I don’t write about nor even bother looking at multifamily listings. We had an experience before we moved to town in a condo that went awry. Turns out the HOA were old, crazy and hated children. There was one neighbor that was a horder and another that had three adults and three children living in a one bedroom. I guess the owner of our unit forgot to mention those items.
So before you rent or heaven forbid buy a multi-family property knock on some doors, ask around and for gods sake ask to read the HOA rules. Don’t let the reduced price fill your heart with hope. Crazy is forever….Or at least until you can recoup the 6% commission and sell at breakeven.
Anyway I stumbled on a duplex for sale and for those who just can’t make the million dollar buy-in a duplex or triplex is a good option to get started. Up to three units you only need a regular mortgage with 10-20% down. (4 units = commercial and 25% down) Anyway when you qualify for the mortgage that you couldn’t afford without a tenant the bank looks at the income from the other units to help you qualify for more. I think they take 80% of the other unit’s rental income to help offset the mortgage.
539 Penn St is a 2/2 and a 2/1 on the same lot. They say it’s a total of 2120 sqft on a 6000 sqft lot. That’s priced at $684/sqft and listed for $1.45 mil (already down from $1.5 mil). The rub is that if the tenant in the 2/1 over the garage is only paying $1500/month you can only use 80% of $18k as your income offset. But if the tenant has already seen the backside of our ridiculous rental prices and is paying $1800-$2000 then that’s an extra $17-$19k in income to help you on your way to
renting from the bank owning a home. You’re still stuck living in a tiny home and now you are a landlord but you have someone paying a third of your mortgage.