Why you should get a duplex first

The problems in the Bay Area housing market affect everyone.

If you want to own a house, you feel marginalized by the “skyrocket’ed” prices. If you don’t own, you feel isolated and out of touch with the supposed “healthy” state of the economy. It may surprise you to know that many current homeowners don’t want to sell because they just don’t want to have to look for something else now.

If you’re interested in getting into the real estate game now, you need every trick in the book.

Two of these tricks make a duplex your smartest first move.

First, understand that lenders give higher interest rates on investment property than owner-occupied property. By purchasing a 2-4 unit building and living in one of the units for a period, you are a “owner-occupant’ and given the lower interest rate. But, you are also collecting rent as if it was an investment property. So, you get the best of both worlds.

Second, there are loans out there where you can also pay as little as 3.5% down for a 2-4 unit building. Duplexes are often the cheapest, so they are usual the easiest to start.

Duplexes let you take advantage of both of these random criteria that lots of people outside of real estate don’t know about.