Start small: buy a single family residence or condo, or even a duplex. This should be a straightforward transaction for both the novice or experienced investor, very similar to buying your primary residence. The lending rules are virtually the same as for a primary residence, and the process is easy to understand.
Hands on or hands off: you can choose to manage the property yourself, or outsource to a professional Property Manager. Even though it impacts your cash flow, it’s probably best for the first-time investor to use a professional Property Manager. Once you get the hang of it, you can start taking some of the management responsibilities on yourself.
Larger apartment buildings, such as 5 units and up (know as “5+”) have different lending rules and property management requirements. These are a great way to leverage your investment, but they need quite a bit more experience, plus a higher tolerance for risk and problem solving ability.
Another great reason to get started with 1-4s:
If you live in one of your units, such as one side of a duplex, you can lower your investment mortgage significantly, and still leverage the full value of the property while it appreciates! With duplexes, you can usually reduce your mortgage by about 1/2.