You’ve evaluated your housing options and decided a duplex is the right option for you. Great! By now you probably already know that duplexes are one of the best ways to get into real estate investing. Here’s what’s next:
The best part of investing in a duplex (or triplex or fourplex) is the ability to use residential financing to get started. This means if you are purchasing your first real estate investment property to owner-occupy (live in one of the units), you may have the option to use an FHA program with down payment requirements as low as 3.5%.
While every mortgage lender can finance a duplex, if you plan to build a rental portfolio it is a good idea to find an investor-friendly real estate lender. It’s important to be pre-qualified by a lender before you start searching. Sellers and listing agents require offers to be submitted with a pre-approval letter to show you are a serious buyer.
Like choosing the right lender, you will want to work with a realtor who either owns rental property and/or understands real estate investing. Every realtor can help you buy a duplex, however, realtors who specialize in multi-family investments understand what to look for when purchasing an investment property. An investor-friendly realtor (like us!) can be your greatest asset in helping find the perfect property for you.
Once you’ve been pre-approved and have found a realtor, you’re ready to start searching for duplexes for sale. At the beginning of your search, you may need to tour multiple properties to figure out what you like and will be the best investment. Multi-family criteria to consider include financials, location, type, amount of deferred maintenance, and age of the property. Once you have narrowed down your search criteria, you will be able to evaluate properties more quickly once they become available. In our current market, the ability to quickly evaluate a property can be the difference between closing a deal on a profitable investment property or not.
You’ve found the best real estate investment on the market … now it’s time to make an offer! Unexpectedly, this is where most people get stuck. Even if you’ve read every real estate book and listened to every real estate podcast, you can get cold feet when it’s time to take action. We understand how scary it is to purchase your first rental property. Although we cannot predict the future, there is never a better time than the present to get started in real estate investing.
You can always get a home inspection before the final acceptance of any offer. Before you move forward on purchasing a real estate investment property (or any home!), take your time to understand the inspection report and make sure the property is a good investment.
As seasoned investors ourselves, we are happy to advise on property management and best practices for finding and screening prospective tenants.
Congratulations on your first duplex! See… it wasn’t that difficult. So, what’s next? One of the best things you can do is connect with other local real estate investors. Building a network of other investors is great way to get referrals for anything that comes up. Here are a few places to meet people:
Groups we run:
Other great resources:
1 in 5 American households are multi-generational and interest in multi-generational housing is increasing. Multi-generational housing is defined as a home with members of more than two generations living under the same roof. Whether due to necessity or preference, more families are considering this arrangement and Minneapolis is well suited to address this demand.
What has changed about buying a house during Covid-19? A decline in the number of showings does not seem to have impacted prices.
Scott Hoefler of Side by Side Realty joins the Maximizing Your Property Value podcast to discuss the best strategies for living next to your tenants.
We are living through uncertain times and looking at the world differently than before. Our mission at Side by Side is to help you create financial freedom through real estate so you can weather any storm. Or pandemic.
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