Investment with Duplex,Triplex,Fourplex

Member since 2024 · 12 posts · 3 votes

Hi everyone I'm 19 years old renting an apartment as of 4/23/25. I make around 70k a year and have 25k saved. I currently own outright a cabin and a piece of land in Idaho but currently live in Oregon. I want to start getting into the rental business and buy a property. I have a trust fund that has a good amount of liquid cash. My main question here is should I spend most my capital to put 20% down on a property around 500-600k, should I use some equity in the paid off properties to buy another few properties/one big property, should I spilt the money between 2- 250-300k properties or should I utilities the FHA loans and house hack with a rental property. Any advice is appreciated thank you.

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Chris Watkins

Lender · Eugene, OR · Member since 2021 · 245 posts · 154 votes

Money down is the same between conventional and FHA for 2-4 units. The limitation you're likely to run into is the debt-to-income (DTI) ratio. Essentially, you can only have a total debt level of 50% of your total monthly income (55% for FHA). Your work income + any rental unit income (x 75% for expensese) = total income.

If you have $70k work income and $60k rental income (3 units of that fourplex on Powell), that translates to ~$9600/mo. 50% of that is $4800, so that's the max debt you can carry between your housing, credit cards, student loans, etc... so if you have no other debt you can qualify for a $4800/mo mortgage payment. Subtracting insurance and a guess at property taxes, your maximum principal & interest payment would be ~$4200/mo.

At an interest rate of 7%, that get to roughly $630k maximum loan amount. If you had 5% for a down payment, you could buy a $655k property. But that Powell property costs $890k, so you'd need $260k to buy that particular fourplex.

Buying a multi-family property brings a few extra variables, but the first part of any search is to figure out how much loan you can qualify for based on your income, cash and credit, and how much you can afford (they're not the same thing), then figure out what properties fit into that budget.

Hopefully this is more clear than my original post. Reach out and we can dive deeper!

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Jaycee GreenePro Member
Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 727 votes
1y
Quote from @Ryan Ramsay:

Hi everyone I'm 19 years old renting an apartment as of 4/23/25. I make around 70k a year and have 25k saved. I currently own outright a cabin and a piece of land in Idaho but currently live in Oregon. I want to start getting into the rental business and buy a property. I have a trust fund that has a good amount of liquid cash. My main question here is should I spend most my capital to put 20% down on a property around 500-600k, should I use some equity in the paid off properties to buy another few properties/one big property, should I spilt the money between 2- 250-300k properties or should I utilities the FHA loans and house hack with a rental property. Any advice is appreciated thank you.

Hey @Ryan Ramsay, welcome to the BP Forum! If you can house hack, I'd suggest going down that route first. What type of property would you target if you house hacked, a duplex, triplex, quadplex?
[email protected]
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- Ryan Ramsay
  OP
  Member since 2024 · 12 posts · 3 votes
  1y
  @Jaycee Greene I was thinking Triplex or a quadplex. Duplex prices are too high and have low CAP rates.
  0 Reply
- Jaycee GreenePro Member
  Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 727 votes
  1y
  Quote from @Ryan Ramsay:
  
  @Jaycee Greene I was thinking Triplex or a quadplex. Duplex prices are too high and have low CAP rates.
  
  @Ryan Ramsay Turnkey or are you open to some rehab/value add?
  [email protected]
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- Ryan Ramsay
  OP
  Member since 2024 · 12 posts · 3 votes
  1y
  @Jaycee Greene very much open to rehab/value add
  0 Reply
- Jaycee GreenePro Member
  Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 727 votes
  1y
  Quote from @Ryan Ramsay:
  
  @Jaycee Greene very much open to rehab/value add
  
  I'm not sure if/how much rehab it would need, but what about this property: 15 NE 127th Ave in Portland?
  [email protected]
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- Ryan Ramsay
  OP
  Member since 2024 · 12 posts · 3 votes
  1y
  @Jaycee Greene that was actually one property I had saved to research. I also have this one I saw 4915 SE 111th Ave, Portland, OR let me know what you think about this one.
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- Jaycee GreenePro Member
  Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 727 votes
  1y
  Quote from @Ryan Ramsay:
  
  @Jaycee Greene that was actually one property I had saved to research. I also have this one I saw 4915 SE 111th Ave, Portland, OR let me know what you think about this one.
  
