All Forum Posts by: Therese V.

Our goals are to over the next 20 years have paid off properties. This is a long-term buy and hold strategy that will also implement the 1031 exchange in order to trade up. We are focusing on one are of the country that is much cheaper than where we currently live and will give better returns. After a few years, we want to 1031 those properties into more expensive, but lower risk properties where we currently live, while still buying in the cheaper location.
The strategy is to amass enough properties to be financially well-off, basically pretty high income. We want to be able to live very well and also do a lot of charity work both in our own community, the one where we are buying the cheaper homes and around the country.

Since we have pretty lofty financial goals, I suppose I am stuck between many low-priced SFH or just starting in with the multi-units.

Any thoughts on achieving our goal with the first posted info?

I'm looking for advice on what I should focus on for my first real estate deal. Should we go with a SFH, multi 4 or less or the 5 or more places?

Here's an example of SFH in the area I am looking:
Asking price= $30-$50k depending on whether foreclosure or work needed
Usually 2-3 bedroom home with 1-2 bathrooms and maybe a basement. Around 800-1k sq ft.

Multi-unit 4 or less usually:
Asking price= $40k-$130k depending on number of units
Usually 2 bedroom units with 1 bathroom around 700-900 sq ft.

Multi-unit 5 or more usually:
Asking price= $130k (5 units)- $275 (a seven unit with 6 fully rented)
Usually 2-3 bedrooms with 1 bathroom and 700-1k sq ft

Since I am looking at where I should focus on for my first deal, should I just nix out the multi-unit 5 or more due to financing constraints or just look at the lower priced 5 unit buildings and forget about the seven unit one?
I have been estimating that the SFH go for $750 and the apt units for $500 (even though I know they go for more). Some of the apt units have all renter paid utilities and some have owner paid water.

I'm really only looking at maybe 10-15 properties in each category, with less available on the muti-unit 5 or more end.
These are probably C areas with C buildings. I am not looking at any that have more than paint/carpet/few things to do because I don't want to take on major renovation on a first property.

Where should I focus my search? Any thoughts? Is there something I'm missing?

If they are separate meters, I would have the tenant pay for their own utilities. If you pay for them, add in premium to rent to allow for this because electricity and water can really add up when someone isn't accounting for having to pay for it themselves.

Do you know if the property has separate meters for each unit?

I'm looking for advice on what I should focus on for my first real estate deal. Should we go with a SFH, multi 4 or less or the 5 or more places?

Here's an example of SFH in the area I am looking:
Asking price= $30-$50k depending on whether foreclosure or work needed
Usually 2-3 bedroom home with 1-2 bathrooms and maybe a basement. Around 800-1k sq ft.

Multi-unit 4 or less usually:
Asking price= $40k-$130k depending on number of units
Usually 2 bedroom units with 1 bathroom around 700-900 sq ft.

Multi-unit 5 or more usually:
Asking price= $130k (5 units)- $275 (a seven unit with 6 fully rented)
Usually 2-3 bedrooms with 1 bathroom and 700-1k sq ft

Since I am looking at where I should focus on for my first deal, should I just nix out the multi-unit 5 or more due to financing constraints or just look at the lower priced 5 unit buildings and forget about the seven unit one?
I have been estimating that the SFH go for $750 and the apt units for $500 (even though I know they go for more). Some of the apt units have all renter paid utilities and some have owner paid water.

I'm really only looking at maybe 10-15 properties in each category, with less available on the muti-unit 5 or more end.
These are probably C areas with C buildings. I am not looking at any that have more than paint/carpet/few things to do because I don't want to take on major renovation on a first property.

Where should I focus my search? Any thoughts? Is there something I'm missing?

But all areas have risk. What are the pros and cons of industrial areas? Do cons always outweigh the pros?

Say an area has an oil refinery and about 20 years ago that refinery found out that some oil had leaked out in the ground over a long period of time (as if anyone had doubted) and at that point decided to create well water testing facilities and testing local neighborhoods. The refinery said they would pay any mitigation necessary and over the last 20 years has fulfilled that promise.
What are the pros and cons of purchasing a rental property near said refinery, especially knowing that some residents 20 years ago had complained about oily smells in their basements (although you have no first-hand knowledge of the smells).
Is that enough to hold you back from purchasing a property or is it just par for the course with buying near industrial areas? All renters would have obvious knowledge of the location of the refinery.

I don't have a lender yet, that's why I'm asking.

@David Beard thanks for that bit of analysis, if we added $600 to our monthly debt payments (just the mortgage on our home) that would bring us to around 29% DTI ratio. I'm going to be calling a credit union mortgage officer to see what my options are there for these lower loans.

Getting qualified is the same as when we bought our own house? Or are there extra things involved?