Your first investment should be a 10+ unit multifamily
[{"id": "dlxgbhr", "text": "Until the red hot apt prices adjust for all the new construction in the sector...", "replies": [], "depth": 1}, {"id": "dm2svjm", "text": "What he's saying is not untrue.  Economies of scale, yes, simpler management, yes, more stable cash flow, probably.\n\nBut he glosses over the fact that most newbie RE investors simply cannot get approved for a commercial loan.  With no experience?  There is a very good reason people are more comfortable with 2-4 unit buildings and the associated conventional mortgage. They can get approved for it! The risk differential of 1-4 unit versus 5+ unit is pretty large for a new RE Investor. \n\nOh yeah, article source peddles commercial financing.  All makes sense now.", "replies": [{"id": "dmxvmr8", "text": "&gt; But he glosses over the fact that most newbie RE investors simply cannot get approved for a commercial loan. With no experience?\n\nYep. The advice I gave several friends of mine is aim low initially, single family (but very low price) or duplexes/triplexes where you can put that 25% down but ensure they are performing well. Jumping into the 10+ for a potential buyer is difficult for most buyers unless they have access to private lending or other non-common lines. From the underwriting side of things, the banks would like to ensure the buyer has some idea of what they are getting into or has enough cushion should stuff go wrong, so if a buyer has 4-7 years experience already with a triplex or two they would be much more comfortable underwriting that purchaser for a 10+ plex. \n\nFrom a purchasers pov this is just another problem they face before they acquire said property. Also it after 10+ units depending on the total number involved the purchaser may need to consider not only an onsite manager but potentially a dedicated management company.\n\nSource: Me, been doing the large multi-fam complex/large landowner thing for 20+ years now. YMMV. \n\nedit: I ought to add that in one of my friends' case he asked me my thoughts on a single unit/family house property in places such as the central US states where prices would range from $35-60k but conventional loans for each property were not available (he would have to put together a business proposal or find private lending to take advantage of any significant leverage). Luckily the numbers looked right once we crunched everything and he wasn't risking too much over 1 or 2 properties like that. More importantly after 5-7 years he would have the experience for getting into larger plexes and make a much more comfortable prospect for commercial lenders.", "replies": [], "depth": 2}], "depth": 1}]