Housing Dilemma

Now that I have per­ma­nent­ly moved to my new city, it’s time to start look­ing for a mul­ti-fam­i­ly rental prop­er­ty to buy!

I am deter­mined to suc­ceed this time after I failed to buy a prop­er­ty in my old city ear­li­er in 2016. I love only pay­ing $400 in rent to live in my friend’s base­ment, but I’d much rather have a place of my own that earns me mon­ey. Plus, the base­ment gets a bit cold when the high of the day is -1.

The path going for­ward seems per­fect­ly clear after com­ing back from Camp Mus­tache SE in Jan­u­ary:

-Find a real­tor.
-Look at prop­er­ties
-Buy a prop­er­ty
-Move in
-Do any ren­o­va­tions
-Find ten­ants
-Prof­it

But there’s this tricky thing called my heart get­ting in the way of The Plan.

Every day on my way to and from work, I pass a house that’s for sale. It’s on a deep lot that ends in trees, which is what I pre­fer for a back­yard. The price is very rea­son­able ($129k or about $750 a month). It’s been recent­ly updat­ed. More than enough space for my stuff and all my hob­bies. So what’s the prob­lem?

The adorable SFH

It’s a sin­gle fam­i­ly house. I couldn’t rent it out unless I want­ed to get a room­mate, which I don’t.

This is the first real chal­lenge to my FI prin­ci­ples I’ve encoun­tered, and I’ve got to say I don’t real­ly care for it. All the Mus­tachi­an or FI-relat­ed things I’ve done in the past have aligned with what I would have done oth­er­wise and so haven’t been a prob­lem. Max out my 401(k)? Done. Max out my Roth? Sure. Keep my reli­able car from col­lege instead of get­ting a shiny new car? Yeah sure nbd.

I feel pres­sure, some­times, as a younger FI blog­ger to be per­fect. Sev­er­al peo­ple have joked I’m a real life guinea pig for the big­ger blog­gers out there (Mad Fien­tist, in par­tic­u­lar, as he actu­al­ly has a real time guinea pig track­er going for an imag­i­nary per­son that is more or less exact­ly at the same point in life as I am.) I actu­al­ly like that title most of the time. I’m pret­ty sure I’m the only one putting pres­sure on myself but I still am stress­ing out over this choice.

Do I con­tin­ue along the path I’ve set out for myself- accel­er­ate my time­line by get­ting a mul­ti-fam­i­ly rental prop­er­ty- or do I con­tin­ue along the slow and sure path and get an incred­i­bly adorable SFH?

Either way, I wouldn’t be set­ting myself back from where I’m at. This choice is about the speed of hit­ting FI. I would love, love, LOVE not to be tied down to this par­tic­u­lar area due to my career. If I could be FI tomor­row, I would take it in a heart­beat despite the fact I’m very hap­py with my new job. I have so much I want to do with my time that doesn’t involve hav­ing a career. Get­ting a mul­ti-fam­i­ly rental prop­er­ty would allow me to reach that so much faster (some­thing like hit­ting FI at 30 instead of 35).

Being FI would mean I could tell my sis­ter, yes, I will go with you on a last-minute ski trip to Cana­da instead of sor­ry, I used up all my vaca­tion already this year to go see you in Eng­land.

On the oth­er hand, if I con­tin­ued on this same “slow and steady” path, I would have all the space I need­ed for years to come to do what­ev­er hob­bies my heart fan­cies. The base­ment is per­fect for stained glass work and a work out area. The upstairs bed­room could be my craft room. One bed­room down­stairs for me, and anoth­er for a guest room. That still leaves me a liv­ing room, din­ing area, and kitchen. I don’t real­ly need a fam­i­ly room, for­mal din­ing room, or a for­mal liv­ing room. The back­yard would be per­fect for bon­fires with friends, a big gar­den, and even room to play yard games like boc­ce ball, bags, or cro­quet.

