All Forum Posts by: Sam Stoffels

Hey Andrew, 

Congrats to your son on the engineering degree and on the desire to "house hack" its a great way to get started. 

I was in your son's shoes just nine months ago. I had just graduated with my Civil Engineering degree and I was looking to buy a duplex in the twin cities and use that as a springboard to get into REI. In concept, the owner occupant duplex idea is a fabulous way to get started in REI. As you already seem aware of there are two ways to house hack. Buy a duplex and rent out the other side or buy a home with multiple bedrooms and rent out the others. I would encourage the later. that is the route that I have taken being in the same situation. The problem with duplexes in the twin cities is they are just either way too expensive, run down, or in a REALLY bad neighbourhood (Trulia's crime map can help find these areas). Many are extremely expensive right now and many I looked at wouldn't even cash flow even if you rented both sides with +20% down. If you go the duplex route be sure to analyze it and make sure its worth it over just an SF. There are duplexes in the MSP area and many are livable but I did not see it as worth it to take on that debt load when I could just achieve the same thing by buying a house and renting rooms out. For that reason, I am closing on a house in an inner suburb this spring after looking at many duplexes since this fall.

Duplex or Single Family, the housing market in the twin cities is extremely hot. In most cases its a seller's market. Especially starter homes under 225K. Homes go quickly and often above asking. It's good your son is handy it seems homes that need some updates get less attention. 

In regards to financing, there are many routes you could go for a low downpayment. Minnesota has many first-time homebuyer programs and they include conventional financing on an owner occupied duplex or SF for 3.0% down. The PMI won't stay forever like FHA. They have down payment assistance too if that is needed.

PM me if you wanna know more about my lender or anything else. 

Best of luck,

Hello, Everyone! 

First of all, I would like to introduce myself to the forums. I am a recent 22-year-old college graduate with a structural engineering job in St. Paul. I am also almost ready to commence my homeownership and real estate journey investment!

My goals are to gradually build wealth and cash flow over time while having a normal engineering career. slow and steady wins the race I guess :)

I have been considering two common newbie strategies either owner occupying a duplex or to buy a simple single family property such as a townhouse for less but then plan to move within the next year or two and move on to the next property while renting the other. I understand that if I go duplex and owner occupy I will probably not find a unit that will pay all my expenses (mortgage, taxes, Insurance, contingencies etc) so I analyse them as if I am renting both sides which I would intend to do once I move on. My down payment situation would allow me to put 20 percent down on a small townhome or home for a future house rental but I would probably not be able to put quite 20 percent down for a habitable duplex in this market and maintain sufficient reserves. leading to my question for all you MSP investors out there. 

Given your knowledge of this market would you recommend one strategy over the other? I can't seem to find very many duplexes that are at a reasonable price and out of the bad parts of town, but I have found some now and then. I am open to Minneapolis, St.Paul and their respective inner suburbs. 

All discussion or advice is appreciated. Thanks :)