Hey everyone! Looking for advice from those who have done something similar.

New to Real Estate · Member since 2026 · 8 posts · 1 vote

We purchased our first home in 2020 and are now planning to keep it as a rental while purchasing a duplex to owner-occupy and house hack for at least a year.

I’m trying to figure out the best order of operations. How did you handle the transition, navigate city rental requirements, and avoid carrying two mortgages for too long?

What would you recommend doing first, and is there anything you wish you knew before getting started?

Excited to finally make this happen! TIA! 😊

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Brian AsaroPro Member

Real Estate Agent · San Diego, CA · Member since 2022 · 23 posts · 16 votes

21h

We will be in the same situation in a couple of years and have the same question. It seems to me you'll have to pull out money from your current property. The amount will be based off what the rent is in your area. Then, you'll have to find out how much you'll be approved for on the next property using the potential rent from the new property as additional income. The problem is the time between the refi and finding the next property, then getting a tenant in the unit you just left. I'll be watching this post for ideas

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Devin PetersonBusiness Member
Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 689 votes
21h
Amber, a few things on the financing side that usually decide how this plays out:
Carrying two mortgages for a while is hard to avoid unless you sell or refi the 2020 house, so the real question is whether you qualify with both. Most lenders will let you use rent from the home you're moving out of, but they want a signed lease and proof of the deposit or first month's rent, and conventional loans generally only credit about 75% of that rent against the payment. FHA is stricter: unless you have roughly 25% equity in the home you're leaving (supported by an appraisal) or you're relocating a long distance, the full old payment is often counted against you with no rent offset.
Also check what loan you have on the 2020 house now. If it's FHA, you generally can't hold two FHA loans at once outside a few exceptions, so the duplex may need to be conventional (many conventional programs now allow as little as 5% down on an owner-occupied 2-unit) or the current house would need to be refinanced out of FHA first.
On the duplex itself, lenders can usually count about 75% of the market rent from the other unit toward qualifying, which helps a lot. You'll be signing that you intend to move in within about 60 days and live there at least a year.
Sequencing that tends to work: get the current house rent-ready with a tenant and signed lease before you close on the duplex, and get pre-approved by a lender who looks at both properties together up front so there are no surprises on DTI or reserves (expect them to want a few months of payments in reserves for the rental too).
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- Amber WarrenPro Member
  OP
  New to Real Estate · Member since 2026 · 8 posts · 1 vote
  5h
  Thank you for the information! I have spoken with a lender and the financing side is good to go. Equity is over 25% so we should be good there. Looking into doing another conventional on the duplex with the 5% down. Idk how the equity position works when I leave the duplex after the year of living in one of the units and moving to another (not sure if the 25% rule will apply there or not)
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Brian AsaroPro Member
Real Estate Agent · San Diego, CA · Member since 2022 · 23 posts · 16 votes
21h
We will be in the same situation in a couple of years and have the same question. It seems to me you'll have to pull out money from your current property. The amount will be based off what the rent is in your area. Then, you'll have to find out how much you'll be approved for on the next property using the potential rent from the new property as additional income. The problem is the time between the refi and finding the next property, then getting a tenant in the unit you just left. I'll be watching this post for ideas
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- Marc MoraPro Member
  Investor · Fort Lauderdale, FL · Member since 2026 · 227 posts · 37 votes
  6h
  @Brian Asaro, with two years to plan, I'd save the duplex down payment instead of pulling it out of the first house. A cash-out refi at current rates can turn a good rental into a thin one, and it takes the refi out of the timing problem you mentioned. I'm open to comparing plans as you get closer if that's useful. Do you know what your place would rent for? Where do you want your strategy to go after the duplex?
  1 Reply
Ryan BakerBusiness Member
Lender · Strongsville / Cleveland, OH · Member since 2026 · 158 posts · 39 votes
20h
Before making an offer, get a lender to underwrite both homes together using your current payment, a realistic lease for the first home, and projected rent from the duplex; rental income may not fully offset each mortgage for qualifying. If you are considering FHA for the duplex, confirm whether the first loan and your move satisfy its occupancy rules, and compare an owner-occupied conventional option too. I would also set aside reserves for a vacancy or delayed lease-up so you are not depending on immediate rental income. Happy to walk through the numbers with you, give me a call (my number is in my signature below).
– Ryan
[email protected]330-548-3340
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- Amber WarrenPro Member
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  New to Real Estate · Member since 2026 · 8 posts · 1 vote
  5h
  Thank you Ryan! Appreciate the information. I have spoken to a lender and everything looks good on the financing side. Just trying to figure out the steps of getting current primary home rented while purchasing a duplex and getting one side ready to rent while living in the other.
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Divin KanyamaBusiness Member
Accountant · Seattle, WA · Member since 2025 · 700 posts · 295 votes
19h
Congrats, @Amber Warren exciting move! Here's what I'd do.
Get the duplex loan first. Get pre-approved while your current home is still your primary residence, so your income and debts look clean. Ask your lender how they'll count rent from your current home. Many want a signed lease and only count part of the rent, so line up a tenant before closing. Owner-occupant loans usually require living there about a year, which fits your plan.
Check city rules early. Look up rental registration, licensing or inspection requirements before listing. Some cities won't let you collect rent without them. Also switch to a landlord insurance policy on the old house.
Avoid double mortgages. Pick your move-out date, get the house rent-ready ahead of time, and aim to have a tenant move in right as you leave. Keep a few months of reserves for both properties.
