New to Real estate, looking for duplex, please advise

**vega785** · 10-22-2007, 07:51 PM

I'll try to make it sweet and short and to the point.

Im 22, live in Miami, FL, and just graduated from college. I started a new job, but Im looking to do something on the side. Never been in the real estate market, but I feel I should buy a duplex or 4plex to start off. Im not looking to get rich, I want to experience the market and take it from there. If I can break even renting out the units that would be great, if I have to cough up a few hundred dollars a month out of pocket to pay the mortgage thats fine.

What are your suggestions? Is this a good route to start off? What price range should I look into? Im open to any suggestions. Also, if you are in the Miami area would like to be a good samaritan and wouldn't mind leading me in the right path it would be greatly appreciated!

Thanks in advance!

**leri** · 10-23-2007, 02:59 AM

I have read your post. One of my friend have reside nearby Florida. Same as you, he wanted to purchase a home for his family. For this, I have met lots of people and real estate companies. He informed me that not all bad, some of them were also good. Meanwhile, he visited Alliance Partners - corporate planners. He was very much happy with their facilities as he said that they are provided all types services for real estate.

So, I think that it may be helpful for you. By searching the above earlier mentioned term "Alliance Partners - corporate planners", you will get its site. So, visit it and I hope that you will be got the best advise form them.

Be happy and gets fun.

**IggysListing** · 11-16-2007, 04:34 PM

Do you own your own home?
If not start there.
You can buy a duplex and live in one part or buy a single
family residence and do one of the following:
Get a roommate(s).
Buy a house that is already partitioned (such as a basement).
Buy a house that is easily partitioned.
Own your own home and let someone else pay for all or part
of it.
Best wishes.

**Greg** · 11-17-2007, 05:16 AM

If you live in part of it you will save the rent you would be paying someone else. When you do your calculation don't forget taxes, insurance, liability insurance, maintenance, and the vacancies you will experience in between renters and the clean up you will have to do between renters.

**thedeallocator** · 11-17-2007, 05:46 PM

Buy your primary home first. And buy investment property with an exit strategy in place.
Why do you want to "cough" a mortgage payment on a property that is not making any money?
Make sure that you are making a profit of at least $200-300 before you buy any property. There's a great blog here with a series on Real Estate Investing.

**Codythebest** · 11-18-2007, 04:40 AM

The more units, the more profitable.
However, make sure you can a least break even because FL is so expensive, I'm not sure rents will pay for the property.

**getofftheporch** · 11-21-2007, 07:19 PM

Some great advice here. If your long term goal is to own investment property and a single family residence I would start with the investment property.

It is much easier to obtain financing for an owner occupied property than non-occupied. You can get into the property with a much smaller down payment and better interest rate. If you start with a single family residence (home) and then want to purchase investment property you will need more money down or a tough interest rate. Additionally, when you are young and without a big family it is not as hard to live in a smaller unit.

The more units you own (4 family) the smaller part of the property you (a non paying tenant) will occupy (1/4th). In a two family you will be occupying 1/2 the units. Also, if you have one deadbeat tenant you will only be missing 1/4th the money necessary to make your mortgage payment. The only downside I have found with the 4 family is a larger turnover in tenants.

I own both and I make more money with my 4 family. The advice you were given above to watch the cash flow is excellent. It is easy to fall in love with a unit and end up with a negative cash flow (should try to avoid!!)

Best of Luck!!

**ER Rentals** · 11-26-2007, 12:29 PM

Cash Flow,
Cash Flow,
Cash Flow,

Unless you have money to burn don't go negative every month. The key to wealth in R/E is compounding your returns, you can't compound a negative. If you go negative now you're in trouble, taxes go up, utilities go up, everything goes up... and trust me faster than your rent. I can't raise rent now as fast as my expenses are going up, and if your mortgage rate goes up, then you'll be squeezed. You'll be working a P/T job just to cover the losses every month.

I own many investment properties and they are all cash flow positive, bank the money in a separate account so you don't get all excited and blow it on a stereo system. Then religiously either use the cash each year to improve your property or buy another one... that's compunding at its best. Each reno I do has an ROI. Eg does adding a dishwasher bring in additional $15/mnth rent - Does it cost $500 to add one? 36% ROI ... see what I'm saying! Think like this at all times!!! I'm 30 now and started at 25, I own 9 properties and started with $5k. It can be done!