Duplex Purchase

5 Replies

I am new to real estate investing, and I would like to make my first purchase with a Multifamily unit in the Louisville, KY market. I would like this investment to supplement my current income, and over 10 years build a sizable real estate portfolio that will allow me to leave corporate America and spend 100% of my time focusing on growing my units. My first question is, what is the best strategy to purchase your first property with limited funds? Should I partner with someone, or go alone? 

@Michael Kreitzer   - I'd recommend you move into one half of it and thereby acquire it with owner occupied financing.  It will be the cheapest/easiest loan you'll ever get.  

Feel free to yell if there's anything I can do to assist or if you'd like another set of ideas on the deal to see if it looks like a  winner.


- Chuck

Hey @Michael Kreitzer this is a great question that many people struggle with and usually leads them to not doing anything. You must great creative! (Brandon's Book through BP is a great start to get your mind thinking!) AND take action.

I will tell you that depending on your price range and area, finding a multiunit is going to be a little more difficult here in Louisville, KY but Chuck highlights one of your best options which would be to live in one half and rent the other...this would allow you to finance it as low as 3.5% on an FHA loan (some lenders can do a 3% down conventional) as an owner-occupant. Also some other things to consider:

*Do you currently own any property that has equity? You could use this as part of your down payment.

*How about any friends or family that might be interested in working with you? While family can be tricky you might have someone that would be willing to help finance the deal or secure the loan or privately finance the deal.

*How about owner financing? This is not as easy to come across but it is out there.

*Tire landlords is another good one, sometimes they'll be willing to sell at a discounted price so they don't have to deal with the property anymore.

*I don't have much experience with commercial loans but I did just have a friend of mine purchase a 4-plex with 10% down. I am actually contacting that loan officer today for more details for myself.

Hopefully this will get you thinking in the right direction. Michael, Im a broker and investor myself so certainly feel free to touch base with me if you like to discuss more 502-727-9784. Thanks!

Hi @Michael Kreitzer. The question you ask really comes down to dollars. Chuck and Sean make great points above about moving into one half of it if you're talking about a duplex- or even up to a fourplex.

However you used the word multi family and that could obviously mean something larger. The size of what you acquire will depend on either your bank roll - or like Sean mentioned above, getting creative.

So the 1st few questions I have are what type of capital are you working with?

What's your credit like?

How much income do you need to leave your corporate America job?

This is a start of what's needed to truly answer your question.

Congratulations on looking into this and I wish you all the best. Feel free to contact me if you'd like to discuss in detail. 

@Michael Kreitzer   Hello and welcome to BiggerPockets! It's a great site for networking and learning!  I agree with Chuck B.  Owner occupancy loans are a great way to get started with minimal down payment!  Feel free to contact me personally if you have any questions! 

@Michael Kreitzer  

As others have said FHA is the way to go and occupy one of the units.

As for conventional financing; 

Freddie Mac allows 80 percent LTV on 2-4 units.

Fannie Mae allows for 85 percent LTV on a 2 unit

Fannie Mae allows for 75 percent LTV on a 3-4 unit

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