What are the top cities to buy a duplex?

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What are the top cities to buy a duplex?

Chris Dimoff
Member since 2021 · 2 posts · 5 votes

Hello!

I am quite new to the real estate world and find myself in a position where I can live and work (remotely) from anywhere in the USA. I am pre-approved to ~1.2 million but can realistically only put down ~100k. 


I am 29 years old and am trying to set myself up for the future by house hacking a duplex in a city that makes sense. I am fighting the urge to "buy my dreamhouse" and instead have someone else pay a good chunk of my mortgage. 



My work is located in California so I would prefer an area that is in PST or MST timezones. I am currently in Colorado, but houses here seem even higher than other areas I have considered.

  • Some cities I have considered:
    - boise
  • - spokane
  • - golden, colorado
  • - lakewood, colorado

What cities should I be considering? Also, what might you do if you were in my situation?

Thanks! 

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Ben ScottPro Member
Property Manager · Oklahoma City, OK · Member since 2019 · 578 posts · 351 votes
5y

@Chris Dimoff Hey Chris, I've represented and talked with several clients in large markets looking at cities like Oklahoma City, Tulsa, Wichita ... markets that are still relatively affordable and can cash flow. We've seen 10% appreciation in OKC the last 6 months - like most of the country - but this is still a market, like many others in the Midwest, where you can still achieve the 1% rule.

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  • Anna Laud
    Investor · Indianapolis, IN · Member since 2020 · 234 posts · 194 votes
    5y

    @Chris Dimoff

    Hi Chris! 

    It's best that you already have your preapproval and an idea of how much you can afford to put down- when you're looking at these various locations for a duplex, it could end up coming down to this $100K being a higher % of your total purchase price- which I'm assuming these locations have different purchase price points. 

    I think it probably makes sense to go this house hacking route at your age and being able to work from home for now, waiting for your 'dream home' in time. I would probably do the same thing in your situation. 

    If you've already considered the purchase price point differences, I'd start to look at property tax rates to compare as well as landlord vs. tenant friendly state legislation for each area you've mentioned or look into further. 

    Colorado- 

    While rent control can apply in certain cities, there are places in CO that have very low vacancy rates- elevating the overall rent you might be able to collect (obviously in a % monthly rental yield ratio objective to purchase price). 

    At least here I'm pretty sure that local law enforcement will be able to assist in evictions if needed and there's a sharp timeline of any notice you make as landlord being under a 72 hour max notice period - when it's up they leave or pay you; for nonpayment they have 48 hours to vacate. There might be more notices to tenants/city necessary permits that are mandated in CO, but that's probably not deal breaker worthy. 

    Idaho -

    is supposed to be fairly landlord friendly as well- there was a little talk in October about a plan to set up security deposits in a State Bank, in the tenants' names, but beyond that I think unless it's outlined in the lease you can raise rent as needed (# of times), pretty streamlined eviction process etc.

    Washington -

    I think Washington State is more landlord friendly as well- maybe bigger city exception like Seattle- I don't think Spokane though. Again, a more streamlined eviction process and I don't think rent control here either. 

    So are far as your cities and plan - both seem inline with what others in your situation might also do, maybe looking into El Paso ( I think MST part of TX) and Phoenix areas might be worth looking into as well for you- both landlord friendly states.

    The reason I went into so much detail however about landlord friendly- was just something to take into consideration as you narrow down your options and to keep  in mind as you move forward and compare purchase price points, taxes etc. 

    At least in how I read your question, it seems like this could in time be a fully rented investment property for you (should you cash out refinance a little bit down the road to move forward with dream home purchase), and I would want to personally be in a landlord friendly state and just add that to my list of 'all things considered' when evaluating markets. 

    Hope that helps some! 


    2Reply
  • Don SpaffordPro Member
    Investor · Idaho Falls, ID · Member since 2016 · 935 posts · 629 votes
    5y

    @Chris Dimoff Wherever you go, if you plan to house hack, it won't be a bad decision. Overall, choose a place you enjoy. Start with that and then find the property that will work for you. Some places you may pay a lot more, so also consider your budget. Boise is great, Idaho in general is great, the Idaho Falls general market is also great and more affordable than Boise, for now, prices are rising here as they are everywhere but you can definitely do more with the same amount of money. The problem for anything right now is also the competition. There is not a lot available and everyone is looking to buy. So you will need patience and be prepared to make the absolute best offer for the seller to accept yours over others. That often includes waiving all contingencies and being willing to pay the difference if you offer more than what it appraises for.