So, my read­ers, I ask for your advice. What would you do in this sit­u­a­tion? Buy the cute SFH or get a mul­ti-fam­i­ly prop­er­ty and accel­er­ate my FI time­line?

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53 thoughts on “Housing Dilemma

  1. There will be oth­er hous­es as nice as this in bet­ter cities at times bet­ter suit­ed to your pur­pos­es. You have the “fever” and only after you recov­er will you rec­og­nize the neg­a­tives of this place. This temp­ta­tion is a test.

    • Don’t get me wrong, it’s a nice­ly fin­ished base­ment and I love only pay­ing $400. If I were to buy the house, I wouldn’t be able to save much per month towards a mul­ti-fam­i­ly and it would take me a while to save up enough for a 30% down pay­ment.

  2. Aghh, I feel you on this one. It’s tough to bal­ance what you want to do in your heart ver­sus what makes finan­cial sense. We house hunt­ed for about a year and had to learn the hard way about stick­ing to the num­bers.

    So my advice would be to look for that mul­ti-fam­i­ly home. It will accel­er­ate your FI and pro­vide a poten­tial­ly high­er amount of pas­sive income than just a sin­gle fam­i­ly home.
    Mrs. Picky Pinch­er recent­ly post­ed…What A Fru­gal Week­end!My Profile

    • I know what I should do.….. but some­times it’s dif­fi­cult to stay the course. Argh. The dif­fer­ence between own­ing the two prop­er­ties would be about $23k a year which is HUGE. ($9k for mort­gage, $14k in rent brought in). That’s too much mon­ey for me to make the ‘wrong’ choice.

  3. I’m tak­ing the slow­er path to FI. Most­ly due to lifestyle choic­es. Some­times I want to go buy a mul­ti fam­i­ly prop­er­ty, but real­ize the action will cause more stress on my mar­riage. So I would say buy the mul­ti fam­i­ly prop­er­ty now.
    Savvy­Fi­nan­cial­Lati­na recent­ly post­ed…Go VoteMy Profile

  4. This is tough. And I under­stand exact­ly where your heart is com­ing from. One thing that real­ly stood out for me in your post is when you men­tioned you real­ly don’t want to be tied to the area or your job. The house may do both. You nev­er know what sort of unex­pect­ed expens­es you will have with home own­er­ship, even with a new­ly ren­o­vat­ed house. Plus, pick­ing up and leav­ing is infi­nite­ly more dif­fi­cult if you need to sell a house. On the oth­er hand, you could rent the house out if you needed/wanted to leave the area…

    My advice? Take your time! This is def­i­nite­ly one of those deci­sions that deserves ample time to pon­der and eval­u­ate.

    • I plan on buy­ing at least one prop­er­ty around here, and prob­a­bly two, so I will have ties to the area no mat­ter what I do. It’s not a ter­ri­ble thing, but I just don’t think I want to live here for the rest of my life. For one thing, it’s FLIPPING COLD right now and in the win­ter. I want to live some­where where my face doesn’t freeze from going out in -5 degree weath­er :/

  5. Tough choice, and shows that the path to FI is a road full of deci­sions. This is a BIG one (hous­ing and trans­port, hous­ing and trans­port!! Get these two right, and the rest doesn’t real­ly mat­ter). Lis­ten to Aman­da @centsiblyrich, take your time, be inten­tion­al.

    Life is about both $$ AND Liv­ing. You need to have both. I’d sug­gest you build a “Pros & Cons” table, and list as many on both sides for buy­ing the mul­ti-fam­i­ly and the sin­gle fam­i­ly unit. Keep the table open for a few weeks and add to it when thoughts come into your mind. You may be sur­prised by the results.

    Good luck, and keep us post­ed!! We’re all inter­est­ed in the guinea pig’s choice!!

    • Thanks for the reply, Fritz. I’m not mak­ing a move on any prop­er­ty until mid-Jan­u­ary, so I’ve got lots of time to mull over the deci­sion. SO. MUCH. TIME.

