Everett Duplex - Feedback Needed

7 Replies

Hello!

My goal is to build a real estate portfolio. My first goal is to purchase an owner-occupied duplex/tri/quad. I am having difficulty locating properties that pass the 50% rule. Honestly I feel a little jealous when I see different areas with much lower prices!

I have a few months to continue looking, however I this is my possible scenario: There are few options which I lose ~$100 per month per the 50% rule. Since this would be owner occupied, is this still acceptable? I would manage my own property etc.

I will be working in Mukilteo and wife will be at University of Washinton and we are looking at any place that is <40 minute travel time during rush hour.

Am I going about this the right way? A duplex makes a lot of sense to me, but the Puget Sound market sees quite high.

@Chris Cantrell you would have to post the actual number before we could give you any real feedback on whether or a deal is a good one or bad one. Prices and return rates do vary a lot by location. Feel free to look some up you are interested in and run the numbers by us. Good luck

@Chris Cantrell

I invest in Everett, WA, right around the corner from Mukilteo. I own a pair of duplexes and a fourplex. You will be hardpressed to find 2-4plexes on the MLS that meet the 1% rule, let alone the 2% rule. However, this is much better than Seattle where properties hemorrhage money according to the 50% rule.

I would say that paying $100/mo mortgage sounds like a decent deal.

@Grant Fosheim

Thanks Grant, that is really useful information for me. Can you help me understand how paying $100/month is a good deal?

Consider this example duplex: $1200 mortgage, each room rents for $1000, and 50% rule estimates upkeep costs at $900 a month. This is a made-up property because I don't have the numbers with me.

Income: $2000

Expenses: 1200 + 900 = $2100

Loss: -$100

If this is seen as a good deal to you, what makes it that way?

Thank you in advance.

Are you including the management fee in that $900? I realize that you are self-managing, but if you are using the 50% rule, you should account for that out of the right 50%.

Originally posted by @Richard C. :
Are you including the management fee in that $900? I realize that you are self-managing, but if you are using the 50% rule, you should account for that out of the right 50%.

I think I understand you. I am including the management fee in the 900. Does this make sense?

@Chris Cantrell

My apologizes, I misunderstood you initial post. Your example below is not a good deal:

$1200 mortgage, each room rents for $1000, and 50% rule estimates upkeep costs at $900 a month.

Income: $2000

Expenses: 1200 + 900 = $2100

Loss: -$100

I thought you were indicating that your income - expenses would equal -100 and leave you with a unit to live in, essentially resulting in you paying 100/mo for your rent.

Sorry for the confusion.

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