How to Buy a Duplex

Do you want to live in a duplex? Here is how to buy one.

Steps

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    Talk to a mortgage broker or banker on how much money you will need to put down and what your payment will be per month. Remember to include vacancies that are typically calculated at 20%.
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    Find a qualified real estate agent. Remember to ask your agent about their experience with investment properties.
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    Have your agent show you what duplex's are selling for in your area and if you want a fixer upper or a turn key property.
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    Talk to a real estate attorney if it is wise to hold your property in a corporation, LLC, or personally.
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    Judge the approximate down payment you will need for a duplex in your area. Either save up for the down payment or find a partner to help purchase the property.
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    Find your duplex and run your numbers. If the property meets your expectations for rate of return make an offer to purchase the property.
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    Wait for a reply from the seller.
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    Offer accepted - contact your real estate attorney to review documents and provide your lender with your purchase paperwork and any other info needed. If the offer is not accepted be patient and make sure your investment will provide your required rate of return.
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    Do an inspection and make sure you do a meth test!
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    Make sure your lender and realtor communicate so your closing happens on time.
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    Go to closing and sign documents.
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    Have your attorney draft rental agreements or go to such as Staples that provide a Landlord documentation kit. Ensure you do credit & background checks on tenants that will be living in your property.

Tips

  • Always check crime statistics for the area this can make or break you and your property
  • Ensure your lender and Realtor have experience in investment properties.
  • Everyone wants to be a real estate investor - make sure your required rate of return works out for you.
  • Patients is key when purchasing property.

Warnings

  • Sometimes banks will not allow you to finance a home in an LLC.
  • Watch out for real estate investment groups that will supply you with deals that are too good to be true.

Article Info

Categories: Real Estate