Financing A First Duplex

[Connor McGinnis]

Hello,

I am looking to purchase my first duplex in the New Orleans market. I moved here almost a year ago now and know of a few growing neighborhoods.

My current apartment lease ends in April so I am a bit pressed for time.

I am working with a realtor on finding good investment properties now. My plan is to live in one unit and rent out the other.

My question is regarding financing the deal. I have about $50k cash that I can invest towards a down payment. I make about $75k-$85k a year depending on my sales.

However, my dad is a successfully real estate investor in the Midwest with about 600+ units.

We are trying to figure out what makes the most sense on how he can help me finance the deal:

-he makes a large down payment for me and I have less to pay back the bank and I can pay him back at a very low interest rate if any.

-he buys the property and I pay him back over time at a low interest rate (more risk to him)

I am sure there are other routes we can take as well so I would invite any advice or feedback that anyone has.

New Orleans duplexes in a good area go for $400k-$500k and that is my budget. Property taxes are high and cap rates are typically between 2-4% from what I have seen so far.

I appreciate anyone’s advice/insight in advance because this would be my first deal ever and I’m 24 years old.

Thank you!

[Tim Johnson]

Hi @Connor McGinnis, congrats on getting your plan together...

Obviously your Dad has many options to help you out...and that may be good.

If you ARE looking to take title in your own name, an FHA loan (owner occupant) at 3.5% downpayment would be great - ($17,500 on a 500K duplex) and you'd be able to cover other closing costs as well. Just my 2 cents.