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1 Jul

First Time Home Buyer? Why Not Buy a Duplex?


Posted by: Peter Paley

One of the best-kept secrets in the mortgage industry is the Owner Occupied Rental Program.  Did you know, that anyone can buy and owner-occupied duplex, tri-plex or even a four-plex with only 5% down?  It’s true!  The best part is that many lenders will allow you to use 100% of the rent to help you pay/qualify for your mortgage.

With rental prices sky-rocketing across the country, this is a great way to get your first home and build equity fast.  As I write this I’m sitting in one of my rental properties hosting an open house in hope of renting it out ($16oo/month).   Rental properties an excellent way to build equity, earn income and gain your financial independence.

If you earn $50,000 per year (and have no debt), under the new mortgage qualification rules you would qualify for a purchase price of approximately $260,000 with 5% down payment.   However, if you consider and owner occupied duplex your situation changes dramatically.   You can now afford a duplex worth about $350,000.  We are assuming a rental income of approximately $1500/month.  This rental income would mean your adjusted mortgage payment would be under $200/month.

This is how I started building my own rental portfolio.

Please contact me for more information.