New to Real Estate · Hillsboro, OR · Member since 2020 · 4 posts · 2 votes
Both would be done through an FHA loan.. I am leaning more towards purchasing a duplex and fixing it up for forced appreciation however my partner is leaning more toward a single family home to flip then re-sell after a couple of years. I know they are two different things and we are both open to both just indecisive. I would like to hear others people's opinions / experiences with the two?
@Crystal Cea, I like MFR better than SFR for the most part. If you get a duplex, you'll be able to live with lower living expenses (*Highly dependent on your location, so take with a grain of salt), build equity and get experience as a land lord.
@Crystal Cea they're essentially the same strategy. A multi family gives a few more options though. 1) You'll get income lowering your expenses while doing the hack part and 2) there's a higher likelihood it would cash flow better on the back end so you could potentially avoid selling in order to purchase the next property.
A downside is it'll probably require more $ for the renovation part than a SFR.
Depending on your market, I would take the duplex (or triplex or quadplex...) any day over a single family. If you can qualify FHA, then you can pay your mortgage using the renters income. Another thing is to consider is this- let's say hypothetically either you or your husband lose your jobs during COVID. If you own a duplex, then your renter will pay your mortgage. It adds in an extra layer of security for you. You don't have that luxury with a single family. Additionally, once you spend about a year in the multi, you can use that income to qualify for your next property. I think that it's also easier for a multi to fetch a higher price when you go to resell it.
Speaking from the Tampa Bay market, it can be tough to buy a single family and then manage your costs so that you actually come out on top when you flip it. A lot of this REALLY depends on your location. I'm not sure how far along you guys are in the process, but remember that there are likely going to be a lot of cheap foreclosures coming onto the market in about 9 months from all the people who lost their jobs and foreclosed (or worse, went into forbearance and couldn't pay it back) due to COVID. You may be able to scoop up a distressed property for a super cheap mortgage and flip it.
In an ideal world, maybe you could scoop up a distressed multi unit and flip that for a profit (and increased rents!).
Hello Crystal Cea, do you know anyone that is working and paid their rent during the Virus Crisis? After 90 days of not paying their rent, do you know anyone who will go back to MacDonalds and be able to catch up on the back rents? This is a time of High Risk for Rentals. The people that rent Duplexes in Tampa are the ones I have Landlorded for 30 years. I don't look forward to going through that mess again. If you have All Cash to do the Flips and can do the work yourself or have a Team ready to get the JOB done...Flips are my choice.