Too Early to Buy Duplex Out of College to Live and Rent? Advice?

2 Replies

Hello all,

This is my first post and I'm really learning a lot on this site and love it and have mustered up the courage to for some advice and thoughts.

So I graduated college with an engineering degree about 4.5 months ago and started my job 3.5 months ago in the related field and able to live with my parents. Yes, I have plenty of student loans and will start those payments in 2 months of about $350 a month.

I have about 13k to invest. I like the idea of living in a small multi-family (2-3) and living in one of the units while having the other units pay my rent. I think its a great way to slide into being a landlord.

There is a duplex I'm interested in that is $250k, around 2 navy bases, close to home, and can bring in about $900 each side. Financing would be through and FHA loan of 3.5% down.

My question is if it is too early for me to look at and if I need to save up more money before I take on something like this? If so, what would be a good strategy or how much should I save up for? Also, any advice or resources for me being a new investor I would love to hear. I'm in the Silverdale-Bremerton, WA area.

Thanks in advance!

Hi Jacob!! Welcome to BP.

Congrats on overcoming the fear to post. That may seem like a small first step but it is important to take some type of action. You can build on that. 

First of all the general idea of a small multi and using one unit as your primary is a great idea. Something I wish I had known about or thought of when I was your age. I don't know anything about your local market...I'm still trying to learn more about mine. But a 250K mortgage will have a monthly payment in the 1200 - 1400 dollar range. Rents are 18000/month that only leaves 4 - 6 hundred left over and we have not even discussed taxes, insurance, vacancy, or maintenance. I would look for a better deal. 

Think about what you have going for you. You are at the start of a good career and your young. You definitely want to get started and take action but you have time on your side. Take the time to find the right deal not just any deal. In the meantime you will have increased your savings and maybe paid down some of the student loan. These are positive things.

Continue to learn, listen to the podcasts, ask questions, and learn your market. If you are persistent and consistent you will find the deal that works for you.

Good luck and let us know how is goes!!!

Thanks Jeffery.

Taxes are $3000 a year. MIP would be around $100 a month. Mortgage payment for $250,000 @ 4.25% would be right about $1,200 a month. You are right that is about 15,500 a month in expenses and not counting vacancy or maintenance. Also maybe important is I would be sharing half of my side of the duplex with my roommate. I was hoping to do some updates to the kitchen and increase the rent.

The area is nice which is maybe why I was attracted to it as well in the first place. A nice area and close to the Navy base I was thinking would be attractive to future tenants.

I suspect you are right, the seller says the tenants have been in there for a while. It must not be that good of an investment if the seller is selling it.

Thank you for your advice. Much appreciated.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here