      • I found myself in a sim­i­lar sit­u­a­tion with my wife. We (also added tiny house into the com­par­i­son, but) ulti­mate­ly end­ed up choos­ing mul­ti-fam­i­ly. We’re expect­ing to close late January/early Feb­ru­ary. I won­der… what did you choose?

  6. Some­times being so prac­ti­cal stinks right? I would prob­a­bly stay in the base­ment as long as you can muster. 400 and no oblig­a­tions is awe­some. Unless a mul­ti fam­i­ly can cash flow bet­ter than what you’d save there, I’d stay. At the end of the day though, it’s your life. I feel pres­sure to be FI per­fect too but some­times you have to make the right call for you and take risks.
    Julie @Millennial Boss recent­ly post­ed…The Do’s and Don’ts of Plan­ning Your Bud­get-Friend­ly Wed­dingMy Profile

    • It does. I like the base­ment (and pay­ing a flat $400 for hous­ing) but he’s going to try to sell the house this spring so it’s a strict­ly short term kin­da thing. The mul­ti-fam­i­ly prop­er­ties around here have some seri­ous­ly great cash­flow pos­si­bil­i­ties, assum­ing occu­pan­cy lev­els stay up and what­not.

  7. I would rec­om­mend you hold off on buy­ing a SFH until you are sure that is the route you want to go. There will be plen­ty more of them to choose from in the future if that is what you decide. Once you buy a SFH, it is tough to get out of lat­er if you want to make any kind of prof­it or break even if it is short term.

    Per­son­al­ly, I would hold off for at least a year and start mak­ing con­nec­tions with oth­er invest­ment prop­er­ty pro­fes­sion­als. You may decide you don’t want to go the mul­ti-fam­i­ly route. If that is the case, you only end up squir­rel­ing away anoth­er year of mon­ey and a much big­ger down pay­ment on a SFH if that is what you choose.

    Also, If you haven’t joined Big­ger­Pock­ets yet, I would strong­ly encour­age you to do that and also start going to their local mee­tups. You will get tons of advice and meet peo­ple who can rec­om­mend local real­tors who spe­cial­ize in invest­ment prop­er­ties.

    Good luck!

    • Thanks for the response Ryan. I’ve decid­ed to hold off on get­ting a SFH until my rental prop­er­ty port­fo­lio is bet­ter estab­lished.

  8. Like oth­ers have said, take your time and don’t wor­ry about it too much. Hous­es will always be avail­able and a bet­ter deal is right around the cor­ner.

    What pre­vents you from get­ting the SFH and an invest­ment prop­er­ty over time? Just thought I would throw that idea out there since the prices look so low to some­one from the West coast.

    • The only thing stop­ping me from get­ting this super cute SFH is the type of loan avail­able. I will be using a VA loan to get a pri­ma­ry res­i­dence. I don’t want to “waste” the oppor­tu­ni­ty of not hav­ing to have 20 or 30% down for a prop­er­ty. VA loan I can put down what­ev­er I want, which I think will be about 7 or 8% so I have cash on hand to ren­o­vate or update as need­ed. Not to men­tion, my com­pa­ny is pay­ing for the clos­ing costs of any prop­er­ty I buy in the next 12 months.

  9. Clear­ly I have a very dif­fer­ent per­spec­tive than every­one else because I was com­ing here to say buy the SFH! It’s only $129,000! That’s so cheap! I am not at all into rental prop­er­ties though, live in a high­er cost of liv­ing area, and have zero inter­est in mov­ing, so I think my per­spec­tive is a bit dif­fer­ent.

