Reddit reviews Investing in Duplexes, Triplexes, and Quads: The Fastest and Safest Way to Real Estate Wealth
We found 10 Reddit comments about Investing in Duplexes, Triplexes, and Quads: The Fastest and Safest Way to Real Estate Wealth. Here are the top ones, ranked by their Reddit score.
I love this question and always get it from friends of mine. I just send them the same list of books that got me started and convinced me to pursue strictly investing in multi-family. These have all been out for some time but the fundamentals of deal analysis have pretty much stayed the same. IMO, the multi-family game is all about numbers and finding ways to add value and force appreciation.
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In no particular order (and affiliate link free), these are all easy reads and great resources to get started;
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These will all talk about why multi-family can work better than single family and will familiarize you with concepts such as capitalization rate, its importance, how to calculate it, gross rent multiplier, internal rate of return, cash on cash return etc.
I've grown my re career as an investor over the past 16 years and am still learning new things everyday but for me there is no other tool like it that provides the potential for economic freedom.
Investing in real estate really requires that you know a little about a lot of things. These are the books I used when starting up:
General Overview:
Multi-Family Introduction:
Flipping Introduction:
Real Estate Formula Primer:
Landlord Tax Basics:
That is a good intro for books...BiggerPockets is always good too. However, most investors will tell you that there is only so much you can read about real estate. Read some books, get a feel and then go for it. It's the only way you can really learn.
https://www.amazon.com/gp/product/1419537253/ref=ppx_yo_dt_b_search_asin_title?ie=UTF8&psc=1
Read Investing in Duplexes, Triplexes, and Quads...they talk about doing exactly what you're talking about. You buy a duplex/triplex, reside in one, and rent the other space. Basically you end up living for free while someone else pays your mortgage. The benefit is that you don't get hit with all the requirements/taxes/etc that you'd get hit with if you bought a rental
Absolutely! We've never had much money, so we always tried to find ways to get into each with with little to no money out of pocket. Overall, we've been able to do that pretty well- most deals we bring $2K or less to closing. We sort of stumbled upon our first property. It was a double in a great neighborhood that needed A LOT of work. I actually called the sign because we were looking for a place to rent and found out it was for sale. We got an FHA 203K (renovation) loan to purchase it and fix it up. Since we did much of the work ourselves, we ended up getting a great deal on it and it cashflows really well! While fixing it up I read this book and it completely shifted my mindset and helped lay out a plan moving forward. Next we used the VA loan for the 4-plex, which also needed a lot of work. Same thing, we lived in one unit and fixed up the ones that needed to be completely renovated. Most people don't realize you can use the VA loan for multi-family. As long as you live in one of the units, you can use it for up to 4 units (can get 5 or more units if 2 or more eligible vets are in on the deal). The property can also have commercial space as well, but it is restricted to a certain % of the square footage- I don't remember the exact number off the top of my head. After the 4-plex, my wife wanted a regular house, we we bought a house for us to live in. Bad idea in my eyes because it slowed us down and restricted cashflow, but happy wife happy life, right? lol. From here it got tougher because we couldn't use primary residence financing anymore (VA, FHA, etc.) and had to find creative ways to make deals happen. For me the easiest way has been finding properties that need a good bit of work and using renovation loans from local banks- they typically will lend up to 80-90% of the AFTER repair value, so if the deal is good enough you can finance the whole thing without any money out of pocket. The next one was a SFH we scooped up really cheap at an auction. Starting bid was 50% of the appraised value from the local government and somehow I was the only one who bid on it. Put 10% down and we had 30 days to get the rest of the financing. We got the rest of the money ($35,000) from a hard money guy until I can refinance with a bank.
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Sorry for the long response, and I'm happy to dive deeper into anything you have questions about. I'd say the biggest success factors for us were 3 things: 1) cashflow is king. When times get tough, cashflow (and reserves) will keep the house of cards from falling over (especially when you're playing with little skin in the game like we do). 2) You have to be disciplined and plan on not using any of the money you make for personal stuff. The more you can reinvest, the faster you can grow. 3) Don't be afraid to pull the trigger. A lot of people get cold feet. Know your numbers and when the right deal pops up, don't be afraid to take the plunge.
I recommend this book: Investing in Duplexes, Triplexes, and Quads
This was one of the better ones I read:
http://smile.amazon.com/Investing-Duplexes-Triplexes-Quads-Fastest/dp/1419537253/ref=sr_1_13?ie=UTF8&qid=1421721426&sr=8-13&keywords=real+estate+investing
He is very convincing as he explains why duplexes, triplexes, and quads are better money makers than single family homes. Convincing enough that I bought a duplex that was zoned for single family, duplex, or commercial. I went over rent scenarios with my realtor (who is now my property manager) and she and her colleagues agreed that I could get $2200 rent total as a duplex (1 bed and 2 bed units) but only 1500-1600 as a 3 bedroom house. So I make enough on it that I can pay manager 10% and still have a good profit, plus she does all the work.
I cannot remember the exact numbers but you can get some write-offs living in a property that you also rent out if it isn't commercial property. Src: this book. I would totally recommend that book. I have been looking into real estate as a side gig and this book has been awesome for good advice without any bullshit. It is an easy read.
**edit: second part was for OP
Okay, people are saying no but I disagree. Yes! It's a great time to invest.
Look for a multi property. I bought a duplex at 23 with 40k in debt and I'm doing way better then I was before I splurged on the buy. I get rent from my tenant and my mortgage is cheaper then what it would cost to rent. I would recommend a duplex that way if for some reason you can't pay your mortgage one month due to bills you have someone else paying you rent to help cover it. I would highly recommend not doing that if at all possible and using the extra income to build up a savings for repairs you're responsible for but after getting 10-15k in savings for repairs you can start taking the rental income to pay off your debt faster.
Here is a fantastic book I recommend if you want to get into buying and investing. Renting is a great way to throw money out the window. You are paying off someone else's mortgage. Don't listen to the nay sayers and go start paying something that will be YOURS.
OP, a lot of people have provided you very good advice on paying off your student debt vs. getting mortgage debt.
My question for you: In your dream of home ownership does it have to be a single family home OR are you open to multi-family home ownership?
If you are open to MFH, then look into:
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A SFH is not necessarily an asset but a good MFH certainly is. A MFH will allow you to achieve your dream of home ownership while splitting the burden of paying the mortgage with your tenants.
It is certainly going to add burden of finding tenants, managing your property etc. but it will be an asset which could potentially generate income if you buy it right.