Buying a DUPLEX to start? - Posted by Ricky

Posted by Ronald * Starr(in No CA) on January 09, 2003 at 22:28:29:


Actually, you would probably have a positive cash flow if you rented out both units. The price compared to the rents sounds pretty good to me. However, that range of possible rents sounds too large to me. I think you need to study rents in the area seriously and see if you can get a realistic figure nailed down.

Then the price to rents ratio varies in different locales. So you need to study what similar properties have sold for and what they rent(ed) for.

You may not be ready to buy yet. At least not if you want to be sure that you are getting a good eeal. You probably need to study the local market more so that you are an “expert” in the rental rates and the fair market values of the properties. This might be a very good deal for your area or it could be a poor deal, way overpriced. Lookinag in here as an outsider, I can not tell you that, and I don’t think anybody else can–at least with a straight face. If you could look at about 50-70 other duplexes offered for sale over the next few months you might get a very precise idea of the market values of similiar properties and so buy with confidence.

Old house? Hmmmm. Some older properties are very soldily constructed, probably better than newer properties. Some may be very difficult and expensive to keep repaired. There are usually more repairs for older properties. That is seems to be well maintained is nice. However, sophisticated sellers can and sometimes do make properties cosmetically appealing, even though there are problems with the property which they do not disclose. Not everybody is honest. If you move ahead with this purchase, get a good inspection by a whole-house inspector or a knowledgeable contractor. Do not go on your own impressions, please. Houses actually are more complex than they seem, even though you have been living in them for many years. Small matters can cause big problems–such as water not diverted away from a foundation area. That age house may need some new water pipes, if they have not been replaced. Are you sure there is no old cesspool in the back yard which is thinly covered with dirt and and old rotten wooden cover? You need to check county records for things like that, or have your inspector do so.

I think it is outstanding that you are going to be buying a property for yourself at this age. I bought my first home when I was 23, a four-bedroom that I livedin and rented out the other bedrooms to help me pay the mortgage and other bills. Worked fine for me. I hope your first purchase works out well for you.

Good InvestingRon Starr**

Buying a DUPLEX to start? - Posted by Ricky

Posted by Ricky on January 09, 2003 at 10:47:29:

I am 22 years old, college graduate that has been working for a year and half. I am looking to buy a house and have wanted to buy investment property. I have found a house that cost $79,900. It is a duplex with a 2 bedroom on one side and a 3 bedroom on the other. The house has a new washer, stove, carpet, and vinyl. The home has central gas heat and air. I am not opposed to a small negative cash flow, because I would be living in one half. The other half I have been told will rent for $500-$600 (I have asked to see lease contracts). Is $80K too much?

Second the house was built in 1910. What extra questions should I ask and should I be worried about the age if up keep has been good?

Re: Buying a DUPLEX to start? - Posted by Robert

Posted by Robert on September 11, 2003 at 20:07:15:

I’am looking into buying a Duplex to start out with

Re: Buying a DUPLEX to start? - Posted by JEscobar

Posted by JEscobar on January 11, 2003 at 23:04:04:


This is the rule of thumb for finance of property: min. 2 yrs of employment in the same line of work, and 3 months bank statements with funds for the down payment and showing 3 months of mortgage payment, 2 yrs taxes and current paystubs needed for a mortgage broker. Now, that is called a full doc loan, and you can get into this property with 100% finance - NO MONEY DOWN, if you qualify for the loan. The rates can be from 6.5% to 7.5% ,. if you have good credit. The edge on this is that you can use 75% of the rental income for qualifcation purposes for this loan-=- this helps if you need the extar income qualifcation for the lender.

If you make the grade, you can get into many diffent 1st time buyer loans with 100% financing even on a 2 unit complex, and use the income to qualify.

As for the building, yes — the olded building will have more repairs than a new property unless it is in cherry condition. Your agent will do a termite inspection, a roof inspection and you can order a home inspection to see the overall condition of the property prior to closing the deal.

What state and city are you located in for this buy? Ask your agent how she/he will investigate -inspect the property for you – keep in mind, each report has a cost attached to it.
Good luck.