How should I leverage my modest funds into multiple properties including rental(s) and a primary residence?
I invest in rental properties personally and for my clients. If your true goal is to own multiple properties, you need to consider starting with a multifamily rental property and resist using a portion of your funds for a separate primary residence.
Initially, focus on four unit rental apartments. These properties should qualify for residential financing, which allows for a lower down payment (i.e. the possibility of greater leverage with more borrowed money) and a lower interest rate on your note than commercial loans (typically for properties with five or more units). Remember, the amount of leverage that a property can support depends upon the amount and reliability of the cash flow to pay the loan. The greater the number of units, the more reliable the cash flow. With fewer than four units, vacancies and/or maintenance issues can more quickly limit the properties ability to pay the loan. Also, it is best if the property is a single building (i.e. more units per structure).