Duplex... Impossible? I am being told so.

25 Replies

I have been looking for duplexes. I have been working with a real estate agent that always find a way to discourage me or tell me how impossible it is to get financing for a duplex with FHA? is that right? is it impossible? should i look into conventional loans only? or is it time to find a different real estate agent? Am i being unrealistic when i am trying to find something tat will be a good investment that could be purchased with low down payment (3-3.5%) and fha?Please help! I don't want to get discouraged when i am just now getting started.

Honestly the second a real estate agent tells me that I can't do something, it's time for me to find another agent.  Not only is it possible, it's the best way to start out.  I had an agent one time tell me that I shouldn't even tour a house because I'd never get it financed.  It turned out that she didn't want to meet me at 0700 to tour the property, so I fired her, toured the house the next morning at 0700 with an agent that didn't mind getting out of bed, and had the contract out by noon.  Go find yourself a new agent and kill it. I hope that helps.

Regards,

- JM 

The thing with an FHA loan is the property has to be in pretty good condition. It's okay if it looks outdated but, in a nutshell, everything needs to be functioning. Insisting on a property that will pass an FHA inspection will really narrow down your choices. Add on that you want a duplex...many of which will be non-owner occupied and there will often be deferred maintenance that won't pass FHA...and your choices are even slimmer. But is it impossible? It wouldn't be in my area. Just less selection and I'd be at the higher end of price points.

Most conventional, owner-occupied home loans only require a 5% down payment.  If you can swing that, I'd recommend considering it.  You'll have a lot more options to choose from and possibly better deals.  If not, then keep saving and keep your eye out for the right property to come along.  

@Vanessa Carvajal I agree with everyone above. It will most likely be difficult, but not impossible. Find an agent that works well with you. That can be a tremendous asset which goes both ways. I’ve now had 4 transactions with my agent, so he has made good money off me. However, he also knows exactly what I’m looking for and will often run interesting scenarios by me that are just as unique as I am. That relationship can be huge.

Find a new agent. Search for duplexes that we’re sold in your area and see who the listing and buying agent were. See if a name keeps popping up and contact them. Same thing for lenders, call around, and then get pre approval. It’s definitely possible, might take a few offers but it’ll be worth it.


@JM Payne I am definitely going to follow your advice. I do feel like my agent feels like finding duplexes are a little harder than single family homes and really don't want to do the job. I almost end up changing my plan and almost got into a single family home, but last minute someone ended up offering higher than me. My agent almost steered me away from my original plan. I won't allow that to happen again. Thank you!

@Jennifer T.

Hi, I guess i failed to mentioned in the discussion that, that's exactly what I'm looking for. I'm looking to buy a duplex ax an occupied owner, thus the reason why I am looking for a good place, not a fixer upper because I intend to live there. I understand all the requirements for such loans, but I am just not happy at the way my agent is going about it, to the point that I almost end up buying a single family home, all because of her discouragement. 


Thank you! I actually started looking for a new agent because I don't feel she is good for what I'm looking for and the goals i have set. I almost ended up getting away from my goals because of her and that's not what i need. I need someone that is willing to put in the work. I appreciate your encouragement!

@Corey Hawkinson

Hi, 

Thank you! As long as i know that there is a way, even though it might be hard, but at least I know it's not impossible, I can deal with it. I am not afraid to put in the hard work and get what I'm looking for, I just need an agent that is willing to put in the hard work with me. 

Thank you!!

Your profile does not mention where you are located, so people are giving you advice based on their market as opposed to the market you are in. 

If you were in Boston for instance, duplexes are plentiful, and in some parts FHA would be ok....while in other neighborhoods there you couldn't get FHA accepted

In DC, you would be very hard pressed to find a duplex, and if you did it would be extremely hard to use FHA financing on it.

So the question here is between you and your agent, one person is wrong and one is right. Your agent might be wrong, or they might be right and are informing of the reality of your market. 

@Vanessa Carvajal

1 more thought. You might want to find an agent that specializes in multi family. Here in Minnesota we have an agent with the business “Duplex Chick” who basically just does duplexes. She’s very connected in that market and has a great understanding of what makes a duplex work. She isn’t the only one that does multi family, but that’s one example.

Not sure what market you’re in but you may want to try that.

@Vanessa Carvajal

You can get a duplex with FHA and only 3.5% down. If all the duplexes in the area that you are looking need more work and won't pass an FHA inspection, you can always go the route of an FHA 203k loan to make renovations on the property.

For a duplex, conventional is going to require you to put down 15%. The 5% down is for single family properties. 

I would first get pre-approved for financing prior to looking at properties, so you know what price points that you can start looking at. 

@Vanessa Carvajal it's absolutely possible. I've sold over 20 duplexes in the last 12 months with FHA loans, bought my first duplex with an FHA loan and has two buyers in the past month that bought with down payment assistance FHA loans for $1000 down.

@Vanessa Carvajal I agree you can use an FHA loan have you looked into tge 5% down conventional loan? If you're interested in a loan officer referral please PM me and I'll hook you up.

This might be more personal preference, but I actually don't use my agent to find properties for me at all.  Every once in awhile she'll send me a listing she thinks I'd find interesting, when she knows I'm on the hunt.  But there are so many factors I consider, it's just a lot easier for me to look at online listings myself.  It's also a great way to get a feel for the real estate market you live in.  If there are some that peek my interest, I'll drive past them to see the exterior of the house and the neighborhood.  If I'm still interested, I'll contact my agent to schedule a showing.

There are so many "filter" functions available, including "multi-family", it doesn't take long to whittle down an online listing site to find the best properties for your goals.

I got started in REI with a house hack. Best financial move I have ever made! It's also an example that non-FHA isn't always a major fixer-upper. That house would never have passed an FHA inspection because the electrical wiring for one of the units had been stolen for the copper. I went with conventional financing. Paid an electrician $1800 to fix it right after closing. That work only took a few days and I moved in, within the month. I did choose to upgrade the flooring on both sides and there were a number of minor fixes that we took care of after moving in. But, except for that quickly resolved electrical issue, both units of the house were lovely and habitable on the day I bought it.

@Russell Brazil Hi Russell, I am in Florida. I've seen people invest in this market. I am not saying is easy, but i know it's not impossible. I just think I need someone that is willing to do the work. I was just told by this same agent she won't be able to help me, even when I said i think I found a single family home that will work with what i am tying to accomplish. She said she feels she is not a good fit for me. Call me crazy, but if she was as much as a hustler as I am, she wouldn't have said no. I just don't think she is willing to do what it takes and what I need. She is sold single family homes to people that have no interest in real estate investment, but are just looking for a home. That's my take on it. It's ok, I just need to either find someone that's hungry as much as I am and understands what my goals are. If she/he understands that this is just the beginning of a great opportunity for them to make money now and even more so later, when I am buying multi family homes and hopefully some day even apartments that will be worth much more. 

@Jennifer T. Hi! That is a good idea. I will be a little hard for me to do that at the moment. I travel for work and it's hard for me to go home that often just to go and drive to see the property, that is the main reason i need a good agent, she/he will practically be my eyes to let me know if it's even worth for me to flight home and take a look at the property, Don't get me wrong, I will be more than happy to fly and do whatever I need to do, but it has to be something that I know will work for for my goals. That is the reason why I need someone who is a hustler, someone that can see the benefit of working with me in the long run. But once i get some properties and don;t need to work as hard, I will be definitely taking your advice. sounds like less headaches that way. Thank you!