Questions About Purchasing a Duplex as a rental

[Shayan Sameer]

Hello BP Team,

I hope all is well!

I have a question about purchasing a duplex and renting it out. This would be my first time purchasing a duplex, and I’m looking into it as a way to expand my portfolio. I’ve found a duplex that seems to be in good condition, with both units currently rented out. However, one tenant isn’t paying rent, and it looks like I might have to go through the eviction process.

When evaluating a rental property, do you typically use the 1% rule? What would you consider a good minimum profit margin? I understand that I need to account for taxes, insurance, and other costs—

Should I go with a LML and then do a refi later on?  

I'm thinking I can get the property for $380k plus 50k rehab.  

Additionally, are there any other factors I should be considering when purchasing a duplex or triplex? Do you think a duplex is generally a better investment than a single-family home for rental purposes?

I’d love to hear your thoughts and advice on this

[Jaycee Greene]

Quote from @Shayan Sameer:

Hello BP Team,

I hope all is well!

I have a question about purchasing a duplex and renting it out. This would be my first time purchasing a duplex, and I’m looking into it as a way to expand my portfolio. I’ve found a duplex that seems to be in good condition, with both units currently rented out. However, one tenant isn’t paying rent, and it looks like I might have to go through the eviction process.

When evaluating a rental property, do you typically use the 1% rule? What would you consider a good minimum profit margin? I understand that I need to account for taxes, insurance, and other costs—

Should I go with a LML and then do a refi later on?  

I'm thinking I can get the property for $380k plus 50k rehab.  

Additionally, are there any other factors I should be considering when purchasing a duplex or triplex? Do you think a duplex is generally a better investment than a single-family home for rental purposes?

I’d love to hear your thoughts and advice on this

Hi @Shayan Sameer. It would help the forum (and the responses) if you could provide a little more context. What city/market is the property in? What is the ARV? What would the rents be for the duplex after the rehab is complete (assuming both tenants are paying rent)? How long would the rehab take? Also, I've heard of "HML" and "PML", but "LML" is not a term I've heard before.