Buying a Duplex, Triplex, or Fourplex
Buying a Duplex, Triplex, or Fourplex
Buying a Duplex, Triplex, or Fourplex for sale is easier than most realize!
I was talking to a real estate client the other day who has been looking for a home for sale in Portland for his family for the past year. They were approved for $600,000 back in March of 2022 and now they are only approved for $475,000. Quite a difference! They felt hopeless finding a home and were considering just renting while hoping and praying that things change.
Does this sound like you? Are you finding it hard to find or afford a home for sale in Portland? Have you ever considered buying a Duplex, Triplex, or Fourplex? It's easier than you think and though you are sharing your property with one to three other parties, it's a fantastic way to get into a property, as well as have a future investment.
As of February 2023, mortgage interest rates have more than doubled from last year while rent increases. Remember rent is 100% interest. Home prices have only come down a little and look like they are going to remain the same with inventory still low, and possibly increase as we approach spring and summer. This has caused a lot of home buyers to change their minds about buying a property or giving up. If you are considering a condo for sale, an attached home for sale, or a townhome for sale, read on and consider if you should speak to us about your options in buying a Duplex, Triplex, or Fourplex and possibly get a lower payment by purchasing a Multifamily home!
How can I afford to buy a Duplex, Triplex, or Fourplex?
This is the question my client asked me when I asked if they would be willing to consider buying a Duplex, Triplex, or Fourplex. Once I explained how easy it was, they not only were able to see the benefits of buying a duplex, but they also now have an investment property that they are planning to keep as a future rental and after a couple of years, find and move into the home they want while using the additional rental income from both units, allowing them to afford more home. Soon they will have experience as a landlord and a future investment to help them retire! Here is how it works...
In order to avoid a higher interest rate, a lender will allow buyers to be approved at owner-occupied mortgage interest rates versus non-owner mortgage interest rates as long as you move into one of the units. You can also be approved for 100% financing with a VA Loan, 96.5% financing with an FHA Loan, or 85% Financing with a Conventional Loan for Duplexes, Triplexes, or Fourplexes for sale. So right away you get the same interest rate as if you were buying your own home! In addition, lenders will allow 75% of the current or estimated rental income from the other unit(s), thus giving you more in purchasing power to afford more in buying power.
(Quick Note - Loan Limits adjust based on how many Units and as of 2023)
Say you want to purchase a home in Portland with a max payment of roughly $2,500 a month. What can that afford you in today's market? Based on our examples below, we are going to use FHA Financing to show you what the estimated payment would be with 3.5% down. The three examples below are from actual properties in the city of Portland, Oregon, and allow FHA financing with a 3.5% down payment and current mortgage interest rates for buyers with a 740 credit score. We are going to assume you are willing to occupy the 2-bedroom 1 bath for each property. The monthly payment includes principle, interest, taxes, insurance, and private mortgage insurance with no HOA dues!
- A 2 Bedroom, 1 Bath (2/1) Home For Sale priced at $325,000 with NO HOA
Estimated Monthly Payment - $2,472.47
- A Duplex For Sale with 1/1 and 2/1 units priced at $560,000 with $1,625 Rent from a 1/1
Estimated Monthly Payment (minus rental income) - $2,560.31
- A Triplex For Sale with one 2/1 and two 3/2 units priced at $800,000 with $2,190 Rent from each 3/2 totaling $4,380
Estimated Monthly Payment (minus rental income) - $1,714.01
- A Fourplex For Sale with one 2/1.5 and three 2/1 units priced at $880,000 with $1,530 Rent from 3 units totaling $4,590
Estimated Monthly Payment (minus rental income) - $2,404.95
Your personal situation may be different, and we highly recommend you contact us or our preferred lender to go over your personal financial picture and options. Remember the down payment is based on the price so each loan option will require different amounts. However, if you have the ability, buying a duplex, triplex, or fourplex is an excellent investment and can offer you a lower payment in some cases, like in the example of the Triplex For Sale and Fourplex For Sale. Working with an experienced lender and real estate agent team that communicates well will keep everyone on the same page, so you are successful.
Or find a Duplex, Triplex, or Fourplex For Sale
Where do I start if I want to buy a Duplex, Triplex, or Fourplex?
This may be your next question after seeing how easy it is to purchase a Duplex, Triplex, or Fourplex in the Portland Metro. The first thing you want to do is schedule a time to speak with your real estate team, and I recommend working with our five-star Portland real estate team and preferred lender who are already helping buyers like you accomplish this. Your success is our success and, in the end, you are the one who will make the decision on what path you want to go down to becoming a homeowner.