  @Ryan Ramsay If you're ever considering building another building (or an ADU), that one on 111th looks like a nice parcel. Have you run any numbers on this one?
  [email protected]
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- Ryan Ramsay
  OP
  Member since 2024 · 12 posts · 3 votes
  1y
  @Jaycee Greene not yet I'm getting all the info from the realtor. The rents are, 1380,1250 and estimated 2400 for the bigger house.
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Christine Mulkins
Rental Property Investor · Medford, OR · Member since 2017 · 94 posts · 115 votes
1y
I agree that house hacking a 4 plex would be a great plan! This 4-plex on SE Powell is interesting. (I'm assuming you're looking on the east side based on previous comments?) https://www.zillow.com/homedetails/7215-SE-Powell-Blvd-Portland-OR-97206/54001847_zpid/?utm_campaign=iosappmessage&utm_medium=referral&utm_source=txtshareRents are pretty good. It also appears to be fully rented so you'd have to ask a tenant to leave which can be tricky and expensive in Portland due to landlord/tenant laws. It can be a contingency of sale - seller to fully remove a tenant and leave a unit vacant (that is, if you plan to live in one of the units).
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- Ryan Ramsay
  OP
  Member since 2024 · 12 posts · 3 votes
  1y
  @Christine Mulkins yes I was kinda hoping to live in one unit but good to know. I'm going to research that property as well.
  0 Reply
Ryan SpathBusiness Member
Real Estate Agent · Boise, ID · Member since 2017 · 578 posts · 379 votes
1y
@Ryan Ramsay welcome to the amazing world of investing! House hacking is definitely the way to go! Portland is a great market (I used to live in Tigard) the landlord tenant laws are a bit tricky so be sure to become familiar with these especially if you purchase a property with tenants in place. I'm local in Idaho, Boise specifically if I can help in any way, please reach out.
[email protected]208-600-2814
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Dalton Summers
Real Estate Broker · Cleveland, OH · Member since 2023 · 49 posts · 32 votes
1y
I often notice that Borrowers face challenges meeting the FHA self-sufficiency rule for triplexes and quads when putting down only 3.5%. Just something to consider.

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- Chris Watkins
  Lender · Eugene, OR · Member since 2021 · 245 posts · 154 votes
  1y
  Quote from @Dalton Summers:
  
  I often notice that Borrowers face challenges meeting the FHA self-sufficiency rule for triplexes and quads when putting down only 3.5%. Just something to consider.
  
  The house hack course is likely your best course of action with your situation. $70k/yr can get you into a loan of around $350k at 7% assuming you have no other debt. Adding the higher three stated rents in the listing get you to about a $630k loan amount, so you'd need $260k + closing costs to make that deal work.
  
  What Dalton said is true for almost all of the tri- and four-plexes in West Coast markets. I would steer towards a conventional loan for a househack (you can do up to four units). Conventional has some downside (higher rates, lower DTI threshold) but many benefits (easier property underwriting, more likely to get your offer accepted, and more).
  If you want to leverage your paid-off properties (within reason), that can make your next purchase(s) go a little farther.
  In general, it takes a bit of investment (time, money, or both) to get a cash-flowing property in Portland right now. The long-term appreciation is the better play rather than hoping for lots of income from the start.
  I'm happy to dive into more details if that would be helpful! Shoot me a DM or reach out via my contact info.
  
