Posted by Bob Smith on August 30, 2006 at 14:52:27:
Sure, but I’ve found that 1-4 unit buildings are so overpriced (due to that “owner occupant” meme) that there was no net benefit from OO financing, and in fact far worse than if the units were priced like a 10-unit building.
Anyone buy a multi family and live in it? - Posted by Suz Hall
Posted by Suz Hall on August 26, 2006 at 14:16:17:
Hi everyone,
I’m getting divorced, so I have found myself with a chunk of money from the sale of my home. I have always wanted to invest in real estate and be a landlord. I was thinking seriously of buying a multi, maybe three or four units and living in one. Anyone do this before? Any caveats for me? Should I incorporate and act like I’m just another renter?
Any feedback would be much appreciated!
Re: Anyone buy a multi family and live in it? - Posted by Drew
Posted by Drew on August 29, 2006 at 11:45:58:
In general it’s a great idea, with one big caveat: make sure you can properly value and price a small apartment building. I say this because in certain cities (you said you were going to relocate) prices reflect valuations that must have been thought up by people smoking something, IMO. So, learn how to properly project revenues and expenses and then learn how to derive an appropriate purchase price from that.
Good luck!
Drew
Re: Anyone buy a multi family and live in it? - Posted by marc in MA
Posted by marc in MA on August 28, 2006 at 06:51:22:
I live in one unit of a 4-unit house; have renovated it a little at a time, living in the apt I am renovating and renting the other three. At this point the total rents cover the mortgage, taxes and ins plus some cash left over. As others have described doing, I plan to buy another house and repeat this process, turning my existing house into all rental. Disadvantages: probably I would be more comfortable in a SFH – I usually am renovating the apt I live in, which can be a mess, and I’ve had a few noisy tenants in the past. Advantages: I live here for free. Most people need to dedicate 1/4 ~ 1/3 of their income for housing costs, at this point I spend zero and can re-invest the extra cash available.
Re: Anyone buy a multi family and live in it? - Posted by Tim
Posted by Tim on August 27, 2006 at 19:29:18:
I bought a duplex, and moved into the vacant half. It was awesome, the tenant paid 2/3 of my mortgage payment.
I moved three times since then, each time, making my former residence a rental. The biggest advantage is the interest rates. It is much easier to make a property cash-flow with lower rates.
Good luck!
Re: Anyone buy a multi family and live in it? - Posted by Suz Hall
Posted by Suz Hall on August 27, 2006 at 12:39:12:
Thank you all so much for your responses, I think I am really inclined to do that if I can find a good property. I am also thinking of leaving my area, so it would help to know others would help me pay my mortgage if I take a lesser paying job.
Do you think that I should put very little of my money down since it would be owner occupied? We aren’t talking the kings ransom, its 60K, but if I could use that to buy a property I’m’ not going to live in, it may help.
Thanks so much.
Re: Anyone buy a multi family and live in it? - Posted by Frank Chin
Posted by Frank Chin on August 27, 2006 at 04:42:12:
Suz:
That’s how I got started, and so did hundreds of thousands of others in the NYC area since our area is filled with 2 to 4 family homes.
As others have pointed out, the benefit is getting great OO financing. While many on this board mentioned living there among temants and I read of one case posing even as the “assistant property manager”, I myself, my dad, mom in law, neigbors I know, for years and years, had all told our tenants that we are the owners. Nothing nrgative happemed as far as I can recall.
When I started, the wife and I sold a SFH because the mortgage and utlities ate up one salary, we went on and bought a 3 family, below market, and put enough down where we lived in one unit rent free, forced ourselves to live one salary, and saved the other one.
Some years later, we bought an REO, a 2 family, move to and lived it, rented out the original house entirely.
One nice thing about 2 to 4 families is that they don’t require on site management like those of 6 plexes and up, where you’ll need an on site manager.
Frank Chin
Re: Anyone buy a multi family and live in it? - Posted by David Krulac
Posted by David Krulac on August 26, 2006 at 21:54:04:
its an excellent idea IMHO, as you can get an owner occupied mortgage, the lowest rate around for up to 4 units if you live in one.
Re: Anyone buy a multi family and live in it? - Posted by Wes
Posted by Wes on August 26, 2006 at 18:30:29:
The biggest bennefit in doing this is in the financing!
You get Owner Occupied rates and terms…
Significantly better than NOO rates and terms.
Re: Anyone buy a multi family and live in it? - Posted by Max-Va
Posted by Max-Va on August 26, 2006 at 15:35:11:
I did this several years ago. I bought a tri-plex and lived in one unit. I put the title into a LLC. I never told tennants that I owned the building, I was just acting as manager for a discount on my rent. For three years I lived there no tennant ever knew who the owner was, just the LLC name and PO Box.