Why house hacking a 2-4 Unit Property is the best first investment

[Alan Asriants]

This is just my 2 cents on what strategies I recommend for new home buyers/investors. Everyone's journey is different

If you can, I think buying a solid 2-4 unit property in a solid area utilizing an FHA loan is an amazing way to get started.

Benefits:

-Hands on experience in your own backyard

- Your own roof over your head

- An asset that will appreciate overtime

- A 2-4 unit investment with only 3.5% down

- Chance to reuse FHA for another 2-4 unit property and continue using low money down

- Tax incentives on your own home

Another advantage to owning multi family over single family is your cost per sqft and rent potential. By cost per sqft, you generally are renting at a higher cost per square foot because your unit mix are smaller. For example, in my area, a 800sqft 2 bed 1 bath rents for $1700/m ($2.13/sqft) while a 1800sqft 3 bed 2.5 bath rents for 2700/m ($1.5/sqft). Don't forget when your tenant moves out, it is a lot more expensive to freshen up (paint and clean) an 1800 vs 800 sqft place.

By rent potential I mean this: Every year you should increase your rent. If you increase rents on your properties by 30$/m for 5 years, thats $150/m. If you had just one unit, that's $150/m more in 5 years. With 3 units, that's $450/m more. Thats the power of having more units

This is why multi family has such a premium price tag.

Long term, getting that low money down duplex should have more benefits than waiting to save 20-30% to get one

Hope this helps!