Is no cash flow first year ok? - Posted by AM

Posted by jeff on September 14, 2003 at 07:39:43:

I would have to say no. The cash flow on a duplex is the selling point. They go up in value slower than SFH. If both units are equal, size rooms etc. then you should pay a lot less than the tenet. I would say 75 to 25 worst case to cover the mortgage. If you rented both sides you would expect cash flow, why would the rents not create cash flow, (you pay the same as the tenet should be over the mortgage) because you live in one side. Now if you know something I dont that is going to cause the value of the property to go up in the next few years then that is another story. jeff

Is no cash flow first year ok? - Posted by AM

Posted by AM on September 10, 2003 at 13:12:38:

Is it still a good investment when buying duplex to break even for the first couple of years? Im thinking about purchasing a duplex I will owner occupy. (and hold for years and years) If I pay exactly the same amount as the rent I get from the tenant and that equals the Entire morgage payment (PITI) is it worth it? Any advice is greatly appreciated.


Re: Is no cash flow first year ok? - Posted by Randy

Posted by Randy on September 14, 2003 at 12:52:16:

If your saying you will live in the property ?Rent Free? i.e. your tenant pays rent equal to your mortgage payment and you have no repair costs for several years that may be one way to do it? For many it?s human nature to spend what you make (or most of it) so if you have no rent or house payment you may feel you can afford that ?New Big Screen TV?.

If you treat it as the ?Investment? it is, place the building in a land trust or LLC and make your payment as anyone else would. You still get the deductions for interest payments, deprecation, property taxes and maintenance plus the property creates a cash reserve to handle expenses like a new furnace or water heater?