From Duplex Investment to Homeownership: Dan's Real Estate Story

Welcome to my insightful blog where we dive into the dynamic world of real estate investing and homeownership. I'm Dan, a seasoned mortgage professional and real estate enthusiast, ready to share my personal journey and valuable insights. Today, we're tackling a topic that resonates with many: navigating the complexities of purchasing your first home and transitioning into property investment. Whether you're a recent graduate, a young professional, or anyone stepping into the housing market, this story is for you. Join me as I unfold my experiences from overcoming the housing market collapse of 2008 to smartly acquiring a duplex and evolving into a savvy landlord and homeowner. Get ready for a narrative filled with practical advice, personal anecdotes, and strategic tips for making informed decisions in the ever-changing world of real estate.

Starting Out in Real Estate: Post- College Challenges and Opportunities

Hey, everybody, this is Dan, and today I thought I'd do just a little bit of a story because everybody's going to be purchasing homes at different times, and, you know, every house and everything is, it's a unique situation. And so, after I graduated from college back in 2008 and I got in the business, it wasn't necessarily the, the most fun time in the mortgage business. There was, you know, a big house, housing collapse in 2008, and everybody was worried. So that's kind of where I got into the business. And when I started considering purchasing my first home now, after college, I actually lived with my parents for about six months, decided that that wasn't exactly going to be working long term. And so, I found one of my friends to room up with, and we rented an apartment for just about a year. And during that time, I didn't have too many expenses at that point, too. So, I was able to save up some money and with some help from my parents, too, which, again, this is one of those things where everybody may or may not have some support from family that can help out, but there's programs that we have now that can try and make it more affordable to purchase a home.

The Benefits of Duplex Ownership: A First-Time Homebuyer's Perspective

But at the time, I actually was talked into purchasing a duplex by my family, and I hadn't thought about ever wanting to purchase a duplex before. But in hindsight, it's one of those things that if I can go back and have talked to my old self, I would have definitely told myself, hey, this is a good idea. Looking at a duplex, purchasing a home where one of the sides is being rented out is going to be a great idea for me. So that was the first home that I purchased. And again, it wasn't necessarily considered a good time in the market. And that's always debated. When's a good time? You're not going to know when the best time is. You can listen to different people. And at that time, I just knew that I wanted the house to live in. So, with an FHA loan, also with purchasing a two-unit home, I was able to come up with a three and a half percent down payment that was required at that time, which for a conventional loan requires a little bit higher down payment, but FHA requires a little bit less, even on a two unit. So, I was able to come up with the down payment and then purchase the house. And then I did move in. That was my primary home. I even had my buddy that we were renting together at the apartment move in with me. And so, he was helping pay part of the rent from the new house that I purchased, very similar to what we were doing already, just splitting rent with the apartment. And then I had the other unit, too, which already had renters in on the other side. Now, this house did need some work with living in the property. You're there. So, we had time over the first couple of years, did some work on the property, repainted right away, put new carpets in and things like that. Just typical things that we worked on as we went. So, I'd say I was at the property for about four or five years and had my roommate living with me during that time, and then he moved out. My brother moved in for a little bit, too. And then at some point, I met my wife and we got married and had a kid, and it was just time to find something else. And so, the nice thing about having the duplex is that I was already getting familiarized with having a renter on the one side and doing different things and taking care of the other unit. And so, I kind of got myself into, okay, this is kind of what I can do, and I can manage it. It was just the one unit.

Transitioning from Tenant to Landlord: Lessons in Property Management

And so, when it was time to move out, it would have been nice to pull some of that equity out. But the nice thing, too, is when you're moving out and you're purchasing a new primary home, you can actually still purchase new primary home, take advantage of the lower down payments that a primary home offers you. And so that's what we did. We purchased a new single-family home. We had our first daughter at the time, but I was able to hang on to the duplex, rent it out the other side. And it's just something that I don't think enough people are considering, especially for their first home. With the FHA program, you can put less money towards a down payment. You can either have somebody live with you on the one side helping with your rent, but you have the other unit. You're going to have that other renter that's going to be helping with that mortgage payment. And it definitely eases your way into both homeownership and to being a landlord. A lot of people I talk to say that over time, they love to have an investment property. Well, this is a great way to put yourself into that position, to start having an investment property and getting to learn the different things of both being a homeowner and a landlord at the same time, helping with the mortgage payment and things like that. And it makes it easier once you're ready for a new house to potentially come up with another lower down payment for a primary home. Keep the duplex, rent out, the other unit, and then you have your investment property, and you can keep doing that as well, even if you outgrow that single family home. If you can come up with another down payment for a new home and you're upsizing or whatever it is, changing location, this is a lot of ways that people get into being a property investor.

Real Estate as a Stepping Stone: Building Equity and Investment Opportunities

So, I still just have the one property right now, the duplex that I do have, and I have two renters. I'm able to manage it myself, but you can scale from there. And even if you do end up selling that property after you're ready to move out or after you've outgrown it and you want to pull that equity out, well, great. I still think it's a great thing that it's going to help reduce the amount of monthly payment that you're going to be responsible for with having the tenant and the other unit with the duplex or the multifamily that you're looking to purchase. So that's what I did. I think there's opportunities here in the market right now where that same thing is possible for homeowners. And I'm having these conversations with a lot of my clients right now, and it's things that everybody should be considering. And when you're going into purchasing a home, I don't think enough people are asking that question. And I know inventory is lower, too, but it's just something to set your sights on and get set up with a realtor. And when a property has come out on the market, at least be aware about it and think about it. And it might not be for everybody, but I just want to put this out there so that at least maybe the thought comes into your mind if it wasn't there before. So, if you have any questions, you can contact me here anytime. I appreciate you stopping by and hope you all have a great day.

Dan's Advice for Aspiring Homeowners and Property Investors

Thank you for joining me on this enlightening journey through homeownership and property investment. My experience, from living with parents' post-college to becoming a successful property investor, highlights the potential and possibilities within the real estate market. Whether it's managing a duplex, understanding mortgage nuances, or planning for future investments, my story offers a roadmap for aspiring homeowners and investors. If you're contemplating your first home purchase or considering investment properties, remember: the market is ripe with opportunities, and with the right strategy, you can make a significant impact on your financial future. For more personalized advice or to discuss your real estate aspirations, feel free to reach out to me anytime. Your dream home or investment property is within reach, and I'm here to guide you every step of the way. Stay tuned for more insights and tips on our blog, and here's to your success in the dynamic world of real estate!