Taxes: Once it's a rental, you report the rent but can deduct interest, property taxes, insurance, repairs and depreciation. Depreciation starts at conversion, so note the home's value on the day it becomes a rental. In the duplex, you can generally deduct only the rented unit's share, so track expenses separately from day one. If you sell the old house later, you may still qualify for the home sale exclusion if you lived there 2 of the last 5 years, but depreciation is typically taxed. Talk to a CPA before you decide to hold or sell.
What I wish I knew: budget more for repairs than you think, and screen tenants carefully. Good luck!
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- Amber WarrenPro Member
  OP
  New to Real Estate · Member since 2026 · 8 posts · 1 vote
  6h
  Thank you this helps out a lot! I’m calling the city today to see the requirements!
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Levi Rawlings
Real Estate Agent · Portland, ME · Member since 2021 · 21 posts · 9 votes
9h
Amber, the replies have the financing and city registration side covered well, so I'll add two things on the property side.
First, check the duplex's leases before you write the offer. If both units are occupied, find out which one you'd move into and when that lease ends. The move-in timeline Devin mentioned depends on that unit being available, and some duplexes sell with tenants whose leases run well past it. Ask for the leases, the rent roll, and the deposit records, and confirm what transfers to you at closing.
Second, walk your 2020 house as a landlord before you advertise it. After living somewhere for a few years, it's easy to stop noticing the slow drain, the sticky window, or the aging water heater. Fixing those before the first tenant moves in is usually cheaper and calmer than handling them as repair calls while you're settling into the duplex.
Which city are you in? Rental registration rules vary a lot, so that would help people point you to specifics.
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- Amber WarrenPro Member
  OP
  New to Real Estate · Member since 2026 · 8 posts · 1 vote
  6h
  Thank you! I’ve been doing little upgrades since we’ve moved in, so that helps :) New Baltimore MI. I was on the city site last night and I seen an application. I’ll call them today to see what the requirements are.
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Harrison C.
Member since 2017 · 90 posts · 45 votes
7h
Amber, your post is tagged Detroit, so two Michigan and Detroit things worth having on your list before the 2020 house gets a tenant:
Detroit rentals have to be registered with the city and pass an inspection (plus a lead clearance on pre-1978 homes) to get a certificate of compliance. Tenants in a house without one can pay their rent into escrow instead of to you, so it is worth starting that process before you list, not after someone moves in. Inspection dates can take a while to get, which feeds straight into the two-mortgage overlap everyone is talking about. If the duplex is in the city too, check with the city whether the unit you rent out needs the same, even with you living next door. If either house is in a suburb, each one runs its own program, so look up that city specifically.
On the Michigan side, the security deposit law has a few steps people miss the first time: a deposit can be no more than one and a half months of rent, you give the tenant a written notice with your name and address for receipt of mail within 14 days of them moving in, and you hand them two blank move-in inventory checklists. The deposit has to sit in a regulated bank account unless you post a bond, and it goes back (or an itemized list of what you kept) within 30 days of move-out. Doing those right on tenant number one means you never argue a deposit later.
Not a lawyer, so confirm the current details with the city and the state, but those are the ones that bite new landlords there.
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- Amber WarrenPro Member
  OP
  New to Real Estate · Member since 2026 · 8 posts · 1 vote
  5h
  Thank you!! This is very helpful.
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Marc MoraPro Member
Investor · Fort Lauderdale, FL · Member since 2026 · 227 posts · 37 votes
6h
@Amber Warren, a few months of two mortgages is normal with this move, and it stays manageable as long as the first house doesn't sit empty. I'd have the city's rental paperwork done and a tenant ready before the duplex closes. Is the rate on the 2020 house low enough to keep it either way? What strategy comes after your year in the duplex? If you'd ever like to talk strategy, I'd be open to it
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- Amber WarrenPro Member
  OP
  New to Real Estate · Member since 2026 · 8 posts · 1 vote
  6h
  Thank you Marc! I'd appreciate that. Rate is low on the 2020 home! Im going to call the city of my current home today to see what steps are needed to switch it to a rental. I know there is an application and an inspection required. Then I'm going to see what the property taxes will look like once I lose my primary exemption and see what landlord insurance looks like that way I can make sure I'm cashflowing positive with the average rents. From there not sure what to do. As in how to market this place while I'm shopping for the duplex. What if I find a duplex and haven't gotten a tenant here or someone wants to move in here and I haven't found a duplex yet. Lots of unknown stressors haha. After the year in the duplex our idea is to Find another duplex and do it again to build portfolio. If we are in a good financial position we may consider finding a SFR moving in that while also finding another rental rather it be a rental SFR or another duplex. Also, thinking of opening an llc and getting a lease agreement in place. I guess I just done know the order of operations with all of this lol
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Amber Stout
Lender · Tampa/Saint Petersburg, FL · Member since 2014 · 372 posts · 148 votes
5h
Hey Amber! I'm a real estate investor myself and a mortgage broker, so I definitely understand both sides of this.
Sounds like you've already got a good handle on the financing and rental requirements.
As far as timing, I'd start getting your current home rent ready and figuring out your ideal move out date. You can start marketing it with a future availability date once you have a better idea of your timeline. I'd also make sure you have enough reserves to comfortably carry both properties if there's a gap.
Keep in mind, once you close on the new property, you skip a month for the mortgage payment. For example, if you close Dec 1, your first payment will not be due until Feb 1 which gives you plenty of time to make the transition.

One other thing I'd consider is your long term financing strategy, especially if you're planning to repeat this every year. How you structure each purchase can make a difference as you continue growing your portfolio.
Happy to bounce around ideas anytime! I love this strategy and helping others build their portfolios.
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