HOW TO BUY A DUPLEX EVEN WITH NO MONEY DOWN

buying a duplex

Buying a duplex can be a great move for a real estate investor.  One property. Two tenants. Sounds nice, right?

In this post, I’m going to cover how you find duplexes for sale, how to buy a duplex with no money down and discuss some of the advantages and disadvantages of owning a duplex.  So, without further adieu, let’s get started.

What makes a duplex a good investment?

A duplex is a good investment just like any other property can be a good investment. Duplexes will likely appreciate in value over time, there are tax benefits and they can provide monthly cash flow from rental income.

Where do you find duplexes for sale?

Finding duplexes for sale is just like finding single-family homes for sale.  You can visit major real estate sites like Trulia, Zillow or Realtor.com.

FREE Real Estate Investing Checklist.  Instant Access.

You can also have a real estate agent pull listings for you.  I would recommend having a real estate agent help you because it’s completely free since the seller pays all real estate commission. Pretty sweet, huh?

How to finance a duplex

Financing a duplex is just like financing a single-family investment property.  Unlike single-family homes, however, with duplexes, if you’re willing to live in one of the units, you may be able to get 100% financing through several different government-backed loans.  

To get a thorough understanding of the different financing options available when buying a duplex, check out my post on loans for investment properties.

How to buy a duplex with no money down

If you’re looking to do a no money down purchase of a duplex, there are several ways you can do this: owner financing, unsecured personal loans/lines, private money & JV/equity partnerships.

I’m going to quickly highlight each of these because I touch on most of them in depth in this post.

Owner Financing

Owner financing is what it sounds like.  The owner (seller) is financing the deal for you, and you make payments to them just like you would a bank.  

If the owner is financing the deal, then the two of you can work out any arrangement that makes sense including a no money down transaction.  

A real estate agent can help you find duplex listings where the seller is willing to consider owner financing.

Unsecured personal loans/lines

If you’ve got decent credit and stable employment history, you may be able to qualify for an unsecured personal loan or line of credit.  Talk to your bank to see if they offer unsecured loans or lines of credit.  A quick Google search will point you to companies that offer these as well.

Private Money

Private money usually refers to money from friends and family.  Do you know anyone, or even several people, who would be willing to loan you the money for a down payment?

JV/Equity Partners

In a real estate investing context, a JV (joint venture) / equity partnership is when two or more parties come together to purchase real estate.  Do you know anyone who would like to partner with you and bring the down payment to the table in exchange for ownership in the property?

Advantages of buying a duplex

Buying a duplex certainly comes with perks.  Here are a few advantages to consider.

You can live in one side

Being able to live in one side and rent out the other is certainly an advantage to consider.  As a duplex owner, living for free sure does sound nice. Of course, you’d have to live next to your tenant which should also be taken into consideration.

One property.  two rental units

With a duplex, you’ve got multiple tenants in a single property.  That means more cash flow.

Disadvantages of buying a duplex

As someone who owns several duplexes and other multi-family properties, I do recommend you consider buying a duplex.  However, duplexes do come with certain disadvantages. Here are a few.

Tenant disputes

With a duplex, you’ve obviously got your tenants living right next to each other.  Trust me, at some point, those neighbors aren’t going to get along, and you’re going to hear about it.

Handling tenants disputes, even if the disputes aren’t the landlord’s responsibility, are still a time-suck, and, as someone once said, time is money.

Shared utilities

Sometimes duplexes use a single utility meter.  In order for each unit to be billed for its own utilities, each unit needs to have its own meter.  This can be very costly to do, so be sure to inquire about that when researching duplexes to buy.

If you do end up buying a duplex with just a single meter (common with single-family homes that were later converted into duplexes), then, you’ll have to carefully consider a fair rent amount that includes utilities.  

Lawn care

Another disadvantage to owning a duplex is that the landlord is usually responsible for maintaining the yard.  Now you could pay one of your tenants do it, but whether you pay a tenant, someone else or just do it yourself, it’s still an added expense.

Final thoughts

Buying a duplex certainly has its advantages and disadvantages like any other investment. The good thing is, there are plenty of financing opportunities you can take advantage of to acquire a duplex, and there’s even some ways for you to get a duplex with no money down.

About the author

Real Estate Hacks

Recent Posts

Categories