Not all investing is created equal, and that is why I love investing in duplexes and other multi-unit properties. In one fell swoop, my return increases substantially and I put more money into “hip national bank.” That’s my kind of deal!
If you are a new investor, you definitely need to learn how investing in duplexes will explode your income. While it is great to buy houses, there is nothing quite like multi-unit properties!
Explode Your Income by Investing in Duplexes and More
I have had several awesome occasions where I have found some incredible deals that happened to be duplexes, quadplexes, or more. And, just like single-family houses, I focus on the properties where it looks like things may be ready for sale.
One time I found a quadplex when driving to and from the gym in the morning! I noticed the place looked deserted, had no cars in the driveway ever, and one day happened to see the property owner there.
I was a hot mess since I had just come from the gym and yet still had a deal within thirty minutes! The seller owned the property free and clear and decided to work out an owner financing solution to make the sale happen without issue.
Now, I had recently just bought a property up the road, so I knew the rent would be around $800. However, this house had 4 units (even though I originally thought it was only a duplex!)
So, I figured I would need to charge a little less, maybe $500 a month, but I’d still come out at $2000 monthly from the four units! Cha-ching!
This is the power of investing in duplexes and more. The income potential is so much greater, especially when it comes to passive income! I know it might seem scarier than single-family houses, but trust me, it is not.
Here’s the deal, though, I still recommend that my ladies in FDDF get started with doing some single-family home deals to get their feet wet before jumping into multi-unit properties. Could you do without that? Sure, but I wouldn’t recommend it.
There is a great amount of learning that happens when you can work with single properties to get a feel for real estate and how deals work. So, I definitely want investing in duplexes to be one of your goals, but just make sure you get a little experience done first!
Another thing to keep in mind is that there are some general zoning rules you need to know. For properties that have one to four units, this is still considered residential. But, when you have five or more units, it becomes commercial. Some properties might even have a little mixture of this going on, too, like if a grocery store is on the bottom and residential units are on top.
As an investor, you need to know the zone of your property and make sure you understand the real estate laws.
Examples of commercial properties could be apartment units, trailer parks, storage units (which are amazing), offices, churches, and business franchises. Single-family, duplexes, triplexes, and quadplexes, though, fall under residential. Got it? Awesome.
The biggest idea to keep in mind is that for the same out of pocket cost for the property, you can end up making a ton more each month! Will it come with different headaches? For sure, but that’s why I want you to have a little experience under your belt before you jump in.
My favorite way to explain it is that you can get a single-family property under contract for $100,000 OR you could get a five-unit property under contract for $100,000. The single-family house provides a monthly rent of $800, but the multi-unit property gives $800 per unit! That’s $4,000 a month! If that doesn’t kick your hair up, I don’t know what will.
I hope you can grasp the incredible power of investing in duplexes and other multi-unit properties. There is a lot of potential, so don’t overlook this addition to your real estate portfolio and bank account!