Owner-Occupied duplex in a competitive market

[Tuli Jakobson]

Hey all,

I'm currently looking to buy an owner occupied duplex as my first property. However, I'm finding that most places in my area (Eugene, OR) don't even hit the 1% rule (did this used to be 2%?) and do not cash flow with the 50% rule. Before I learned of Bigger Pockets I was aiming to come as close to living rent free as possible while budgeting for about 2 months rent for vacancy/repairs (based on the advice of a friend who owner-occupied). 

2 bed/1 bath(each side) duplexes are currently selling for around 220k-240k. Typical rents are $700-850/mo. The rental market now would seem to fetch a higher price, but a lot of the tenants are family friends or long term, so rented below market.

Taxes are about $2700-$3200/yr

My current rent is $875/mo (for a 3 bed duplex, rented below market. I only need 2 bedrooms). Taking into account my current rent and 20% down, a typical duplex I'm calculating my cash on cash at about 12%. Again this sounds less than ideal.

The other large obstacle I'm up against is the fact that I'm getting laid off in 3 months, so I need to move now while I can still get financing. I don't want to start with a bad deal though and maybe the market is just too hot.

Ideally I'd find a fixer upper and spend a couple of months working on it post layoff, but those deals seem to be few and far between. I am fairly handy and would enjoy fixing a place up and giving it more "curb appeal".

Here's a spreadsheet I put together with 3 scenarios. Can you guys double check my numbers and let me know what you think? Mortgage Comparison

1st scenario - Triplex, Pros - near my son's school, double car garage for myself, best cash flow. Cons - Needs a lot of work, highest up front cost

2nd - Typical duplex, Worst cash flow

3rd - Minor fixer upper duplex, Pros - lowest up front cost, better cash flow than typical, cons - not the best neighborhood, not ideal layout (all common walls shared).

Well, that was a mouthful. Any and all feedback is welcome! Thanks in advance.