding seem to be in great locations (high pop growth, high rent %s) but using the BP Analysis calculator the cashflow is either low or negative, is there any idea why that may be the case?

Q: Would like to hear advice on the above choices for first RE investment that would help with future investments (as well as any advice/answers on the questions in each!)

[Stephanie P.]

Quote from @Paulina L.:

Hi all, I am new to investing. I'd like to get started this year, but a few questions on what may be the best choice for first RE as a way to bridge to more investments after. Would love other's advice on best first investment with ideal scenarios below:

Choice 1: Out of state investment (likely has to be anywhere between $75k-110k in purchase price), likely conventional loan, 20-25% down. I'm finding some ideal properties (I'm finding good market with decent cashflow OR bad market decent cashflow - however, as tempting as both are, I'm assuming either way to stay away from the latter. However, the former has been scarce).

Choice 2: Multi-family property (in CA), conventional loan/FHA. I would like it to be a buy/hold with cashflow - my issue with this is that most of the locations I am finding seem to be in great locations (high pop growth, high rent %s) but using the BP Analysis calculator the cashflow is either low or negative, is there any idea why that may be the case?

Q: Would like to hear advice on the above choices for first RE investment that would help with future investments (as well as any advice/answers on the questions in each!)

House hacking is the best way to go if you can. FHA is for owner occupied only, but will allow you to get the most units with the least amount of down payment. If you're new to RE, that's your best move. Always exhaust your conventional financing route before going to commercial or DSCR lending.

If you're just beginning, house hacking units is the best.  Get a good mortgage broker to help you through.