    What I will say though is that you shouldn’t make your deci­sions sole­ly with FI in mind. You should make smart finan­cial deci­sions that bring you joy. Buy a mul­ti-fam­i­ly prop­er­ty if you want the chal­lenge of own­ing and liv­ing in one. Buy a SFH if you want the chal­lenge of mow­ing grass, main­tain­ing the out­door walls of a place, and liv­ing in a SFH with or with­out a room­mate and it makes more finan­cial sense than rent­ing a place. Buy a con­do if you don’t want the main­te­nance of a SFH, though I don’t think your area has con­dos near­ly as much as where I am. Don’t buy a place specif­i­cal­ly to increase your speed to FI — index funds are still pret­ty good if you don’t know you want to own rental prop­er­ty.

    • I’ve always been inter­est­ed in the land­lord­ing side of the FI world. Although, to be fair, the vast major­i­ty of things that inter­est me could also be applied to sin­gle fam­i­ly hous­es. I do want to diver­si­fy my income streams though, and rental prop­er­ties are about as pas­sive as you can get.

  10. We went through some­thing sim­i­lar. We were rent­ing and want­ed to buy, but I wasn’t sure that I want­ed to be respon­si­ble for home upkeep at all, let alone main­tain­ing it for oth­er peo­ple pay­ing rent. So we bought sin­gle fam­i­ly home. Then years lat­er, once we had the swing of home­own­er­ship, we bought a two-fam­i­ly strict­ly as an invest­ment prop­er­ty.

    I would say do the mul­ti-fam­i­ly, as long as you’re sure you want the respon­si­bil­i­ties of home­own­er­ship along with the pos­si­ble stresses/annoyances of hav­ing to find, keep, and live with a renter.

    ALSO: Your com­ment “Rental prop­er­ties are about as pas­sive as you can get” made me laugh con­sid­er­ing what we’re going through right now with some new renters. It’s true some­times, but def­i­nite­ly not always!
    Norm recent­ly post­ed…Finan­cial Impli­ca­tions of the Elec­tionMy Profile

    • Hey Norm thanks for the com­ment. I feel like going into mul­ti-prop­er­ty before doing a SFH is like hav­ing a set of twins before you have a sin­gle child birth. It’s crazy, it’s a mess, but when that sec­ond birth comes around (sfh) it’s going to feel like a breeze!

      …at least, that’s what I’m hop­ing LOL

  11. I think it depends on two things.

    A) is emo­tion worth delay­ing your FI 5 years? (For con­text, I said yes when I bought a new car. But I’m a “car guy” so it was a worth­while “lux­u­ry pur­chase” to me.)

    B) Do you plan on set­tling down with some­one? Because if you do, then you might be look­ing at buy­ing anoth­er house down the road with that per­son. (this is more of a per­son­al ques­tion and don’t expect an answer. It’s just rel­e­vant for you to think about long term since you would either need to rent this prop­er­ty, or sell it for some­thing else. Where the mul­ti fam­i­ly home would just sole­ly used for income at that point.)

    • A) No, it real­ly isn’t 🙁

      B) I would love to! That’s an excel­lent point I hadn’t thought of. Thanks for com­ment­ing!

  12. Run away! I bought the cute sin­gle fam­i­ly home two years ago. Now I’m per­pet­u­al­ly grumpy about the drain on my finances when­ev­er any­thing goes wrong. Cracked toi­let seat? My prob­lem. Heavy rains? Freak­ing about leaks the whole time. But Heart doesn’t want me to move into a rental (where some­one else would pay these things) because this is MY house, and I like it (I have to like it, it’s expen­sive)

  13. I’ve heard from so many friends about how nice it feels to own a home.

    I’ve also had expe­ri­ence man­ag­ing a quad­plex rental prop­er­ty.

    The thing with rental prop­er­ties is that most of the time, stuff will go smooth­ly and you prob­a­bly won’t even be both­ered. It’s just these things that come along once in a while like water leaks or hav­ing bad ten­ants that just ruins your day(s). If you’re a DIY type of per­son, you’re also going to have to do a lot of clean­ing and fix­ing. That’s why I even­tu­al­ly resort­ed to hir­ing a build­ing man­ag­er so I wouldn’t have to deal with most of that stuff.

