First Investment Help

[Brendon Grover]

I'm looking into buying a multi-family property ( holds 2 families).  This is my first investment property.  I have been doing a lot of research and decided that it might be best to owner occupy and "flip" my first property being a multi.  Would a conventional loan be best for this type of property?  My family and I are selling our current house and would move into the multi.  Any suggestions or advice on this decision? 

[John Leavelle]

Howdy @Brendon Grover

You need to provide more information on what your goal is.  It appears you are trying to combine 3 different strategies together.

1.  Buy and Hold Multi family rental using conventional financing.  Passive income investing.

2. House hack (Owner occupy) Multi family rental using FHA loan.

3.  Buy and Flip for profit.

Here are the problems I see.

When you flip a property the idea is to purchase at below market value.  Rehab the property.  Then resale at a higher price (Market Value).  You must be able to make a profit after you include the purchase price, Rehab costs, Closing and Holding costs.  Is this Duplex a distressed property that can be purchased at a good discount?

Investors usually purchase Multi family properties for long term passive income.  They are not expected to gain in property appreciation.  If they do appreciate in value then that is a bonus..

The normal purpose for using the House hack strategy is to be able to get into real estate investing with a minimum down payment.  If you owner occupy the property you are required to stay for a minimum of one year.  It is difficult to have positive cash flow on a Duplex when using this strategy.  In fact you may have negative cash flow (money out of your pocket) until you move out.  A 4Plex is a much better option for using this strategy.  

You need to have a long term REI plan . What are your goals? Then figure out the best strategies to get you there. I would concentrate on one strategy at a time. Get proficient at it. Then you can explore others if you want.

Brendon post information about the Duplex you are looking at here.  Let's see what we can recommend for you.

Hope this helps.