SFR or occupied duplex

[Matt R.]

What would you rather buy, an occupied duplex(cash flowing) or an empty sfr? If it was your first deal, what would be more attractive to you, or if you were recommending a first deal fo a newbie?

[Bill Gulley]

I told some good friends that wanted to get into real estate as buy and hold types to go with a nice low maintenance, good location duplex. When you have a vacancy, it's still 50% occupied. Stagger the leases and it more likely you will always have income and not get stuck making the full payment alone. In my area, they rent very well, so check you market. IMO, in a renter's eyes, the worst is a hohum appartment building, then a 4 plex, then a tri-plex, then a duplex and the most desirable is the SFD. (hohuum, is not a complex with all kinds of amenities, swimming pool, tennis court, club house, weight room, etc. those are a different market)

The duplex won't appreciate like a hosue in a good location, but it is more stable and if the cash flow is about the same, it's usually a better investment over time. Another point is that one tenant might be older and can't do alot of yard maintenance, the other tenant can. If you had an elderly person in the house, you'll be mowing or shoveling snow, or paying to have it done. Mine have been better than the SFDs. You can also sell a duplex to one of the tenants down the road, as I did. A nice duplex in a good location will appreciate at about the same rate is the sfd in that neighborhood, and such is reflected in the rents. When you sell, it will first be all about the cash flow, unless you sell to a tenant, then it's still about cash flow from the other unit, but it's a less expensive property for that owner to own and have a property in that condition/location. IMO! Bill.