How to Buy Your First Investment Duplex in the Next 90 days

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In my article “The Smartest, Most Easily Achievable Way to Get Into Multifamily Investing,” I make the argument that duplexes might be the perfect 90-day goal to get you started with apartment building investing and keep you on track to your goal of financial freedom. If you read that article, you’re probably wondering, “How do I go about buying my first duplex?” So here is your checklist to buy your first duplex in the next 90 days.

The 90-Day Checklist to Buy Your First Duplex

Here’s what you’re going to do in the first four weeks:

Week 1: Educate yourself.

During this week, you’re going to complete a course or seminar or read all that you can about single family house (SFH) and apartment building investing. While investing in duplexes is less complex than larger multifamily (MF), you should still know about finding and analyzing duplexes, raising money, and property management.

Week 2: Determine your investing area.

Decide where you’re going to look. Because good duplexes are more readily available, there’s a good chance you can invest closer to home.
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Related: An FHA-Financed Duplex is an Ideal First Investment Property: Here’s Why

Week 3: Analyze 5 deals.

Here are the steps I recommend to analyze and track your duplexes:

  1. Go to realtor.com or loopnet and get the listings of 5 duplexes. Make sure you get the number of bedrooms, square footage, and the rent they’re currently getting from the listing broker. If they can supply you with expenses, that’s even better but not required.
  2. Create a spreadsheet where you can track your deals side by side. Include the asking price, your offer price, number of units, square footage, and rental income.
  3. For each duplex, create a simple profit and loss summary. Use the rental income supplied by the listing or real estate agent and assume you’ll have 10% vacancy per year. For expenses, you can use the realtor.com figures (towards the bottom of the listing) to calculate your real estate taxes, insurance, and mortgage payment. I suggest purchasing a home warranty plan ($450 per year) that has a $100 deductible. Then budget $100 per month for repairs (the larger items should be taken care of by the home warranty).

Then answer these questions for each deal to determine if the deal is good:

  • Are the current rents at market or is there a chance to raise them? Find out by going to rentometer.com, which will give you the median rent for similar properties in that area.
  • What’s the current or after repair value (ARV)? What is the value of comparable properties? Are you getting a deal or overpaying? If you’re renovating the property, what is the ARV?
  • What is the cash on cash return? Compare the cash flow of one duplex to the cash flow of another. Does it meet your minimum return? Focus on the deals with the highest cash on cash return (but at least 10%).

Week 4: Create your “Sample Deal Package” and start raising money.

If you’ve followed me for any length of time, you know that I strongly suggest that you learn how to raise money to fund your deals.

In this step, you create your “Sample Deal Package,” which looks and feels like the same document you give investors when you have a deal under contract EXCEPT that you don’t actually have it under contract.

Related: How to Buy a Duplex: The Ultimate Step by Step Guide

So in the first four weeks, you laid the groundwork for what’s next: You educated yourself, finalized your investing geography, created your deal analysis and tracking sheet, and crafted your Sample Deal Package.

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For the next 60 days, you’re going to focus on two activities:

Activity #1: Schedule One Investor Meeting Per Week

Using the Sample Deal Package you developed previously, reach out to your sphere of influence and schedule meetings with people who might be interested in investing in your first duplex deal.

I’ve written extensively here on the Bigger Pockets about raising money, so please see these articles for more details:

If you follow this step, you’ll have eight meetings, and at least one of those will agree to fund your first duplex.

If you have your own funds for the first deal, great! But I still want you to start the money raising process now so that you have the funds for the next deal.

Activity #2: Make 5 Offers Per Week

Continue adding deals to your offer tracking spreadsheet and make offers as you go along. If you make five offers per week (not hard to do), that’s 40 offers in 60 days and your goal is to get just ONE accepted (also a reasonable goal).

That’s it! Your 90-day plan to buying your first duplex.

DISCLAIMER: I realize that duplexes are not technically multifamily, but so what? It’s a step in the right direction. I have also simplified the process somewhat, so don’t flame me for skipping some of the details — I can only cover so much in one article. My main goal was to OPEN YOUR EYES and SHIFT YOUR MIND to the possibilities. I also want you to get started with apartment building investing, and this is a great way to do it.

So if you thought that you needed tons of cash, experience, or time to get into apartment building investing, then I got news for you: YOU DON’T! Instead of giving up on that first 20+ unit deal, do a duplex deal. Once you have that under your belt, either do another one or shoot for something a little bigger.

Either way, you’re in the game and on the path to achieving your financial goals with real estate investing!

Any questions about this process?

Let me know how you’re progressing with a comment!

About Author

Michael Blank

Michael Blank’s passion is being an entrepreneur and helping others become (better) entrepreneurs. His focus is buying apartment buildings by raising money from private individuals. He’s been investing in residential and multifamily real estate since 2005. He is the creator of the Syndicated Deal Analyzer and the eBook "The Secret to Raising Money to Buy Your First Apartment Building".

6 Comments

  1. Scott Pigman

    FWIW, “duplex” doesn’t mean the same thing everywhere. In my experience, in New England, New York and Michigan it is understood to mean the same thing you mean – a single property with two living spaces. However around Baltimore the two units will be titled and sold separately. If you buy a duplex there you only get half of the structure. In Austin it’s similar. They’ll build two units that share a common wall and establish a condo regime for just those two units.

  2. Dan Albrecht

    I am not a realtor to be able to make 5 offers a week. Have you found realtors out there willing to work with investors who make 5 offers per week?
    When talking about shooting for 10% COC, what percent down is assumed?

    • Michael Blank

      Hi Dan .. yes, you can find realtors willing to make that many offers. However, with a bit of work, it’s not too difficult to do. You can create a template from an offer and just update the price and address to submit. You can also submit informal offers via email, or submit a letter of intent, and if you get a counter offer, submit a contract then.

      As I always say, “where there’s a will, there’s a way, and if there’s no will, there’s no way” -;)

      WRT cash on cash return, I’m assuming 20% down, but the COC applies regardless of how much you put down. Hope that helps !

  3. Had a question about the Cash on Cash return of at least 10%, do you mean at least 10% COC after PITI, HOA, and Property Management or do you meant 10% after everything just mentioned PLUS vacancy estimations, capital expense estimations, repair estimations, etc.?

    Thanks

  4. Ryan Breitkreutz

    Duplex’s in my area (Western Canada) run about $800k and rent for $1600 (maaaaybe!) per unit – so $3200 total.

    I’m just starting, never purchased anything before and am hoping to do something like the above but live in a unit myself. The problem is it seems the numbers I read everywhere here just don’t exist in Canada. Does that mean I should rent here and buy an investment to rent somewhere else? If anyone has any experience in these kind of markets I would LOVE some advice!

    Thanks 🙂

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