I am interested in investing in a Duplex. Preferable 4 or more units. Before I jump into my first deal, and I am wondering what are several factors that I should keep in mind when shopping for units, as well as after my purchase. I have already listen to several podcast and received some great knowledge. But I'm still seeking more knowledge. I know this question is kinda of broad. But that is my sole purpose, just to open up the discussion for several doorways when it comes to receiving advice. I am very interested in having my tenant pretty much pay for almost all expenses, but I would like more assistance when it comes to building the foundation/lease contract to present to my tenants in the future.
Get in a 4 unit if you can. 3 tenants paying that mortgage and you live in the 4th unit.
Your breakeven occupancy will be better than a duplex or tri-plex and if one leaves 2 more will still be paying versus a duplex where you will have 50% vacancy and have to pay the mortgage all by yourself.
@Jeremy Sanders a few things to keep in mind when looking for a 4 plex.
Do you as the owner have to pay any utilities?
Is there a home owners association fee, and if so, how much does it cost and what does it cover?
Are there common areas on the property that require maintenance?
Is there potential for rent growth?
Is there potential for increased revenue for example through coin-op laundry?
If the unit is located in an area with a lot of multi-family, how do the rents compare?
Even though a 4 plex is considered residential for lending purposes, I try to go into it with the mindset that it is a business/commercial property.
Jeremy, You are smart to " ask around " before making a move.
As you can see there is a pretty consistent thought towards
staying in the " residential" 1-4 unit market and looking at 3-4
units not just 2 ( Duplex).
Cash flow is important ! Minimize utility Expenses: ( at least separate electric , Water if possible).Separate Heat etc. is desirable.
You want to "hit the ground running" so for your first -stick to minimal
"fix-ups". Only reasonable rents required to give a desirable return!
Look for property that will be attractive to re-sell when the time comes.
A good investment property should have both Rental Income and
Return-on Equity potentials. Keep in touch! Best for Success!
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