To buy a fourplex or to not?

Question

Good evening everyone!

I have been looking Into house hacking! However, finding a duplex Is hard! I have found a four plex and the cost scares me because I have never bought a house before let alone a four plex. I do believe It would rent but I don’t know if this would be the best first step for me? How do I make this decision?

Eliott Elias · Answer

You’re feeling uncertainty because you are swimming in uncharted territory. It is not as intimidating as you think, four-plexes are a lot safer than single-family when you have a vacancy. Make sure it cash flows.

Gregory Schwartz · Answer

Fourplex house hack for the win!!

My first clients were a young couple looking for their first house / house hack. They also preferred the relative comfort of a duplex. As luck would have it they purchased a fourplex that covered their housing expense and then some.

Im also very biased, my first house hack was a fourplex.

Brad Jacobson · Answer

If you have the funds for the downpayment and at least five figures in savings left over to conquer any capital expenses that arise, DO IT!  House-hacking is ALWAYS better than not.

When you go under contract, hire a great home inspector and do a sewer line scope.  Negotiate a few concessions from the sellers and save that money.  4plexes are infamous for being higher maintenance but if your cost of living decreases by $1,000+/month, that money will serve you well to keep the property nice and increase your net worth.

Good luck!

Ray Hage · Answer

@Corey Duran Well don't be scared to move forward buttttt make sure you have some idea of what you're doing. Do you understand if it is a good deal or not? Have you calculated the mortgage, expected rents, cost of renovations, etc? You don't need to know every single detail but you do need to understand the big stuff. Since you're a contractor, I imagine you can do a lot of the work yourself or have guys for it so that helps a ton! Now you just need to do the math homework on the rest.

Brandon P. · Answer

Step out @Corey Duran and you will not regret it. Do your due diligence, which it looks like you are by being on here and asking questions...but don't be afraid to pull the trigger on something that comes your way.

Chris John · Answer

@Corey Duran

I'd be more concerned with getting a good deal over buying a specific type of property.  Besides the obvious of property location, affordability, condition, etc. I'd focus on:

(Monthly Income - Monthly Expenses) / Investment $

I know it's all pro forma and percents, but I like to have a general idea of how much return I can expect on each dollar I put into an investment.  Then, compare it to other options to select my best option.  For instance, I might calculate the money you are going to save on rent as part of the monthly income to help with the comparison.

Finally, I'd consider how you think the economy, interest rates, and real estate prices will change in the future.  For instance, I wouldn't buy an office property in San Francisco right now because I'm not sure that it would still be a good deal in a few years with what's going on there...

Good luck!

To buy a fourplex or to not?

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