Two Directions To Go

[Zachary Beland]

Hey guys!

I have two directions I can take to get my foot in the door of real estate. My first is to buy the house I am renting from family right now. It is a 3 bedroom 1 bath single family house built in the 1940s worth about $260,000. I have done about $5000 in renovations to the home just to make it more comfortable to live in. It has inherently made the home more valuable. I know I could get a really good price to buy it and I already know some people who want to rent it really bad if we decide to move out. I would have immediate equity in the home $20k range but I would never sell it because of sentimental value. Also, I could probably make this transaction happen in the next few months.

Option 2 would be to continue to rent this place and buy a duplex. The issue with that is this crazy high market in NH right now. Also, I just started a new career and my debt to income ratio isn't ideal. So I would have to wait probably 6 months to a year to have healthy savings and lower my DTI.

Should I wait to buy a duplex or should I buy the home I live in currently? Also, my goal is to build a portfolio of multi family long term rental properties.

Thank you for the advice in advance fam!

[Ryan Thomson]

@Zachary Beland have you considered asking the family if they would seller finance? Then you could buy your current home and continue to work on your DTI and savings and buy the duplex when you are ready.

Other option: Set up a rent to buy option with the person who owns it. Lock in a purchase price now. Rent it yourself or to tenants and then buy a duplex when you are ready.

The option I like best though is the house hack idea from @Eddie Brady . This would allow you to get into the duplex for 3-5% down and you can use the income from the other half to help you qualify. You would potentially live for free or make money (especially if you rented out the other bedrooms in your unit).

Then in a year you could do it again with a new duplex and easily rent out the unit you move out of in your first duplex.