House Hacking - Duplex or triplex?

56 Replies

I am currently living in a condo with a roommate helping me pay my mortgage. I re-did the kitchen, floors (hardwood), bedrooms and finished the basement.

I am looking to use the equity I built in this condo as well as money I am currently saving to jump into real estate investing. My first move would be to use my VA loan (no money down) and either get a Duplex/Triplex, live in one of the units and rent out the rest for a year while invest in other properties. I would fix up my side while living there most likely - touch up the other sides before renting out.

I live in Worcester, MA and the real estate here is very expensive. For a Duplex I feel I have to get no more than a 250k property to break even while living there (been looking around and hard to find). A Triplex would cash flow more, but it would be a big stretch (Maybe future rent would help me get one) and I feel be better long term.

Should I start with a duplex and have not much cash flow if any or try to stretch into a triplex? Any areas around worcester that people are currently investing in that has been working well and a little cheaper?

If you can find a side-by-side duplex in Worcester in a nice mostly single-family neighborhood it will rent out for a premium. A remodeled 3BR unit in a triple decker will rent for $1700-$1900/mo but a remodeled 3BR single family house will rent for $2000-$2200/month. 

I have a side-by-side duplex in a single family neighborhood and the units rent more like a single family than a triple decker. It seems easier to find duplexes in the better areas of Worcester also, so you might have more to choose from.

Definitely good to read up before taking the dive in. 

If you go on neighborhood scout and look at a crime map you'll get a good idea of the nice areas. Be careful though, because areas can change street-by-street. My duplex is in the Beaver Brook neighborhood on Walworth St. I'm on a good street, but a few blocks east of me it turns into Main South (not so good).

I like a lot of the neighborhoods on the west side of Worcester just North and/or West of Newton Hill. I also like the neighborhoods off of Lake Ave just south of route 9 and the area off Plantation St. just north of the EcoTarium. I've heard a lot of good things about the North side of Worcester (east of Indian Lake), but haven't ventured up there mich myself.

Also don't underestimate the "cute" factor. Our duplex is a cape house with a second unit built off the back. My wife immediately deemed it as the cutest place she had seen in Worcester. It turns out most of the tenants have the same reaction, so it rents out pretty quick.


Hey Wendell, I'll second the West Side of Worcester - although I dont own any real estate there, I've spoken to long time Worcester real estate agents and they say the West Side is considered "suburban" Worcester. I'm going to start looking at side - by - side units myself.

There is a lot more to Worcester than the west side! Lots of cool neighborhoods and plenty of places you can make money on with the right focus. Side by side units garner better rents, but location is the key. I suggest seeing about 10 buildings before you make a decision. I go out with groups on Saturdays to get people educated, let me know if you want to join. Keep in mind that most of the good properties in Worcester trade off market, prior to MLS, and if something nice gets to MLS you need to be ready to jump. That is why you need to know the market and the neighborhoods. PM if you want to join on a Saturday Worcester Tour.

Definitely stretch for the triplex if you can @Wendell Butler . I try to buy real estate for "future me" not "current me". Future me would want the extra unit to help with the overall financials versus just having the duplex. It will also help you currently (economies of scale almost always win) as long as you can make the numbers work on the buy side in terms of financing. 

Hey Wendell, I house hacked my first 4-plex and was cashflowing from day 1. I found that the income from the other renters was able to pay for a lot of the repairs so I don’t need to take out of my savings as much. 

When you say stretch what do you mean? Let me n one of this helps, good luck.

@Wendell Butler Like several of the others in this chat, I would recommend at least triplexes in the Worcester, in terms of cash flow this is the best option that I have seen, although I'm interested to look into the more suburban duplex numbers that were mentioned.

As far as VA loan goes, if you haven't dealt with this yet or looked into it, I would recommend looking into what the VA inspection and VA appraisal look for to mentally get ahead of the process. When you are looking at properties over time you will get to know the common oddities that come with some of these older buildings, if you haven't seen any at your current residence.

- Ian Hogan

@Caleb Johnson by stretch I mean based on my current income currently for what I can qualify for. I wouldn't buy outright cash, I would utilize my VA loan for my first house hack. Worcester triplexes seem to be quite expensive and possibly out of my range to qualify (unless I can utilize future rent income from other units).

@Wendell Butler

I house hacked two duplexes before buying a single family home for my family. I’m surprised to hear a duplex would be a break even point. Maybe your rents aren’t as High there. In any case I would stretch for a triplex if I were you. If you dont have kids and it’s easier to do in life now then make the sacrifice before ya do.

I will say if it’s the cost of a triplex that is concerning then try shelling out a little cash and write letters to owners of duplex and triplexes in the areas you prefer. Local title companies should be able to get that list.

Let the cash flow numbers dictate what route you go though.

Best of luck!

@Jeff Hornberger good ideas, and yes here in Worcester the properties are pretty expensive and the rent isn’t quite high enough that in a duplex you can cash flow while you are house hacking (for the most part it seems). With a triplex you can cash flow while house hacking easily here though.

@Wendell Butler Triplex, and make sure you find a bank that will let leverage rental income in the underwriting process with zero landlord experience. Also make sure they allocate 75% of the rental income the units generate. If the units are vacant, they will take the FMV rent rates.

Also be prepared to put something down. Not sure how competitive your market is, but if others are offering 50 100k down, their offers will be more attractive.

You can also go higher on list price than non veterans because you have no PMI expense and also may have a veterans property tax exemption %. But that depends if MA does that. NY does. I get a 15% property tax exemption as a veteran. Would be 50% if you separated with a disability.

Happy to discuss if you have any further questions.

Good luck!

@Adam Melon wow did not know about the possible tax exemption, that would be awesome! And yeah it’s seeming I may have to put some money down to get a triplex, which is okay since I’ll have profits from the equity from my condo I fixed up.

So different banks have different criteria regarding the VA loans and potential rental income? I thought VA loans were all the same criteria, but it really depends on the lender you go through correct? I have a year experience as a landlord currently, but not 2 years (which is what VA loans look for I guess). So I'll need to most likely get a triplex with tenants already in place (paperwork and documented) to get the potential rental calculated in.

What are side-by-side duplexes? 

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Originally posted by @Michael DeLaMarre :

If you can find a side-by-side duplex in Worcester in a nice mostly single-family neighborhood it will rent out for a premium. A remodeled 3BR unit in a triple decker will rent for $1700-$1900/mo but a remodeled 3BR single family house will rent for $2000-$2200/month. 

I have a side-by-side duplex in a single family neighborhood and the units rent more like a single family than a triple decker. It seems easier to find duplexes in the better areas of Worcester also, so you might have more to choose from.