Should I purchase a non cash flowing duplex?

[Antuan C.]

Hello,

I have been thinking on buying a duplex in putting 5% down, it will be cash flowing -$300-$400/month (negative)

Right now prices are thru the roof and I found a nice duplex for significantly lower than the rest of the market and even so it doesn’t cashflow with the amount of downpayment im giving.

I have been thinking on using the cashflow from the other one to cover it while I wait for interests to come down and refinance.

Even if I didn’t have the other duplex, I could cover the cost out of pocket.

For context, all the other duplexes in the area are going for at least $100k more.

I appreciate your input.

[Theresa Harris]

Most people who have rentals put 20% down, so you are right that the lack of cash flow is partly down to putting 5% down.  Also if you are going to live in one unit, I'm assuming you ran the numbers pretending both sides were rented.

I'd find out why it is priced $100K less-is it priced to get multiple offers?  also how quickly do rents go up in your area?  If it is worth $100K more than what it is listed for and you can get it for that price, I'd go for it as you will recoup that when you sell it and 5 years down the road, rents should be higher.

With interest rates at what is more of a normal level, and house prices up; finding cash flowing properties is not as easy, and especially so in more expensive areas.