    2Reply
  • Cheryl Faber
    Rental Property Investor · Boise, ID · Member since 2020 · 17 posts · 7 votes
    5y

    Hi Chris! I'm closing on a duplex here in Boise today! $439k for two 920sf 2bed/1bath units built in 1977 but updated recently and very very well kept up. I have 5 SFH in Boise and it's very landlord friendly and an amazing place to live. I wanted a duplex as a way to keep investing without completing with the insane SFH market here now. I recently listed a 1320sqft SFH for $390 and it sold for $450 whereas this deal sat for a week at $450 and the owner dropped it to $440 so I knew I could get it without a battle or waiving inspection. Highly recommend! Feel free to message me if you have any other questions!

    1Reply
  • Aaron Williams
    Real Estate Agent · Boise, ID · Member since 2017 · 31 posts · 18 votes
    5y

    Save this link for all the active Boise multiplex listings. Updated every hour. 

    www.bit.ly/BoiseMulti

    I am born and raised in Boise and have been in real estate here for 21 years now. I invest, am a full-time Realtor, own and manage short term rentals and house hack. 

    Feel free to use me as a free no obligation resource for Boise real estate. I just helped a fellow BiggerPockets member close on his first cash flowing investment property a couple weeks ago here. There are still deals to be found.

    2Reply
  • Corey Frank
    Gillette, WY · Member since 2017 · 149 posts · 68 votes
    5y

    @Chris Dimoff I just took a look at Idaho a few days ago. It is quit amazing for the opportunity of growth. Very very low unemployment rate (something like 3.4 at the highest during the rough covid months) low property taxes, population growth and landlord friendly. It looks like the real estate market is on fire (like everywhere). Good luck! 😁

    1Reply
  • Chris Dimoff
    OP
    Member since 2021 · 2 posts · 5 votes
    5y

    Thanks for the incredibly helpful responses everyone! 

    @Corey Frank Where abouts in idaho did you look? 

    0Reply
  • Corey Frank
    Gillette, WY · Member since 2017 · 149 posts · 68 votes
    5y

    @Chris Dimoff I looked in Idaho falls, twin falls and boise. Boise was insanely high for prices. Idaho falls looked very promising. Higher prices as well BUT, HUGE potential for even more growth. If I am not mistaken, they have the largest nuclear research site in the country and some other, larger companies are looking to relocate into the area. 

    1Reply
  • Kent Lord
    Longmont Denver, Pueblo · Member since 2019 · 28 posts · 10 votes
    5y

    @Chris Dimoff

    I’m in Denver and know of quite a few decent deals in the Arvada Wheat Ridge and Lakewood areas. Let me know if your interested. Mostly 4-5 cap some 6%.

    0Reply
  • Matthew Osborne
    Real Estate Agent · Evergreen, CO · Member since 2018 · 12 posts · 4 votes
    5y

    Have you thought about Colorado Springs? I just closed on a duplex for a client there and was amazed at the deal we got him. It is still a very competitive market but has opportunities. COS has a strong rental market with a lot of government and military needing housing and a new amazon facility going in near the airport. This is the shortlist. 

    1Reply
  • Ashley Elder
    Member since 2020 · 1 post · 0 votes
    5y

    I'm in a near identical situation to yourself with age, remote career, and goals. I'm now closing on my first rental, a SFH in the Golden area, which I'll be househacking and turning part into a type of ADU so I'll be separate.

    I know you're asking about duplexes but I quickly learned SFH appreciate more, typically are on nicer streets, are easier to sell of need be, and there is opportunity easily to cash flow with a rent by the room strategy. This kind of thing was important to me because personally I love being in the area due to interests and lifestyle. So that's something to ask yourself.

    0Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    5y

    The RE market is efficient. The RE prices are based on numerous criteria including expected long term return and expected risk.

    Cheap markets are cheap because the risk is perceived high or the long term return (I.e. appreciation) is perceived to be low.  These markets often have outstanding initial cash flow that is often critical to RE investors when they are just starting their RE investing.

    Expensive markets are expensive because the risk is perceived low or the long term return (appreciation, both property and rent appreciation) is perceived high.  Note high rent appreciation markets will produce better cash flow than lower rent appreciation markets given enough time.  It is in the math.  Too many investors equate initial cash flow to actual cash flow when the correlation has historically been weak.  