    If I had to do it all over again, I would’ve nev­er bought a rental prop­er­ty. Yes the extra cash­flow is great but I would’ve glad­ly giv­en that away for my own home so I can work out and have friends over. I don’t like micro­manag­ing and being what I feel like is an adult babysit­ter.

    • I feel like for an extra $15–20k a year, I can han­dle some leaky pipes and clean­ing the units. How­ev­er, I will change that to a prop­er­ty man­ag­er once I get mul­ti­ple prop­er­ties and move out of the imme­di­ate area. Thanks for your input!

  14. Been in the new city a month and already think­ing about SFH? *shakes head sad­ly*

    Rent for now. Give your­self some time to explore, get a feel for the region. Keep track of what you’re expe­ri­enc­ing, though, since your renters will go through the same. Join the local real-estate investors asso­ci­a­tion to speed up this explo­ration, meet like-mind­ed folks, and net­work with many of the ser­vice providers you’ll need.

    As for the “twins” anal­o­gy, well, it worked out that way for Mom with us kids. 🙂

    • To be fair.….…. this is the third time I’ve moved here, so I know the area well already! I like the idea of the real-estate investors meet­ing though!

  15. Well, how much would the SFH rent for if you moved? If it will cash flow well, why not? I agree that a mul­ti­fam­i­ly is usu­al­ly a bet­ter deal, but if it will cash flow well, a SFH is not a bad deal. I would say if you can meet the 1% rule, maybe con­sid­er it.

    • To meet the 1% rule it would need to get $1290 a month. Right now, comps in the area are going for $1200, so if I could talk the sell­er down $9k it’d be a decent rental prop­er­ty. Not great, but it would cash flow.

  16. It sounds like it would be easy to make a rush deci­sion here. For you, I don’t think buy­ing a SFH is a good idea. I’m sure the prop­er­ty is absolute­ly amaz­ing, but in no way am I see­ing any­thing about it that makes sense.
    1. It’s too big — it’s a fam­i­ly home, do you real­ly need all this space at this point? And util­i­ties for all that space as well..
    2. Add tax­es, util­i­ties, emer­gency repairs et.c to the $750 and you’re going to be head­ing back into the ter­ri­to­ry of your old rent.
    3. It’ll be hard­er to rent out than an apart­ment when you decide to move.

    I’ll be look­ing at a SFH for myself in the near future, but there’s 2 of us with the hope of +1 in the next year and +2 in the next 3. We’re also plan­ning to move into an area where mul­ti fam­i­ly units are rare (super small town) and the most we can get if we’re lucky is a base­ment suite in the house. Our plan is to airbnb a bed­room to make up for it though.

    Since you seem to have a bit more options for mul­ti fam­i­ly hous­ing, keep sav­ing up for that down­pay­ment, take your time and make the deci­sion when the time and oppor­tu­ni­ty is right. Also, you have so much chang­ing for you right now, it’s stress­ful as it is, don’t add the stress of being a first time house own­er!!

    As for hav­ing to be per­fect, you are you! Every­one is so very dif­fer­ent and only you can know what’s right for you. It’s of course easy to get cloud­ed by our emo­tions and desires for a big change. Just breathe in, breathe out. I like read­ing your blog because you are unique and have a dif­fer­ent out­look than so many oth­ers. Not because you’re a “test sub­ject”.

    Best of luck!

    • It would just a tad on the big side for me alone, but I could spread out and have lots of room to work on my hob­bies! The $750 cov­ers PITI, but who knows what con­di­tion every­thing is. It was recent­ly ren­o­vat­ed, but that could just be the real estate equiv­a­lent of shin­ing a turd.

      Also, are you try­ing to make me cry this ear­ly in the morn­ing? Thank you for all the kind words. Seri­ous­ly, you made my day!!

