The majority of millionaires have acquired their wealth through real estate investing. Buying residential multi-family as a first-time buyer is the easiest way to get started. Getting into a property with two or more people can reduce your overall risk.

Can a duplex have 2 Owners? The short answer is yes, up to four people can sign on one mortgage loan, however, banks dislike underwriting loans with more than four borrowers. All of the same mortgage guidelines still apply, all borrowers must submit credit scores, income information, and employment history, for assessment in the underwriting process.

Rent/mortgage is one of the largest expenses in our lives, and a duplex is one way to free you of paying rent, find out more about duplexes below:

Buying A Property With A Partner

Working as a team when it comes to purchasing real estate is always a benefit; not only does it increase your overfall buying power, it allows both parties to have input and brings different strengths to the table. In today’s market families are purchasing single-family homes and residential multi-family together; because it increases their buying power and the underwriting process is not as stringent because of the increased income from all of the signees.

There are many different types of real-estate investing partnerships, there formed to protect the owners/investors/shareholders, etc:

The type of partnership chosen is important because the last thing as an investor you would want to worry about is being personally liable for an issue that arises from your property.

Buying a property with a friend, family member or business partner is a great way to build; the most important aspect is to make sure you’re protected.

What Makes A Property A Duplex?

Imagine finding your dream home, the open floor layout, backsplash in the kitchen, large windows filling the home with light every morning. Now imagine having two of those for the price of on the same piece of land.

That’s a duplex it’s classified as two individual homes, separate living dwellings, on one parcel of land. I’m not the only one who likes to see those two-for-one deals when you walk into a store. Well, I look at duplexes in the same light, two homes, two front yards, two backyards all for the price of one home.

Granite the home sizes are often smaller and there may several spaces that may be shared, you can’t beat the fact that your mortgage would be paid for by your tenants.

According to National Multifamily Housing Council One in five families live in residential multifamily housing.

The way a duplex is designed varies from top to bottom, side by side. and detached, but the principle still remains the same. Each tenant has their own living quarters, separate addresses, and they’re usually very similar in size.

What makes a duplex a great first property?

The hardest part I faced when buying a property was feeling alone, although my family was there for guidance when it came to the finances I was on my own. That very reason is why duplexes are so powerful because both you and your tenant become a team. The burden of the mortgage being all on one person is now shared between you, and the tenant.

Residential real-estate is an avenue for the common man to become a millionaire.

What Is A Twin Home?

Were all familiar with condos, townhomes, and co-ops, but twin homes may come off a little foreign to most. To be honest, I’ve seen homes that look exactly alike placed side by side, but I wasn’t sure exactly what they were called until I did some research.

A twin home is often mistaking for a duplex because they look identical in design. Oftentimes both homes sit side by side and appear to be on the same lot.

Both homes actually are on separate parcels and different owners occupy the dwellings, they are responsible for repairs and upgrades to the homes. And you don’t need the owner’s approval to make repairs or upgrades to the home unless you live in a homeowners association with community requirements.

Since most twin homes are connected and one wall is shared, it benefits both you and the other owner if improvements made to the home add value, and compliment the other home.

Advantages

Twin homes post a great deal of reasons why they’re a great addition to your portfolio; now we all love a good deal, and in fact, twin homes are lower in cost in comparison to homes. Because of the simple home design IE: shared wall, shared driveway, and shared backyard.

To many, this might come as a disadvantage but the lower cost reduces the overall expenses normally spent on a home. That means lower property taxes, lower mortgage, and lower homeowners insurance costs. Also, most twin homes aren’t located in a Home Owners Association, which gives the owner the freedom to be the artist of their property. So, no one will stop you if you decide to paint your home candy apple green, but you might leave your neighbor a bit upset.

In all seriousness, having the ability to change your landscaping layout, choose the color of your home, and pick your roof shingle color, is what owning a home is all about. Having the ability to design your palace in any matter that you desire is important.

Other advantages not mentioned above:

• Lower Heating and cooling expenses
• Easier financing oppurtunites
• Shared extrerior exspenses with your neighbor

Disadvantages

Although owning a twin home has many advantages it also has a few drawbacks that should be considered before purchasing.

When you buy a home one of the first thoughts that come to mind is “my sanctuary and place of peace and quietness”. And due to the shared wall design of a twin home, it creates an environment where noise can be heard from the other home. So, the amount of noise will depend entirely on your neighbors.

Other disadvantages not mentioned above:

• Lower resale value
• Owner is responsible for exterior maintenance
• Home design reduces privacy

Can You Split A Duplex Into Two Seperate Properties

Due to the housing shortage in Los Angeles, CA; residential multifamily homeowners are beginning to separate their properties and sell them off in pieces. Imagine you being a world-renowned baker of pies and instead of selling the entire pie; you sell them by the slice.

Well, essentially that’s what duplex, triplex, and quadplex owners are beginning to do. Because the property values of high appreciation areas have increased exponentially. Separating a duplex into two separate lot parcels, and selling them as separate homes can generate a higher return. Then if you were just selling the duplex as a duplex.

Investors often think the money made on a property is made on the exit plan, to a degree that is actually true. To add to that statement when purchasing a property that’s where the bulk of your money will be made.

Sounds confusing, Yes I know! Let me explain, one of the first steps in searching for an investment property is the analysis portion; determining if the investment has positive cash flow, and is located in an area within the path of progress (developing), etc. Or let’s say you decide to play the appreciation strategy buy hold and re-sell several years later to reap the equity the property has gained.

The game you play does not matter, what matters is being able to have a vision of what you plan to do with the property down the line during the analysis stages. Being patient in carrying out the proper vetting of the investment, and creating a business plan will help you achieve higher profit returns during the life of your investment.

Therefore if you choose to split a duplex and sell the units individually, when your searching for a property ensure the units meet all city and state guidelines and determine if the parcel is zoned properly for the project.

In summary

The law of the first deal is the notion of the first property that you acquire is a stepping stone to the next investment that is pursued. By nature, real estate has a higher barrier to entry than other investments vehicles, but choosing a duplex as your first property will give you the upper hand.

Whether you choose to buy a duplex with a partner, flip or buy and hold, there are all great paths beginning your real estate journey.