Any success with Multi-family in Annapolis area?

[Kyle Byrd]

Hi there :)

I'm brand new to real-estate investing but motivated to take action and start gaining momentum on my dreams of building a portfolio of properties. 

I currently own a townhouse (2400 sqft, 4bd, 3bth) in Edgewater, MD (Annapolis area) that I want to move out of and rent. I have the funds to buy another primary residence in this area but not enough for an investment property that would require 20-25%. Plus, I'd prefer to take baby steps before investing out of state where I could better afford a 25% down-payment.

My preferred options are:

1. house-hack with a duplex under ARV; live in one unit => renovate => rent the other unit

2. buy a SFH under ARV that could be converted into a duplex (preferably adjacent units vs top/bottom) - I'm assuming the biggest challenge with this strategy would be separating the infrastructure for utilities; and costly. Zoning also seems to be a problem (see below)

3. buy a SFH under ARV; live-in renovate => rent => move to a new primary => eventually refinance to pull value out

It seems the multi-family options are extremely limited or nonexistent in this area. I did a little digging into zoning laws which may explain it. R10, R15 zones are sparse and seem to be the only that allow for duplexes. R5 is a little confusing to me - "intended for low-medium density single-family detached residential development at an urban density of 5 dwelling units per acre". The mentions of "single-family" and "5 dwelling units" seem to contradict each other. If R5 is an option, then I might have some areas I could look into.

All of this leads to my two questions:

1. any tips/advice on how to best transition between my current primary residence and a new one? I'm thinking of 1. find a renter 2. move out and rent my own place while searching for next deal 3. buy a new primary

2. Is pursuing a duplex a lost cause in this area? would option 3 from above be the best option in this area?

Any advice is much appreciated!