Buying a duplex for first home?

[Mike Zimmerman]

I have been researching different real estate/ investment opportunities. I'm 24 years old, married, and I have a 14 month old son. I'm currently renting, but I would like to buy my foulest home by the spring. Ive considered investing in a duplex, renting one side out, living in the other. Is this a good way to get my feet wet? Any suggestions?

[Mike B.]

@Mike Zimmerman - YES.. buy a duplex, or if you can a 3-4 unit property.  As @Account Closed noted, less stringent purchasing requirements. My first home was a duplex with a garage in Philly and hands down that was the best thing I did several years ago. It needed full renovation, had a garage, tons of potential in a booming area. Got it for a great deal, did a huge reno and lived there 3 years before selling and flipping up to a larger SFH for my family. We were tight on space with a dog and newborn, thus the move. If we had more space, we may have lived in the duplex longer.

From my research and personal experience: 

Living in an owner occupied DUPLEX usually pays 1/3-2/3 of your PITI (mine was 2/3 paid!). If you're in a triplex.. you're likely living rent free at that point and perhaps making some positive cash flow each month. With a quad, you definitely should have your full PITI covered and making extra $$ each month.

Financing.. my duplex.. we did FHA, 3.5% down, renovated 75% of the property only (all interior work was done). Rented out the 1st floor (1bed/1bath rental unit) and after ~12 months of living there.. did a cash-out refi. That put us into a conventional loan, NO PMI, and an extra $20K back to us at closing so we could finish exterior renovations. We then sold 2 years after that (thus living there 3 years total).

Let me know if you have any questions about it!  My only (minor) regret is NOT buying a triplex or quad at the time but it was 'slim pickins' in the market