Duplex or Single-family home?

Question

I am looking to buy my first home with my girlfriend and we want it to be a positive first step into real estate investment. We have little cash on hand and thus cannot afford to buy an expensive property (in Winnipeg, Manitoba). Is it a better idea to buy a starter home and try to "live-in-flip" it or should we max out our finances to buy a duplex and live in one side while saving up for a second down payment to buy a house for us to live in? Any advice is greatly appreciated. Renting is definitely not an option anymore...

Scott E. · Answer

Adam -

It really depends on what niche you and your girlfriend are interested in pursuing. Many seem to like the approach of starting out flipping to build capital, them move onto buy & hold. The angle of buying a multi-family as owner occupied and rent out the rest is also a popular option.

I would just suggest spending the next couple of months here on BP, and doing as MUCH research as you can. Get a good grasp on your options, then take action. After just a few months of research you will feel much more confident on what angle is best for you.

Leng Thao · Answer

I'd highly recommend against "max out our finances". Should anything go wrong, it always does, you'd put yourself in an bind that you may not be able to get out of. That's what I term, "financial suicide"...bad move.

You always want to have extra cash flow left over at the end of every month to secure and grow your investments. If you don't, you've jeopardized your ability to grow. Recommend to minimize your expenses, leverage reasonably, and grow your investments.

Jesse Hyder · Answer

@Adam Baker as its been said I wouldnt 'max out your finances' either. But my first home was a 4-plex and its a great idea. But be prepared to either become a landlord or budget in a management company. I recommend the latter over the former myself. Read a bunch on the forums and budget in everything, and then 10% more on top of that! :-D

I live in my unit for free and get $150 cash on top of that as well every month after all the bills are paid. It was a hell of a score.

Engelo Rumora · Answer

Hi @Adam Baker

Have you considered just renting while investing in property?

After accumulating enough properties they could put enough money in your pocket to cover your rent and also give you cashflow.

I have never owned any real estate where I have actually personally lived in but have been involved in over 100 flips in the last few years and own numerous properties.

Still renting haha

Just an opinion ;)

Thanks for reading.

Duplex or Single-family home?

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