Start with Single Family or Multi-family?

[Kyle Marsh]

Hello,

Should I invest in a single-family or multifamily for my first property? I hope to continuously househack using fha loans and refinance to purchase additional properties several times. I know this is a very market and situation-dependent question, but generally speaking, I'm curious which type of property is more suitable for this strategy. Here are the benefits I have heard from both sides:

-By starting with single families, you are able to build equity faster. By building equity, you can tap into it using cashout refiances or helocs to invest in additional properties. I've heard that a common strategy is to start by building a portfolio of single families and use the equity in them to invest in cash-flowing multifamilies later on.

-By starting with multi-families, it is much easier to qualify for an FHA loan for your next property. A mortgage banker recommended that I start off with a 4 plex, then 3 plex, then work my way down from there. By doing so, the underwriter will be more likely to approve the loan because I am "downsizing."

I'm looking to invest in my first property later this year using an FHA loan, so I am interested in which property will better set me up for the future. I'd appreciate any input. Thank you!