Investing in a duplex
Good afternoon everyone I hope all is well.
My name is Jeremy and I am definitely new to real estate investing since I haven't made my first deal yet. I have a good job, so I will be able to save up money for a down payment on a duplex in about a year or so. My question today deals with my investing strategy and what others will think about it. My plan is simple, to contact my local real estate lawyer, accountant, contractors I know, and a real estate agent in my area. Then my target is to buy a duplex within the 150k to 200k area which would typically get you a rather large duplex for my area. I could probably get a mostly finished or completely finished home for around that price. I had planned on saving up between 50k and 75k for the down payment, and the work to be completed if the home needs it, and as a cushion to cover for unexpected costs. I would put down 20% on the home, which is the key part of the strategy that I am unsure about because I see many people like to put down as little as possible, but I don't want to put down 3.5 percent, only to have the housing market start to decline, because I do not understand this risk associated with only putting 3.5 percent down vs 20%. I would think putting 20% down is less risky, and also that I would not need to pay PMI which is an additional bonus. The strategy continued would be to house hack with my wife and have a tenant move into the other side of the duplex. I figure using mortgage calculators that the mortgage for the maximum price 200k house would be 1170ish with a 20% down payment, and I believe I could get at least 1000 per month in just rent with utilities separate for one half of the duplex. My current rent is 1150 and the way I see it is that the worst case scenario is that I have difficulty renting it out, in which case I would be paying 20 dollars more than my rent. The other scenarios I see have me renting it out for 800, which is absurdly low, and I would only be paying 350 dollars a month for housing not counting taxes etc. The best case scenario is I can charge the 1000 or more and only be paying a minimum amount for living expenses each month. My question is is this strategy decent for moving up in the world, or am I just crazy and obsessed with real estate?