Duplex Depot - Duplex and Multi-Family Real Estate

Will a Seattle area duplex property appreciate more than a condo?

October 18th, 2009 Jacquie Cliff - Real Estate Broker

With prices in the Seattle area low many first time home buyers are coming back to the market to find a property.  The question is whether it is better to buy a heavily discounted condo or buy a duplex property and take advantage of having tenants help pay part of the mortgage.

We all know that over the last two years condo prices have taken a significant hit, while the prices of duplexes have remained more stable.  This would mean to me that as the economy recovers, we will see stronger increases in the condo prices vs. the price of duplex properties.

Does this mean that buying a duplex property instead of a condo is not a good idea?  No, in fact the reduced prices on duplexes makes it a great time to buy.  A quick search of the MLS reveals a good number of duplex properties across King and Snohomish counties all priced in the $200,000 – $300,000 range.  So you can buy more property and still have about the same monthly payment or even have it be a little less depending on your loan!

This does mean more work, but it still gives you a home with a yard instead of a box in the sky, and long term it means that you have control of an income producing property for a very small amount down in comparison to conventional multi-family loans.  In addition to that, but because you now own a rental property, you are in business for yourself which means you can deduct many more things on your taxes.  Find a good CPA or Tax Attorney and ask them what it can do for you!

Would I recommend a duplex over a condo based on straight appreciation?  No, but appreciation is only one factor in evaluating if a property is a good deal.  Too many people got short sighted on that during the boom, and forgot that equity building and cash flow are important too.  For those willing to do a little extra work, I would definitely recommend a duplex over a condo as the property to purchase for a first time home.

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Everett Duplex for Sale – $309,950

September 16th, 2009 Jacquie Cliff - Real Estate Broker

Everett Duplex with Attached Garages

Looking for a duplex real estate investment in the Everett area?  How about this property on 63rd St SE! 

Each unit has 2 bedrooms and one bath, and as a bonus each one has two covered and two uncovered parking spaces.  All the appliances including the washers and dryers stay and being just a few blocks to Everett Golf & Country Club this duplex is definitely one to look at!

PDF Flyer for This Everett Duplex

Give me a call at 425-773-3149 if you would like to take a look a this duplex or any other investment property in the Seattle area!

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What is the difference between multifamily and duplex properties?

August 17th, 2009 Jacquie Cliff - Real Estate Broker

What is the difference between multi-family, duplex and 4-plex properties?  I have been asked this before and it does seem logical that they should all be lumped in to the same group.  After all a duplex does house multiple families so it seems logical that it would be a multi-family property.  But that is not how things are classified.

The convention is in lending that multi-family properties are those with more than 5 units and as such are considered commercial properties.  Properties with less than 6 units are classified as residential properties and loaned on just like you would a single family home.  The difference being on how they are valued.

DUPLEX & 4-PLEX = COMPARABLES APPROACH
MUTLI-FAMILY PROPERTIES = NOI & CAP RATE VALUATIONS

Doesn’t make much sense does it when they generally bought as income producing properties does it?  The one caveat to this is that because two and four unit properties are counted as residential homes, you can purchase them with FHA loans and live in one of the units.  As I have discussed before, buying a duplex or 4-plex as a first home is a great way to get started in real estate investing.

There are some other tricks that can be applied to rental properties because of the differences in how they are valued as well.  If you are in the Seattle area and thinking of investing in a rental property or twenty call me and we can discuss some of your options!

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Will a duplex appreciate faster than a condo?

June 5th, 2009 Jacquie Cliff - Real Estate Broker

While researching articles, I came across an old Wall Street Journal article which tried to answer the question ‘Will a duplex appreciate faster than a condo?‘ From my perspective, whether a duplex will appreciate faster than a condominium is not the key issue.

Obviously if you are comparing a duplex to a condo you are going to be occupying one of the units in the duplex.  What becomes important then, is that you are deferring part of your total mortgage payment by renting out the other half of the duplex.  Let’s look at a real world example.

In Everett Washington right now, the average condo price is right around $250,000.  With 10% down that puts your payment at around $1350 per month.  Looking at new duplex properties in Everett, you could probably find one for around $320,000.  Again with 10% down, your payment will come out to be roughly $1726.  So for a little less than $400 a month more, you get a whole extra unit to rent out.

