Owner Occupied Duplex Deal

3 Replies

Looking at a duplex 3 BR 2B on one side 2BR 2B on other with full basements FSBO listed for $155,000 (which is above market) built 1980 in great shape in a good neighborhood with 1 car separated garages. Tenants pay utilities, rented month to month for $625 (2 BR) and $725 (3 BR) and 3BR is planning on moving out (perfect for us to occupy). Seller says hasn't raised rent in years and tenants pay late sometimes (he describes himself as atypical landlord). Market rent $650-800 for 2BR and $750-900 for 3BR. Seller paid $125,000 in 2003 and I am thinking of offering $130,000 to start. It's a rare property in my area, I can get 5% down conv. financing, and would allow us to save around $1200 per month on our personal housing expenses to throw into more buy and hold properties. Any input greatly appreciated.

As someone who got into buy and hold properties with an owner occupied duplex I would say as long as it makes sense for you go for it. Based on current rents and your expected offering price it doesn't fit the 2% rule so for that reason I would not do it. It doesn't even hit the 2% rule on the maximum market rents. 

Well, let's say you moved out and needed an exit strategy... less people will buy a duplex, but you'd still have a decent number of buyers who could get financed for it. Numbers wise, a bit close to not making the 1% rule with the monthly rent equaling 1% of the purchase price. You said you'd start at 130k. I went with the low ends of rent and it was $1400. If you plan to live there a long time, the rent from the other side could help offset your mortgage, so if you like the house alot, go for it. However, if you are looking for cashflow.... keep looking.

Originally posted by @Thomas Fosnaugh:

Looking at a duplex 3 BR 2B on one side 2BR 2B on other with full basements FSBO listed for $155,000 (which is above market) built 1980 in great shape in a good neighborhood with 1 car separated garages. Tenants pay utilities, rented month to month for $625 (2 BR) and $725 (3 BR) and 3BR is planning on moving out (perfect for us to occupy). Seller says hasn't raised rent in years and tenants pay late sometimes (he describes himself as atypical landlord). Market rent $650-800 for 2BR and $750-900 for 3BR. Seller paid $125,000 in 2003 and I am thinking of offering $130,000 to start. It's a rare property in my area, I can get 5% down conv. financing, and would allow us to save around $1200 per month on our personal housing expenses to throw into more buy and hold properties. Any input greatly appreciated.

 Hi Thomas,

Not knowing the the location of your target duplex I still believe you could find better numbers on another property.

There are so many great deals out there. Just be patient and the right one will come along where all will fall into place.

The biggest mistake I made when starting was buying for quantity and not quality.

Thanks and have a great day.

Medium list n sell logo designEngelo Rumora, List'n Sell Realty | [email protected] | 419 740 6999 | https://agentscomefirst.com/ | Podcast Guest on Show #89