Buying a Duplex in Anchorage

[Shaun Harbison]

I'm active duty in the military on JBER and I plan to remain here for the next three years then separate from the military and remain in Anchorage. My wife and I currently live on post but we are strongly considering purchasing a duplex or triplex in Anchorage for $500k to $650k with a VA loan to live in one unit and rent the other(s). Between BAH and rent I'd ideally like to make a small profit but looking at the cost of housing combined with the property taxes and utilities, it seems like it would be a struggle to just break even. My wife and I are first time home buyers so I feel like we're misunderstanding something. Basically we don't even know what we don't know. We currently have a lease to live on post until the end of July so were not trying to rush this but I want to be ready to pull the trigger when the right opportunity comes. Is there anyone here who was in a similar situation? What did you choose? Would you do it again? I would appreciate any insight from this community. Thank you.

[Jeremy Bartlett]

Shaun:

You are right about the complexity of duplexes in the Anchorage area. The fact of the matter is that the price of housing vs rents is a little complicated in Anchorage and you will find that it is difficult to cover the cost of expenses with a duplex because of what you can charge for rents (especially at that price point). Typically speaking, a triplex or 4plex will show a better return in this area and you will carry less risk through ownership of a 3-4plex because you can better coordinate lease structure to ensure timing works in your favor. If you think about it, if you have a vacant unit in a 4plex you are only going to carry 25% risk of having to pay some of the mortgage - a triplex is 33% risk, and a duplex you carry 50% risk of having to carry the entire mortgage. What you can do with more units is mitigate that risk and structure the deal such that even if you have a vacancy in a 4plex, the cost of operating that property is still covered the other 3 units - not possible in a duplex in Anchorage that I've seen.

I am also active duty, but have a background in real estate, and my wife is currently a realtor who specializes working with military clients. We also bought a 4plex for $525,000 when we first moved up to Anchorage; and have since saved enough money to buy an additional single family that we now live in (which the 4plex is paying for). Its all possible depending on how much risk you're wanting to accept/life constraints you may have. 

I'd love to talk to you more about it in detail if you'd like. Ill shoot you a PM with some contact info and maybe we can meet up and figure out a way forward, or I can contact you with my wife and she can even get you set up on a search and help you navigate some of those "unknowns" you mentioned before. Or, if you want to just talk straight investment strategy, you and I can meet up and talk about how to wade into the investment game. Im all about helping out my military bros who are smart enough to get in the game.