Hey all, definitely need some guidance here and appreciate any expertise offered. I ventured into other avenues in life and am now back looking to become a first time property owner looking for a residual income as a result. Me and a partner of mine are looking to get started and are wondering if buying a foreclosed duplex is a good start on the path of becoming a sucessful real estate investor. Any tips and pointers out there to steer me in the right direction? Are foreclosed duplexes a good place to start or am i getting myself in trouble? Please advise with any help guys and thanks for your time.
An owner occupied duplex is a fine way to start investing. You have to live somewhere, and if you buy right you can live in one side for free or even have some income. You also get the advantage of owner occupied loan terms, and get some hands on experience being a landlord. It doesn't matter whether it's foreclosed or not, just that the price/condition/location combo works for you. A property that needs some work can be a great buy if you are at all handy. If you're not, or don't have much experience in that yet, then just be careful that you're not getting in over your head with a major fixer-upper.
Thanks Jean! Very good advice. We will have to look into the owner occupied lease terms you mentioned but chances are better that we will be buying the property and leasing both sides out to start while living in our current residence. We are looking to save enough to be able to purchase the property and hopefully have some left over for repairs. Exciting advice and much appreciated.
A duplex is a good starter investment because it gives the economies of scale with multiple units, but without jumping into the deep end of the pool with apartments. It will also alert you to multi-tenant issues on a small, easily fixable, scale. For example, people who invest in single family homes rarely think about noise control issues, and extra insulation between units to cut down on sound transmission. If you go from SFR to apartments, you won't think to check insulation and firewalls as a due diligence item. They don't think about pets, their affect on common areas shared with other tenants, and the landlord's responsibility to provide safe common areas. Also you'll gain experience in trying to show a unit and the other tenant is helpful, or antagonistic, and how to handle that. If the numbers work--go for it!
Thank you very much Denise you have a good point there. Thats exactly what i was telling my partner. We want to start small and get our feet wet and eventually work our way up the ladder properly without getting in too far over our heads.
What part of Houston are you targeting? We used to live in Cypress, I worked off the SW Freeway in the Arena Towers, and my husband worked just outside the Loop on Post Oak. Houston has so many distinct areas with their own personality, there are lots of opportunities.
We are targeting the energy corridor and the heights in the long run. Right now i know they are building up the energy corridor for more engineering firms and oil businesses so it is still developing further west into the Katy area. As for the heights they are steady growing and putting up more condos by the minute. But we are not picky. Im up for any advice on getting started so wherever there are areas developing we are interested.
trouble is there isn't many duplexes in Katy. And heights mostly played out or too expensive. My two cents.
The majority of multis in Houston are inside the Beltway 8, with the bulk of them being inside the inner loop (610), but not necessarily in the Heights. I always tell my multi family clients you have to kiss a lot of frogs to find your prince, but there are still cash flowing properties out there, especially if you won't be living in one unit.
Thanks Sharon, and that is exactly what me and my partner were discussing. We know we are going to have to start slow so we are prepared for that. So do you by any chance have a listing or site we can visit to streamline our search of properties. That would be awesome.