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Old 08-27-2018, 08:58 AM
 
Location: Mid-Atlantic
12,526 posts, read 17,433,746 times
Reputation: 10629

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Quote:
Originally Posted by jea6321 View Post
hence why I tell everyone who will listen to buy a small multi family as their first purchase. Make your primary residence an actual investment, and be able to get in the game for a low % down. Its the best of both worlds and one of the few ways a person starting with very little can get a jump start on their finances.


I do the same to prospective buyers. My first home was a duplex in Dormont. Went FHA, little down payment, used the income from the 1st floor to boost my income to qualify, built up equity, moved out, rented it for about 15 years and then sold it. All in all, a good deal, almost painless. Don't see why more people don't go that route.
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Old 08-27-2018, 09:30 AM
 
Location: Pittsburgh
1,491 posts, read 1,445,612 times
Reputation: 1067
Quote:
Originally Posted by Copanut View Post
I do the same to prospective buyers. My first home was a duplex in Dormont. Went FHA, little down payment, used the income from the 1st floor to boost my income to qualify, built up equity, moved out, rented it for about 15 years and then sold it. All in all, a good deal, almost painless. Don't see why more people don't go that route.
same route I basically took. 4 unit FHA. I only qualified due to the additional 3 units of income. A lot of people thought I was crazy for taking on so big of a purchase on my income at the time. I moved around the building fixing up the places as they went vacant. lived for free from day 1. rolled all profit back into upgrades and repairs. eventually I used a home equity line of credit to buy the next place. and so on.

I have not sold anything and don't plan to anytime soon, but its an example of how you can start with very little and set yourself up to be financially well off. You just need a plan and the willingness to stick it out long enough to see it through. It can take 5-10 years or more, but the fruits of your labor can pay off for decades into the future.

And the icing on the cake is if we truly are in a housing bubble that pops, typically rents remain stable to increase as more people abandon buying and rent. You are more protected and even if your building goes down in value on paper, the rents should still keep it profitable, which in turn keeps the value more stable. If you own a few rentals that subsidize or completely pay for your personal home, you are less likely to get into a situation where you may default and can weather any storm through to the next recovery.
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Old 08-27-2018, 11:09 AM
 
Location: Mid-Atlantic
12,526 posts, read 17,433,746 times
Reputation: 10629
And if things really so south, you have a free place to live!


About 3 months after I moved in the first floor tenants decided to move. I spent about a month fixing it up with paint and carpet. Plus, each unit had 18 windows, what a pain, I put all new venetian blinds on them, wrists were killing me. I put an ad in the window, a young couple stopped by, looked at it, went up to Cain's and had a few brew, came back and gave me a deposit. Best tenants ever. The guy was always fixing things all over the building and taking it off his rent. Worked great, never raised the rent in the 7 years they lived there. Got lucky.
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