Start with a duplex using FHA house hacking where you live in one unit and rent the other. Scale to triplexes and fourplexes using conventional financing. Multi-family offers scale and efficiency in management but requires more capital and experience.
Starting with Duplexes
FHA loans allow owner-occupied duplex purchases with 3.5% down. Live in one unit, rent the other.
Financing
Conventional loans for non-owner-occupied multi-family require 15-25% down.
Analysis
Analyze each unit individually. Factor in vacancy, management, and maintenance for each door.
Scaling
Build equity and cash flow with small multi-family before moving to larger properties.
Management Considerations
Multi-family needs more active management but fewer properties to reach portfolio goals.