Thinking about buying a first home? Think again.

Instead of thinking about buying a home, consider buying a multifamily home. As I write this article, there are 18 duplexes and triplexes for sale in Jackson County.

I ran an example on a duplex and the payment would be $2663 (with taxes and insurance), and had one of the units rented for $1700. This was with a minimum down first-time buyer program. This is only an example, there are so many variables when calculating rate and payment. Call for specifics.

And let’s say for argument’s sake that real estate appreciation is at 4%.

4% on a duplex price of 420,000 is $16,800 per year while the 4% appreciation on 300,000 is 12,000 per year.

There are several loan programs that can be used to purchase a duplex or triplex.

For first-time buyers they can get a conventional loan with as little as 5% down, both first-time and subsequent buyers can use FHA with 3.5% down and VA is zero down.

And consider this approach, instead of having a low payment because of the rental income, make a slightly higher payment and turn the 30-year loan into a 20 or 15-year loan – saving a ton on interest.

This property you will want to hold onto. Down the road, it could be a great source of income. If you find you don’t want to keep it, you can explore a 1031 tax-free exchange when buying another rental.

Things to know when considering buying a multi-unit home include:

You should have a reserve fund to cover any vacancies.

The lenders will only use 75% of the gross rent to help with qualifying.

You should research if you want to self-manage or have a management company do this.

You should read the Oregon landlord-tenant law and know your rights and the rights of a renter.

When buying as your primary residence you should plan to occupy the home for a year or so. The intent is that it is your primary residence. Using this approach does not prohibit you from buying a single-family home down the road.

Let’s run the numbers and see if buying a multiplex is right for you.

Dave Porter (NMLS # 483876; is the Sales Manager for loanDepot in Southern Oregon. He is licensed to offer loans in OR, WA, ID, CA and AZ. You can reach him at or 541-708-4020.

This information is not intended to be an indication of loan qualification, loan approval or commitment to lend. Loans are subject to credit and property approval. Other limitations apply. Rates, terms and availability of programs are subject to change without notice. State disclaimer:, LLC, NMLS ID 174457. Licensed by the OR Division of Finance and Corporate Securities, Mortgage Lending ML-4972. | WA: Licensed by the WA State Department of Financial Institutions, Consumer Loan Company CL-174457. | ID | CA: Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act CRMLA 4131040.
Show More

Related Articles

Back to top button