First Investment: Duplex v. Single Family

[Austin Rose]

Hey all!

I'm pretty new to the forums here, but it's been great so far. I want to complete my first deal by May of 2017, and I have reached a crossroad.

I originally was planning to make my first investment a "bread and butter" property, a starter home in one of the many neighborhoods that surround me in the suburbs outside Philadelphia. My county (Montgomery) is somewhat of an affluent area so unfortunately many of the homes around me are well outside my intended price range ($80,000-$180,000).

However, I recently met with an agent for lunch. He looked at my plan and pointed out that these types of properties produce much less cashflow than something like a duplex, and the property taxes in many of these areas easily are over $4,000 per year.

His solution was to buy a duplex in a hot area of Philadelphia. Property taxes are much lower, and duplexes yield a much better cashflow. I checked out a few zipcodes he gave me (19141, 19126) on zillow.com and it seems as though many properties are going up in value and being sold for right in my price range.

I write this to inquire for advice from those who are more experienced in investing. Is a duplex a manageable first investment? Should I bite the bullet and trade off cashflow for a slow and steady starter home? What would you do?

All questions and comments are appreciated, thanks!

[Lisa Troxel]

Hi @Austin Rose

There are many posts and articles on the subject of SFD vs Multi Family. You need to read them. Turn over, resale, roofs and cash flow issues are different for the two different investments. I personally like mutifamily investments but there are reasons that you might want to avoid them. If you are planning on a house hack, do you want to live next to your renter? Congratulations on going after your first investment- this will be an exciting adventure!