First time buyer in CA - Single Family home + ADU or Duplex ?

[Jeremy Pelle]

Hello all, first of all I am very humble to be part of BiggerPockets community.

I will be buying my first property in Los Angeles probably by the end of the year. The strategy is first; investing in a renting property, second; living for “free” (I am currently spending $1,700/mo for my rent).

I have $40K down payment and qualify for a $500K loan (FHA).

According to what I understand so far… I think I have 2 options:

1. Getting a duplex (lease 1 unit, live in the second)

Or

2. Getting a Single home family with ADU (live in the ADU)

The duplex option would require probably an extra $200K but I wanted your point of view concerning these 2 options.

Thank you so much for your time !!

[Alejandro Garcia]

@Jeremy Pelle

Is the $500k including the possible rents you can get from a duplex? You can talk to your lender about this so you can get your limit increased. This was the only way I was able to afford the duplex I am currently in contract in. My lender estimated $2k in rents to about $100k increase to my limit.