Make sure the policy type matches the use.For both properties, confirm they’re written as true landlord / dwelling policies, not converted homeowner policies.

Portfolio Loan / Local BankGreat if you plan on eventually rolling multiple assets into one relationship.Pros: potentially better pricing.Cons: more documentation, recourse, and often lower LTV on single-asset cash-out.How much equity should you keep?

The goal isn’t just to make the deal work today, but to build assets that will serve you later.If you can stack small “base hit” deals like this every 1–3 years, you’ll eventually look up 12–15 years from now and have 10 properties—and two things will almost certainly have happened:The properties you bought early on will likely have seen significant appreciation.You’ll wonder how the time passed so quickly.As the portfolio grows and equity builds, you start creating optionality—the ability to refinance, sell selectively, reduce work, or pivot based on life circumstances.

@Cody Miracle Your decision between house hacking in San Diego or investing out of state really comes down to how you want your income, deductions, and eventual exit to play out.

We hope you find the money you need and eventually close on your transaction. 

I’ve owned and underwritten a few deals like this, and the short answer is: what matters isn’t how you think of it, it’s how the city, lender, and insurer classify it.A detached garage converted into a store pushes this firmly into true mixed-use, not residential with an accessory structure, unless it’s fully permitted and zoned that way.A few things to verify before you get excited about the numbers:• Zoning and permits – Is the commercial use legal, non-conforming, or outright illegal?

So you WILL cashflow eventually but go into the property expecting not to cashflow now.

But, if you decide to convert the property to a rental and see how it performs, you would have the option to later do a 1031 exchange.

One of my duplexes in South Shore cash flows and I'm converting the basement to a 3rd unit as a 1 bed/1 bath. 

If you eventually buy non-owner-occupied properties, then LLC financing becomes easy.Once you move beyond house hacking and into pure investment deals, lenders like:DSCR lendersHard money lendersCommercial portfolio lenders…will happily lend directly to your LLC — no business credit history needed.They underwrite your personal credit, not the age of the LLC.So what’s the best direction for your first duplex?