All Forum Posts by: Dave Faris

Most duplexes are 2bd, 1 or 2 bath.  Those you can buy between 200-250k.  It's uncommon to find 3+ bdrm duplexes that aren't conversions. (Converting a big house into multiple units).  Although, a lot of town homes are being built with a shared wall and 3+ bdrms.  Those are usually sold separately.

I'm not a builder, but I know new construction single family houses cost 300k or more, so building a 3bd/3bath duplex (or town home) could easily be 400-500k.

Does this area have a tax abatement for new construction?  That would help.  I'm assuming your monthly principal and interest payment is around 3000.  Add in property taxes and insurance and that's your break even number.  Sounds like 1700-1800 might be a rent target if this is comparable to your current rental.

There are easier ways to get into real estate.  But this might work if you can get by without positive cash flow for a while.

Evan, you should absolutely take your good credit, good income, low debt, and $1700 rent payment and buy your own house.  I love the house hacking strategy of buying a duplex as well.  DO these things.

I invest in the Des Moines area, which is comparable to Cedar Rapids, so let me be frank.  Don't build a $600k duplex with 5bd/3ba per side that requires $2300 rent.  There are a lot of nice houses that rent for less than $2300, let alone a duplex.  Can you cover the difference if you only rent it for 1800?  If not, can you sell it?  I doubt the value would be 660k, but even if it was and you needed to sell, you'd be looking for a unicorn to buy this property for what you owe plus the 50k in closing costs. 

It might produce enough income as a short term rental or a rent by the room property.  But my recommendation is to buy a $250k duplex and start building your future.

Best of luck!

Hi May,
I didn't know you were interested in RE investing?!  I plan to attend the investor meet up at the Iowa Tap Room as well.  That's a great pace to start.  If you can't make it, reach out and we can meet sometime.  I'm glad to help.

As a landlord in Des Moines I can tell you that appealing the inspection is a waste of time and money.  

We’ve had a lot of storms in the last year so I’m guessing you have some wind and hail damage.  You could make an insurance claim to replace the roof.  I have a contractor that only does insurance claims and we’ve had 13 replaced in the last year.  They’ll get it done quick.

Then I’d say paint the shed and fix the furnace.  The principal pay down over the next few years will make up for your expense, not to mention rent increases and appreciation.

Reach out if you want to chat more.

Hey Manny, welcome to BP!  I love the Go-Giver too.  Lets get together to discuss your plans.  I'm glad to help!

Hi Justin!
I've been investing with the brrrr method for many years and have quite a few rentals.  I'm glad to help.  I'll connect with you BP and we can meetup sometime to talk about your plans.

@Darius Argentinis The first step is to check with the City of Des Moines to ask if they will allow you to convert it to a duplex. Des Moines has been trying to get the existing multi-family conversions turned back into single family. A number of years ago I bought a house that had been a 5 plex that was converted back to a SFH. The city wouldn't let me make it a 3-plex, but they allowed it to be a duplex because the prior owners didn't remove the 2nd kitchen.

Numbers on this deal look good to me.  Multi-family increases your cashflow and income, but also your headaches.  If you hire a property manager than go for multi-family.  

I manage my own properties and prefer single family houses because the tenants often stay longer, mow the grass, scoop the snow, and have less maintenance calls.  I owned a 10 plex for a while and it burned me out.  Financially speaking, I should have kept it, but I'm glad we got rid of it.  Managing 10 single families is a lot less work than the 10-plex so I stick with SFR.