Owner Occupied Duplex.. crunching numbers

So I recently got qualified through a couple of lenders for a home loan for my first SFH. Years ago I had a dream of purchasing a duplex, owner Occuping one side, and renting the other half, managed via a property management company.

I have to double check, because I’m reading some conflicting information, but I have an email from a lender claiming they’re willing to do 5% down conventional on a multi-unit.

Now, if this is the case and they can allow me to put 5% down, would my total mortgage being 33% of my debt to income be too much, considering there’s factors like higher maintence.. or is this spot on?

I understand that I should be able to afford the property without a renter.. but realistically, from what I read, I can probably assume occupancy 75% of the time. Even without a renters, I can cover it. It’s tight, but i can afford it. But if I account for occupancy at 75% of time, it would be cheaper for me than a single family home per month, yet I’m gaining significantly more equity. The area I will be purchasing in (Grand Rapids, MI area) seems to have an issue with more demand, than supply for rentals right now. I doubt vacancy would be a concern.

Pros:

-Lower cost for my “rent”

-Can rent both sides out for income once I move

-Potential recurring income

-Building equity faster

-Path towards owning more properties and therefore wealth

Cons:

-Place can remain vacant for a long time

-Tenants can destroy my shit

-Tenants can refuse to pay rent whole occupying

-Takes time and effort

-Property management costs

-If rent dips, not living there wouldn’t make financal sense.

So.. like usual in life, I feel like I have to be overlooking something. What am I missing?

Another question I have is, it it actually feasible to live in a duplex and the other tenant not be aware you’re the owner? Or is this perhaps unethical (or illegal?)

My lender recommended me talk to someone she knows who is a bit more experienced in this regard, and I likely will.. but I always appreciate Reddits very objective thoughts.

submitted by /u/flyonlewall
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So I recently got qualified through a couple of lenders for a home loan for my first SFH. Years ago I had a dream of purchasing a duplex, owner Occuping one side, and renting the other half, managed via a property management company. I have to double check, because I’m reading some conflicting information, but I have an email from a lender claiming they’re willing to do 5% down conventional on a multi-unit. Now, if this is the case and they can allow me to put 5% down, would my total mortgage being 33% of my debt to income be too much, considering there’s factors like higher maintence.. or is this spot on? I understand that I should be able to afford the property without a renter.. but realistically, from what I read, I can probably assume occupancy 75% of the time. Even without a renters, I can cover it. It’s tight, but i can afford it. But if I account for occupancy at 75% of time, it would be cheaper for me than a single family home per month, yet I’m gaining significantly more equity. The area I will be purchasing in (Grand Rapids, MI area) seems to have an issue with more demand, than supply for rentals right now. I doubt vacancy would be a concern. Pros: -Lower cost for my “rent” -Can rent both sides out for income once I move -Potential recurring income -Building equity faster -Path towards owning more properties and therefore wealth Cons: -Place can remain vacant for a long time -Tenants can destroy my shit -Tenants can refuse to pay rent whole occupying -Takes time and effort -Property management costs -If rent dips, not living there wouldn’t make financal sense. So.. like usual in life, I feel like I have to be overlooking something. What am I missing? Another question I have is, it it actually feasible to live in a duplex and the other tenant not be aware you’re the owner? Or is this perhaps unethical (or illegal?) My lender recommended me talk to someone she knows who is a bit more experienced in this regard, and I likely will.. but I always appreciate Reddits very objective thoughts. submitted by /u/flyonlewall [link] [comments]

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