  17. I have to say I’m more pos­i­tive on the house. The dif­fer­ence between $1200 and $1290 isn’t huge, hon­est­ly. While I hear you on the mul­ti­fam­i­ly, and I own one myself, this doesn’t seem like a ter­ri­ble deal and it would def­i­nite­ly raise your qual­i­ty of life!

    If you have the for­ti­tude (this is the hard part), why not go and look at it, with a firm price in mind above which you will. Not. Budge.

    As to moving…I think I have learned that one often ends up where one is.

    I’m dying to know more about the MMM track­er.

    • I think I’m going to stick with the orig­i­nal plan of buy­ing a MFH. I sigh a lit­tle every time I dri­ve past the cute house though.

  18. Why are you in such a rush? Buy­ing a space heater for your $400/month pad is much bet­ter than spend­ing over $100k on some­thing you don’t even real­ly want. Wait for the right mul­ti-fam­i­ly home if that is what you real­ly want.

  19. I’m not sure you’ve run the num­bers com­plete­ly yet: How much of the $750 month­ly pay­ment is mort­gage prin­ci­pal? You should sub­tract that before com­par­ing to your cur­rent $400/month pay­ment since the prin­ci­pal part is going to equi­ty. You could also fig­ure the tax sav­ings you’d get on the inter­est and prop­er­ty tax deduc­tions, assum­ing you’d item­ize. These last two would only apply for as long as you’re rent­ing from the cur­rent place since you’d get those if you were to buy a MFH. And obvi­ous­ly you’d need a month­ly main­te­nance bud­get for the SFH. The net dif­fer­ence is still prob­a­bly neg­a­tive, but maybe not as big as it ini­tial­ly appears

    A cou­ple oth­er thoughts:
    * Do you think you’ll find a viable MFH before your cur­rent gig expires?
    * Will Mega­Corp (or MegaCorp’s relo com­pa­ny) pay clos­ing costs on an MFH like you are plan­ning? Seri­ous­ly, are you real­ly REALLY sure?
    * This com­ment sur­pris­es me: “but who knows what con­di­tion every­thing is. It was recent­ly ren­o­vat­ed, but that could just be the real estate equiv­a­lent of shin­ing a turd.” You are allowed to inspect a home, infor­mal­ly and for­mal­ly, before pur­chas­ing to answer those ques­tions. 🙂 If I were plan­ning to do most of the ini­tial prop­er­ty man­age­ment work for a home, I’d pre­fer to have some expe­ri­ence at buy­ing and main­tain­ing a home before jump­ing in. That’s just me, but a point that seems rel­e­vant to this dis­cus­sion.
    * If you’re buy­ing a SFH to live in it for some time before rent­ing, the 1% rule doesn’t have to be met exact­ly. Rent might be high­er in a year or two (or might not!)

    I’ve strug­gled with the head vs heart deci­sion on FI as well. Just like you don’t want to waste all your life work­ing for Mega­Corp, you want to be care­ful not to waste your life while work­ing toward FI. Only you can deter­mine what is defined as “waste”, though. Good luck!

    • Hi T-Rav, thanks for com­ment­ing. I think I will be able to find a MFH eas­i­ly. They are much more abun­dant in this area than my last city, and I know this area way bet­ter. I haven’t includ­ed cal­cu­la­tions for the MFH com­par­ing it to the $400 I’m pay­ing now. This is a very tem­po­rary gig. Mega­Corp is real­ly going to pay all the costs asso­ci­at­ed with my hous­ing search. All I have to do is use their ecosys­tem for every­thing, which isn’t that big of a deal to me. I would absolute­ly inspect any prop­er­ty thor­ough­ly before I buy it. Right now I’m in the stare long­ing­ly as I dri­ve past phase.….

  20. Inter­est­ing post. What have you come across so far in terms of mort­gages that allow you to sub­let a part of the house (which is what I assume you aim to do?) Have the loan terms been stricter for it? or do they want a big­ger deposit?