    The best place for a new investor to invest in a duplex is their home market. This is a market typically well known. It is a market they can house hack (high LTV, eliminate rent, etc). It is a market where the investor can perform heroics if/when needed. It is a market where they can self manage to increase knowledge.

    I recommend all investors consider their home market before looking elsewhere. The grass is typically not greener greener elsewhere.

    3Reply
  • Stephen Brown
    Real Estate Broker · Huntsville, AL · Member since 2019 · 1k+ posts · 872 votes
    5y

    I think you've identified great markets. I'd also throw in some texan markets like Austin or San Antonio. If you ever want to come to the midwest, you could buy a duplex free and clear here for $100k, or house hack and pay $3.5k rent out a side for $600-$700 per month. We have a lot of fortune 500 companies in the area which will allow you to move back to stronger parts of the country with their rotational programs. 

    1Reply
  • Allen Wu
    Rental Property Investor · Member since 2021 · 335 posts · 193 votes
    5y

    @Chris Dimoff

    Try Cape Coral, FL and certain neighboring cities in San Antonio, TX

    0Reply
  • Grant SchroederPro Member
    Lender · OR ID AZ CA WA CO NV TN MT · Member since 2018 · 599 posts · 312 votes
    5y

    @Chris Dimoff definitely check out Boise, Idaho Falls, and Spokane!

    [email protected]541-231-1256
    1Reply
  • Allen Wu
    Rental Property Investor · Member since 2021 · 335 posts · 193 votes
    5y

    @Dan Heuschele

    Interesting take Dan! I’m from Southern California as well. What are your markets. I’m in Pasadena, CA, Cape Coral, FL, and San Antonio, TX. Any concerns for those markets based on your insights/observations? I’m more of a balanced investor where property has to at least break even, but area must have appreciation opportunities

    0Reply
  • Joel Miller
    Flipper/Rehabber · Member since 2019 · 39 posts · 14 votes
    5y

    Have fun buying in Boise! Unless you have cash or a large amount of money to cover the appraisal gap. It's been insane for me trying to put in offers. I just can't compete. I just bought a duplex lot to build on Friday because existing houses were too competitive on the MLS. Lots are hardly available either unfortunately.

    0Reply
  • Ben ScottPro Member
    Property Manager · Oklahoma City, OK · Member since 2019 · 578 posts · 351 votes
    5y

    @Chris Dimoff Hey Chris, I've represented and talked with several clients in large markets looking at cities like Oklahoma City, Tulsa, Wichita ... markets that are still relatively affordable and can cash flow. We've seen 10% appreciation in OKC the last 6 months - like most of the country - but this is still a market, like many others in the Midwest, where you can still achieve the 1% rule.

    3Reply
  • Lisa Waldman
    Member since 2020 · 28 posts · 9 votes
    5y

    I wouldn't touch Washington or Oregon with a 10 foot pole for rentals. Seattle amd Portland are passing crazy laws limiting many things for a LL. The other cities there are trying to follow the leader but are passing the laws slower. Especially if you are new to rentals be cautious there. The laws are complicated and on top of it not well written. I had a mf rental in Portland for 21 years and sold only because the barage of tenant laws. I truly didnt want to sell but the law changes were nuts. I bought a rental in Edmond OK recently. Nice area and the cash flow is good. The market has gotten crazy there so if you can find a plex there may be less competition 

    1Reply
  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    5y

    @Chris Dimoff

    Have you checked out Ohio for cash flowing 1%+ rule multi family?

    [email protected]614-363-2787
    Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
    WebsiteView Page
    2Reply
  • Jane A.
    Investor · Shawnee Mission, KS · Member since 2015 · 423 posts · 114 votes
    5y

    Check on this one https://www.trulia.com/p/ks/ov...

    1Reply
  • Adam Campbell
    Rental Property Investor · WA · Member since 2021 · 6 posts · 3 votes
    5y

    Hi Chris, welcome to the wonderful world of real estate where we get to solve problems like this everyday. That's what makes it fun.

    You are off to a great start getting pre approved to know what "amount" of property you can afford. I am also located in California and invest out of state because of the high sunshine tax California imposes.

    Just because you are pre-qualified for 1.2million doesn't mean you need to find a million dollar property. I just did some quick math and you'd have to charge ~$6,000 for the second unit on a million dollar property to break even on the mortgage. There are better cashflow deals out there!