  1 Reply
- Ryan Ramsay
  OP
  Member since 2024 · 12 posts · 3 votes
  1y
  @Chris Watkins I see. I was just really hoping to use FHA because you don't have to put as much money down. Meaning I could leave my money in investments in the stock market. And maybe I misunderstood but are you saying I'd need 260k for a 630k loan amount?
  0 Reply
Ryan Ramsay
OP
Member since 2024 · 12 posts · 3 votes
1y
@Brian Tomczak would you send me the address or a link to where to check it out please?
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Chris Watkins
Lender · Eugene, OR · Member since 2021 · 245 posts · 154 votes
1y
Money down is the same between conventional and FHA for 2-4 units. The limitation you're likely to run into is the debt-to-income (DTI) ratio. Essentially, you can only have a total debt level of 50% of your total monthly income (55% for FHA). Your work income + any rental unit income (x 75% for expensese) = total income.
If you have $70k work income and $60k rental income (3 units of that fourplex on Powell), that translates to ~$9600/mo. 50% of that is $4800, so that's the max debt you can carry between your housing, credit cards, student loans, etc... so if you have no other debt you can qualify for a $4800/mo mortgage payment. Subtracting insurance and a guess at property taxes, your maximum principal & interest payment would be ~$4200/mo.
At an interest rate of 7%, that get to roughly $630k maximum loan amount. If you had 5% for a down payment, you could buy a $655k property. But that Powell property costs $890k, so you'd need $260k to buy that particular fourplex.
Buying a multi-family property brings a few extra variables, but the first part of any search is to figure out how much loan you can qualify for based on your income, cash and credit, and how much you can afford (they're not the same thing), then figure out what properties fit into that budget.
Hopefully this is more clear than my original post. Reach out and we can dive deeper!
2 Reply
- Ryan Ramsay
  OP
  Member since 2024 · 12 posts · 3 votes
  1y
  @Chris Watkins yes that makes a lot more sense. Sorry I'm not used to a lot of the terms yet. Another thing I was thinking about is waiting until the market drops more and to get a better price on a triplex or fourplex. Do you think it would be in my best interest to wait until prices begin to drop?
  0 Reply
- Jaycee GreenePro Member
  Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 727 votes
  1y
  Quote from @Ryan Ramsay:
  
  @Chris Watkins yes that makes a lot more sense. Sorry I'm not used to a lot of the terms yet. Another thing I was thinking about is waiting until the market drops more and to get a better price on a triplex or fourplex. Do you think it would be in my best interest to wait until prices begin to drop?
  
  @Ryan Ramsay How long are you willing to wait and how will you know when they "drop"?
  [email protected]
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- Ryan Ramsay
  OP
  Member since 2024 · 12 posts · 3 votes
  1y
  @Jaycee Greene A year or so. When prices start decreasing and the asking prices for homes start going down.
  0 Reply
Chris Watkins
Lender · Eugene, OR · Member since 2021 · 245 posts · 154 votes
1y
This is a common question from buyers: should I wait until prices drop, or rates drop?
The (likely) scenario is that prices are not going down in the Portland area. They may flatten out, or dip a tiny bit, but the market fundamentals will keep a strong price floor under where we are today. Why?
Firstly, there is a housing shortage in the area. More people want to be there than can live there now an the city has been under-building for decades. Demand is likely to remain higher than supply for a long time, which pushes prices up.
Secondly, if rates stay elevated (we're not that high above historical norms), that will be because inflation is still a problem and the Fed is keeping rates higher to combat it, and asset prices rise in inflationary periods. If rates fall, that is most likely because the economy is slowing down. As rates fall, more people who have been 'locked' into their low-rate mortgage will consider buying again, demand goes up, prices go up. Waiting for rates to drop means you'll be paying more in the future.
The only way (that I see) prices dropping considerably is in a bigger economic crash that decimates demand across the Portland area. That's pretty unlikely, so I wouldn't encourage anyone to wait for it to happen to be able to buy.
Success in real estate is more about time in the market than timing the market. If you can afford the payments and are ready to hold for >3-5 years, buy now and let inflation work for you, not against you.
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Kerlous TadresBusiness Member
Realtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
1y
Hey Ryan, an FHA loan and house hacking is a great move with minimal down payment and the rental income can help cover your mortgage. If you're looking to scale faster, consider tapping into the equity in your cabin and land through a cash-out refinance or HELOC to buy more properties, but keep the added risk in mind. Alternatively, splitting your capital between 2-3 lower-priced properties gives you more diversification, though it means managing more units.

Lastly, putting 20% down on a larger property could be an option, but you'll have higher upfront costs and less liquidity, so make sure it provides solid cash flow. I'd suggest starting with house hacking to gain experience, then build from there.
[email protected]614-490-1163
Kerlous Tadres | Reafco Real Estate541 Reviews
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