    • The mort­gage I will be get­ting doesn’t spec­i­fy any­thing against sub­let­ting. Tech­ni­cal­ly, since I’ll be buy­ing a prop­er­ty specif­i­cal­ly designed for mul­ti-fam­i­lies, I won’t be sub­let­ting so I’m not wor­ried about it. I don’t need a high­er deposit since this is my first prop­er­ty and can get a con­ven­tion­al mort­gage for it.

  21. I would love, love, LOVE not to be tied down to this par­tic­u­lar area due to my career”

    If your near term goal is to be some­where else, you should not buy a SFH or a mul­ti unit rental. Both can slow you down. Save your mon­ey and work on get­ting to the area you want to base your­self in for decades to come. That should be your 2017 goal.

    If you were in some dis­tant city, would your cur­rent loca­tion be the place you want to have rental units? If not, don’t do. When you move the cost of run­ning the units goes up (you will need a local prop­er­ty man­ag­er) and the return goes down. If you don’t plan on keep­ing the rental for at least a decade, you might want to rethink.

    If you find the right job in the right area, who needs the has­sle of a SFH dis­po­si­tion to com­pli­cate things. It’s real easy to exit an apart­ment (worse case is the remain­ing months on the lease). The need to sell a SFH at the wrong time can be painful.

    Want more space on a budget…keep an eye on Craigslist for a garage apart­ment or oth­er sit­u­a­tion where a home­own­er is rent­ing a sin­gle unit. You are prob­a­bly their ‘dream’ ten­ant and like­ly the rent will be well below mar­ket.

    • I don’t know where I want to set­tle down full time after achiev­ing FI. How­ev­er, the rental mar­ket here is too good to pass up, espe­cial­ly as it will accel­er­ate my path to FI. Regard­less of where I end up, I will be hold­ing on to these prop­er­ties for many, many years to come. The prop­er­ty man­age­ment fees are built into any prop­er­ty I’m look­ing at — I’ll just pay myself the fee until I’m no longer able to han­dle the day to day oper­a­tions. Thanks for com­ment­ing!

  22. I’m a 35-yr old real estate investor who start­ed invest­ing 5 years ago. My only regret is that I didn’t start 5 years before that. I’m not exact­ly at FI yet, but I quit my job two years ago to go back to school and have decid­ed to not get a job post grad­u­a­tion (my wife doesn’t work and stopped work­ing five years ago…I nev­er earned more than $50k/year and hadn’t saved a dime until 5-years ago). There have been some stress­ful months, but I do see the FI-light at the end of the tun­nel.

    Buy the small mul­ti (four or few­er units; you can still use VA loans). You’ll get expe­ri­ence land­lord­ing, and if you buy it right, you could even hand man­age­ment off to some­one else while earn­ing pas­sive income. There are too many ben­e­fits for real estate invest­ing, espe­cial­ly when some­one else is pay­ing off your mort­gage!

    Good luck!

  23. As a for­mer prop­er­ty man­ag­er (40 unit build­ing), I sug­gest work­ing for some­one else as a prop­er­ty man­ag­er before pur­chas­ing a rental. Every­one, in the first year or two on a job, makes mis­takes. I had a good men­tor (build­ing own­er) who helped my wife and I min­i­mize mis­takes, max­i­mize cash flow, and clar­i­fy what our skills allowed us to do (and not do). Even with a build­ing of this size, we treat­ed this as a side hus­tle. We made mis­takes, the build­ing own­er pro­vid­ed excel­lent sup­port and train­ing, and we *did not* have to pay out of pock­et for our mis­takes. Own­ing rentals can work well, allow­ing some­one else to train you makes for a much low­er stress entry point.

    • Thanks for com­ment­ing Karl! I agree, prac­tic­ing on some­one else’s rentals is a great way to get expe­ri­ence. I don’t know of any­one I can do that with in town yet, but I do have sev­er­al men­tors to bounce ques­tions and ideas off if I get into a rut.

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