    PRACTICE RUNNING THE NUMBERS: Run properties from different neighborhoods, cities, states through either BPs rental calculator or one of your own to get property details such as cap rate and cashflow. Through this exercise you will see what areas match your criteria of property and then compare that to your criteria of where you'd like to live. Maybe the numbers look good but you don't want to live there.

    Since you know the Colorado area, search for a duplex in the neighborhoods you know. Do these neighborhoods attract strong tenants? What are the average rents in the those areas? Do those neighborhoods have properties that are in need of work or well kept?

    Review the rent prices and neighborhood ratings of other cities you've visited.

    You should now have a small range for the purchase price and this will help you easily move through properties to know whether they work for you or not.

    House hacking is a great way to get started. Consider purchasing a more affordable duplex, live in it for a year to get your feet wet and see if you like real estate. After that, scale your real estate business as fast as you can.

    Cheers!

    2Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    5y
    Originally posted by @Allen Wu:

    @Dan Heuschele

    Interesting take Dan! I’m from Southern California as well. What are your markets. I’m in Pasadena, CA, Cape Coral, FL, and San Antonio, TX. Any concerns for those markets based on your insights/observations? I’m more of a balanced investor where property has to at least break even, but area must have appreciation opportunities

     All of our properties are in San Diego county.  Most are in one working class city in San Diego county that is in my profile if interested.  

    I do not know enough about Cape coral or San Antonio to have an educated opinion on those RE markets, but I like the river walk in San Antonio as a good revitalization effort and fun area to visit.  I suspect both markets could be good markets for smart investors, but being from So Cal I question why you would choose to invest elsewhere.  Neighborhood scout has almost every coastal Southern Cal city as a 10 out of 10 for appreciation this century (I believe there is one 9 out of 10).  Case Shiller has San Diego and LA in top 3 overall returns for buy n hold RE for this century and I have to believe OC cannot be far beneath San Diego. These are actual performance achieved as conveyed by two reliable sources (I would believe either of these sources over most other sources including RE related news articles).

    As indicated markets are efficient.  Perceived low risk, high appreciation markets are going to cost more than markets with perceived higher risk and/or lower appreciation.  You live in a market that has historically produced returns that exceed almost every other market and you are seeking to invest elsewhere. 

    As indicated previously, I believe virtually all markets can produce good RE return.  I believe there are many advantages of starting local and that most of the perceived advantages of other markets are mirages. 

    Good luck

    1Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Chris Dimoff:

    Hello!

    I am quite new to the real estate world and find myself in a position where I can live and work (remotely) from anywhere in the USA. I am pre-approved to ~1.2 million but can realistically only put down ~100k. 


    I am 29 years old and am trying to set myself up for the future by house hacking a duplex in a city that makes sense. I am fighting the urge to "buy my dreamhouse" and instead have someone else pay a good chunk of my mortgage. 



    My work is located in California so I would prefer an area that is in PST or MST timezones. I am currently in Colorado, but houses here seem even higher than other areas I have considered.

    • Some cities I have considered:
      - boise
    • - spokane
    • - golden, colorado
    • - lakewood, colorado

    What cities should I be considering? Also, what might you do if you were in my situation?

    Thanks! 

    Columbus, Cincinnati, and Cleveland are great cities to invest in.

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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    WebsiteView Page
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  • Corey Frank
    Gillette, WY · Member since 2017 · 149 posts · 68 votes
    5y
    Originally posted by @Joel Miller:

    Have fun buying in Boise! Unless you have cash or a large amount of money to cover the appraisal gap. It's been insane for me trying to put in offers. I just can't compete. I just bought a duplex lot to build on Friday because existing houses were too competitive on the MLS. Lots are hardly available either unfortunately.

     I bet! I looked into the Boise market a few weeks ago and it looks nuts! Been a great place to buy several years back 😂

    0Reply
  • Levi Shetler
    Investor · Twin Falls, ID · Member since 2020 · 1 post · 1 vote
    5y
    Originally posted by @Joel Miller:

    Have fun buying in Boise! Unless you have cash or a large amount of money to cover the appraisal gap. It's been insane for me trying to put in offers. I just can't compete. I just bought a duplex lot to build on Friday because existing houses were too competitive on the MLS. Lots are hardly available either unfortunately.

     Twin falls is the same way... Home prices have almost doubled in 2 years.  Nothing cash flows at these prices.  Appreciation is great right now if you already own property though,  but As a new investor,  I'm forced to look out of state. 

    1Reply
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