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23
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4
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Jaekwan Lee
Pro Member
4
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23
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Duplex that does not cashflows still good for first home?

Jaekwan Lee
Pro Member
Posted

Hi,

As a first time home buyer, I want to learn and experience real estate so I would like to buy a duplex to gain experience as a landlord and get familiar with the processes. I found that most of recommendations to buy a duplex emphasis on positive cashflow or match with simple 1% rule to start with. However, the place I am looking for to stay with my family is north Austin suburb and none of the duplex has a cashflow even if I put 20% down. For example, there are 500k-600k 2000sqt+ duplex that has monthly cost around $4000 ~ 4500 without management but the typical rent in that area for those units is under $2000. So it does not cover even $4000. 

In this type of scenario, is it still worth buying the duplex with one unit owner occupied? Or it is just a bad decision to start investment this way. Let's assume this location has more than average appreciation but not very promising of big jump.

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