If you live in one half of the duplex, and rent the other out for $1000 per month that would bring your share of the mortgage payment down under $750 a month!  That is cheaper than rent!  The really great part is that because you are going to live in one of the units, you can get regular financing and FHA loans to purchase your property.  This means that you can get into property with as little as 3.5% down.  Plus there is still talk that FHA will allow buyers to use their $8,000 tax credit towards their down payment.  If this is the case, you could be in a duplex for under $5,000 out of pocket.  That is just downright amazing!

I definitely encourage anyone that is wanting to purchase a condo, but that is interested in owning multifamily property, to seriously consider a duplex or even 4-plex to live in! 

If you are ready to make the jump, and purchase a duplex to live in please give me a call at 425-773-3149.  I can definitely help you track down a property that is right for you!

Posted in Duplex, Everett | 1 Comment »

Plenty of duplex properties in Snohomish county!

May 31st, 2009 Jacquie Cliff - Real Estate Broker

Time for a market update on duplex properties in Snohomish county.  This month 20 new duplexes came on the market and right now there are over 100 up for sale.  Over 100 duplex properties for sale in Snohomish county alone?  That is a bunch!

As of this morning the average duplex in Snohomish County is priced at $383,457 and has been on the market 177 days.  That is a long time to be sitting!  On the low end are the Everett fixer duplex properties, the cheapest is a meager $185,000.  On the other end of the scare are the overpriced new or nearly new duplex properties topping out at around $730,000.  I see no way those are going to cash flow with any reasonable sort of down payment.

In contrast, the sold listings tell the story of what duplex properties investors are actually buying.  In the last 3 months a mere 12 Snohomish county duplex properties have sold.  When it comes to what they are selling for, the average duplex sale price is $327,879, and none of those were over $480,000. 

Looking at these numbers, I just wonder how many owners are bleeding, sitting on duplex properties that do not have positive cash flow.  Personally if I were wanting to start investing in small multifamily properties, I would make sure that I had my financing in order, a solid down payment, and then start making offers on some of these properties that are close to being priced right, but have been on the market too long. 

If you are ready to buy or sell a duplex in Snohomish or Northern King County give me a call at 425-773-3149.  I would like to sit down and discuss the market conditions and how they relate your needs and situation!

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Duplex and Multi-Family Property Update for Everett & Lynnwood

February 21st, 2009 Jacquie Cliff - Real Estate Broker

Winter is quickly fading and I expect we will see more properties coming onto the market as the grass starts to green up.  Here is a quick update on the state of the duplex and multi-family market in Everett and Lynnwood using the MLS information.

Everett Multi-Family Property Statistics

The sold figures for 3-5 unit multi-family properties in Everett were skewed slightly by the fact that there have only been 2 sold in the past 90 days, one of which was a tri-plex that closed at $199,900.  I suspect that it needed some work.  Listings that say ‘Needs TLC’ and ‘Buyer to waive form 17′ are usually in pretty rough shape or there are serious worries. 

Lynnwood Multi-Family Property Statistics

Prices in Lynnwood for duplex and multi-family properties is higher as you can see, with the age and condition of several of the Everett properties pulling the prices down.  One other thing to note is that there are 42 active duplex properties in Everett, and only 8 currently on the market in Lynnwood.

What I am seeing is that for investors with backing, there are some good deals to be made.  The one duplex sale that did happen in the last 90 days was only on the market 19 days and dropped from an initial price of $425,000 to a final selling price of $370,000.  At that price it most likely won’t break even if it is financed, unless of course there was a sizeable down payment.

If you are shopping in this area for a duplex or small multi-family property, my suggestion is to have your financing ready, and make some offers!  The market isn’t moving very fast, which means sellers need to compete if they want to sell.

When you are ready to get out there and start making some offers, give me a call at 425-773-3149 or send me an email at Jacquie@JacquieCliff.com and I will try not to have too good of a time beating up the sellers (proverbially) for you.  Of course if you are looking in areas other than Lynnwood and Everett for multi-family investments, I can take care of you there as well.  If you need and example, just check out my road trip to Aberdeen to look at a bunch of multi-family properties (which had positive cash flow!)

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New Duplex Properties for 2009

January 14th, 2009 Jacquie Cliff - Real Estate Broker

We have officially made it into the new year, and with it I expect to see a good number of new duplex and multifamily listings on the market in Snohomish and King County’s.  For real estate investors this is a good thing, because with everyone’s credit lines stretched to the max, many investment property owners are looking to unload properties at a discount.  Right now in Snohomish County there are just over 100 duplex properties for sale, and with only 14 duplex properties sold since September 2008, the competition is tough.

