@N.A. N.A.
A duplex is a great way to get started in Real Estate.
1.) While this repair set up is legal, it will ultimately limit your tenant options because the majority aren't going to want that - your rent will have to be lower to offset it. This also puts the tenants in the position of just not reporting or addressing problems, which normally just turn into larger problems. I wouldn't advise it, especially if the other half is your primary residence.
2.) You don't necessarily have to shop in a high end area to make it worth your while, but you also don't want to buy in a terribly low area that is on it's way out - that's really only feasible for flipping fast when you run smaller risk of depreciation. Rule of thumb, especially for this situation, don't buy where you wouldn't want to live. After all, you are planning on living there. That said, start out as small as you can so you can quickly expand.
3.) You don't really have a lot to worry about here. I recently bought a house that was built in '61. Chances are the lead issue has already been addressed. If not, it will come up in your home inspection and you can work it into the contract.
4.) Property Management is an excellent option for some; although, I would only recommend it if once you have more properties than you want to keep track of or if you are investing out of state. For property management you can expect to loose somewhere between 70-100% of one months rent for leasing commission and another 7-10% per month for management fees. You are just starting out, keep that money in your pocket, it will pay those expenses you were worried about in question #1.
5.) HOA's aren't terrible - depending on cost. They are maintaining your property values by enforcing by-laws and keeping the grounds tidy. In the cases of most condos, HOA (or COA) dues include your insurance. Again, for an out of state investor, a good HOA goes a long way. Find out what the dues are, what the include, and keep in mind that property values are slightly more stable with a good HOA in place.
6.) You want to buy a 4 unit or less as your first investment and keep that owner occupant status as long as possible to avoid paying capital gains taxes. If you are living there, you are getting some nice tax breaks. Once you move on and expand, then you may as well start the LLC, which limits your liability, because you will be paying those extra taxes then anyway.
7.) If you are planning on holding onto the property for a while and generating cash flow, then yes, you want to put down the money necessary to avoid unwanted fees and insurance. If you were buying to flip, then the PMI or other fees/interest would matter very little because you would be cashing in within a short period.
Hope this helps, and feel free to contact me directly if I can be of help.
-Bryant
