Private financing! What type of house?

[Philip Gould]

I have been offered private financing 5 year arm amortized over 30 years at 3%. I have to put 10% down up to $120k. Your thoughts on this?

Second, what would be best to hold and rent. Townhouse, condo or single family home.

Thanks for the help in advance. This will be my first investment property! Any other advice you want to give will be welcomed!

I live near Winchester in Virginia

[Jon Holdman]

Bill Gulley's question is just silly. Everyone knows Fords are better than Chevy's or Dodges. :-)

IMHO, you want to avoid anything that has an HOA. An HOA will be a troublesome partner. Better to own something where you don't have big brother saying "you need to paint" or "we decided to put on a new roof, please send us a check for $5000 by the end of the week." So, in my book, that eliminates most condos and townhouses.

I think there's a lot of merit to SFRs over small multis. People get worried about vacancy. Well, vacancy is just part of the business and you MUST plan for it. SFRs are easiest to sell if you decide you don't like this business. There's lots of them around and its easy to get financing. The terms you've been offered are good, but unless you have some sort of credit issues, I'd try to get into 30 year fixed rate conventional loans. Now, if you mean you only have $12K to put down, then this offer may be a good way to get in. But then start working on getting a new, higher appraisal and refinancing into 30 year fixed.

A big key is to learn the realities of the business. Number one: cash flow IS NOT rent - PITI. Do some reading in the Rental Property and Landlording forum before you buy anything.