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Thread: Single family first, or Multi?

  1. #1

    Single family first, or Multi?

    My wife and I are relocating to a different state and are in a position to purchase a primary residence and an investment property, the question is which order is most beneficial? Or does it really matter?

    We are considering buying a duplex and living in one side for a year or until we find the right house to buy as our primary long-term residence as one option. The other option would be the reverse; buy a single family/primary home while looking to buy a duplex to rent out as an income property.

    Aside from what appears to be a greater chance at finding a duplex suitable to us for a year vs. the right house at this time, (though one never knows when the "perfect house may come om the market), is there a significant financial advantage, or disadvantage in the order of purchase? Interest rates? Tax rates?

    Our credit rating and down payment will afford us the best APR.



  2. #2
    The rate and terms will be better if you buy the investment first. Try to get the best rate so you don't have to refinance it in the future as an investment property. You'll be able to purchase with a lower downpayment too. The disadvantage is, it will hurt your DTI calculate when trying to purchase your new primary house for at least two years. IF your income qualifies you for both mortgages, then it is a non issue



  3. #3
    If they are receiving more in rent then they are paying on their mortgage wouldn't it help their DTI?



  4. #4
    The terms for an investment property are worse than for a primary residence. If you buy the single family first you will have to put 25% down on the duplex and get a higher rate. If buy the duplex you could live there for a year(length of time depends on the mortgage) put down from 3.5-whatever get the lower Owner occupied rate and then buy a single family and get the owner occupied rate again.



  5. #5
    most will want a "history" shown with tax return. I say most because there will always be exceptions, either CU local portfolio loans, etc.



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