Starting with a duplex

43 Replies

I am planning to start,and as i have learned from many investors it seems to be better buying a duplex and live in one of the units,but with the rates that i can get approved and the prices in my market doesn’t seem to be at all a Positive cash flowing first deal,that scares me,where should i look to understand better how to make a positive start of the journey?

I would think going the duplex route would be positive in most cases if only for saving your personal living expenses. Rates in my area are quite low right now but still have to compare - have you tried "shopping" smaller local lenders that might be more willing to work with you and may offer to cover some closing expenses? You might also ask about first time home buyer credits. Can you save cash to use towards a downpayment to help you get a better rate?

@Amanda Blain

I haven’t tried yet any options still analyzing everything ,but thank you,yea is something i have to find out about these 2 things regarding some closing costs and about the first time home buyer!

@Vasilii Baban

On Our first duplex our mortgage was $710 and the rent from the other 1/2 side was $375...

That was 7 years ago. Now the place rents for $1200 a month and the mortgage was paid off in 4 years.

@Joshua D.

That sounds great,but the average mortgage i might get approved for example on about a $350k house could be around 2300$ a month and in the area i live that is Northern Virginia right by Washington DC those kind of properties are more then that soo is little complicated for me to think what can be done for positive cash flow as i plan to live in one of the units in first property

Originally posted by @Vasilii Baban :

@Joshua D.

That sounds great,but the average mortgage i might get approved for example on about a $350k house could be around 2300$ a month and in the area i live that is Northern Virginia right by Washington DC those kind of properties are more then that soo is little complicated for me to think what can be done for positive cash flow as i plan to live in one of the units in first property

 Cheapest duplexes in the area are going to be almost $700k in the DC area.

@Vasilii Baban , as @Russell Brazil mentioned, DC is an extremely tough market right now.  Unfortunately so is Northern Virginia. I would suggest reading a bunch in the forums for a different investment area or consider a house hack in NoVA, or moving your sites farther south.  Good luck.

@Vasilii Baban

Have you looked at a SFH with mother-in-law suite? Many investors in my area are converting SFH homes with 2 car garages into mother-in-law quarters. Some choose to then reside in the addition and then Airbnb the main living area. This is also a great way to add equity to a home and gain off of the appreciation, while taking advantage of the higher cash-flow short term rental.

I personally bought a SFH that needed a LOT of work. I fixed it up mostly by myself, and then I'll use the equity as down payment on my next investment with a HELOC. This was a great way for me to add value to the home and gain on the appreciation.

@Jacob Haskins

Honestly I thought about it but had thoughts that in SFH the rent may be low if is a basement for example,people probably wouldn't pay a lot for these kind of suits,and won't be making much profit of it,i am just thinking,don't have much experience so maybe i am wrong

But actually is something to think about because for my area might be a better choice then the duplexes,thanks for the advice

A "duplex" could take many different forms in the dmv, from a not-totally-seperate basement so as not to violate the letter of the law, to an ADU that's sort of a duplex though not separately metered, to a true two unit multi family home.

In Woodbridge at the 350k price point you can buy a detached home and rent out the basement and live upstairs or vice versa, and you can put it a second kitchen under certain circumstances, or house hack with roommates if you’re open to sharing communal space.

Prince William County has specific rules on finishing basements: https://www.pwcgov.org/governm...


There are also rules about number of unrelated people living in one home, though I don’t think it’s enforced much in Woodbridge if you’re not causing problems:

https://www.pwcgov.org/governm...

In 2015 etc it started getting hard to find properties that cash flowed so I past on many of them.  In retrospect almost every deal that someone would have bought then would cashflow like crazy now and have more then doubled their equity.  If inflation comes you will wish you bought now even if it was tough in the begining.

As others have mave mentioned the duplex route is very tough in our area, there are different strategies that you can apply wether it is buying a singlefamily home and rent the basement making sure it is all connected and tenants can access the whole house as @Leo Watts have mentioned or you can go the townhouse route with a similar strategy if your do not have enough capital for the sfh. One thing is for sure, in this area you need to be creative. 

Unfortunately @Vasilii Baban with low inventory driving prices high, both first-time buyers as well as new investors are being shut out of the market.  I would advise waiting until the market drops after the flood of folks who are late on their mortgage payments or are in forebarance default on their loans-   There's going to be a wave of 'deals' coming soon!

Seems like you could at least break even on the $2300 in Northern Va. You have to also factor in the tax benefit and appreciation. If you want more cash flow you could rent rooms but in most cases everything comes down to the numbers. You have to acquire the property at a certain price but it would be hard to find anything different from what you are seeing if only dealing with the MLS.

@Vasilii Baban

It’s much cheaper in Baltimore. You might look in the DMV to see where you could have a short commute while building equity. Not every house hack is a positive Cf but it most certainly can be a wallet saver. I personally bought a duplex in Cleveland, OH and live in the DMV.

Cheers,

Brady