To be sure there is disparity between the listing price for duplex properties in Snohomish County and what they are actually selling for, and undoubtedly there are several builders out there sitting on brand-new duplexes that cost more build than they are worth.  For ambitious real estate investors, this of course means opportunity.  If you are interested in getting started in real estate investing in Snohomish or King County, call me at 425-773-3149 and set up an appointment to go over your real estate investing goals and what needs to be done for you to achieve them.

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Investing in Duplex and Other Multi-Family Real Estate Beats the Stock Market!

January 1st, 2009 Jacquie Cliff - Real Estate Broker

For those of you that are still on the fence as to whether real estate is a good investment or not, I have a fantastic article for you written by Scott Snyder, a real estate agent in North Carolina.    Scott sat down and did the math on if he had invested $33,000 in a duplex property 10 years ago, and compared it to if he had invested that same money in the Dow Jones for the same period.  His results were AMAZING!

What I learned was shocking to say the least. To arrive at the value for the duplex investment I made a few VERY conservative assumptions. First, 20% down payment, 7% interest rate, 3% long term appreciation(Raleigh has seen more). Additionally, I assumed only a 3% cash return from the duplex.

The original $33K if placed in the DJIA would be worth $32.9K today, yes, LESS than the original investment. But the same $33K investment in a duplex with the above assumptions would be worth $119.2K+ or $86.3K MORE than the same $33K invested in the stock market. I realize the real estate market in some areas has seen a tremendous drop over the last couple years, so I am not suggesting that the duplex option is like a money market account. However, even in the areas that have experienced a tremendous drop keep in mind that they also saw insane and unsustainable gains that place their average return at well over 3% appreciation.
Read Scott’s Full Article on Comparing Buying a Duplex to the Stock Market

What does this teach us about investing for today?  I think the answer is simple:

 Buy and hold Duplex, Triplex and other Multi-Family investment property!

In ten years from now are you going to look back on things and wish you had put money into real estate investments that have positive cash flows, or be looking at your retirement with confidence because you have a portfolio of partially paid off, cash flowing investments that will continue to provide for you for as long as you need them?  The choice is yours!

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Duplex conversions make deals possible!

December 23rd, 2008 Jacquie Cliff - Real Estate Broker

Today while researching articles I came across an old blog post on how converting a single family residence into a duplex can be a great investment opportunity.  The reality is even with home prices down in many places, such as here in the Seattle metro area, the rents that can be generated from single-family home aren’t enough to justify purchasing them as a rental properties.  However if you can find a larger home with the right layout it can be possible to split it into two living units and rent it out as a duplex.  Generally speaking the rents for each half of the duplex is only slightly lower than what you can get for the property as a single-family home.  The result of this is that with a small investment to modify the property you can often times take a property with numbers that don’t work and turn it into one that has a positive cash flow.

Of course, there are always hurdles to overcome in converting a single-family home into a duplex.  Of primary concern is whether the property is suitable for dividing into duplex and what the local zoning and permit processes are.  I never said converting a single-family home into a duplex was easy!  When you start considering converting a single-family home into a duplex be sure that you have a competent real estate agent and remodeling contractor by your side.  This will help you make sure you get into the property for the correct price and have a solid estimate of what it will cost to convert the property.

If you are in the greater Seattle area and would like to sit down and talk with me about duplex properties and real estate investing, please send me an e-mail at Jacquie@JacquieCliff.com or give me a call at 425-773-3149.  If you’re outside the Seattle area and looking for a great real estate agent to help you with purchasing your duplex properties, I can  put you in touch with a hard-working and knowledgeable real estate agent in your area.

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Buying a Duplex

September 7th, 2008 Jacquie Cliff - Real Estate Broker

Why would someone buy a duplex property?  I firmly believe that for those people entrepreneurial enough, it is a great way to not only purchase a home, but invest in a rental property as well.  Buying a duplex has several advantages over a standard single family home.

1. Duplex properties are less expensive per square foot than single family homes.
2. Buying a duplex means you can generate rental income to offset your house payment
   
3. The maintenance costs are lower for one duplex vs. two single family properties
4. Duplex homes, only share one common wall, unlike condos or town homes.

Buying a duplex does have some risk, but most of it can be mitigated by good planning.  Looking ahead and investigating insurance rates, rental prices, and planning for needed repairs and maintenance will greatly reduce the risk of loss over the long term.  I always advise my clients that are purchasing duplex or other rental properties to take a portion of the rent and establish a ‘slush fund’ for any emergency repairs that may come up.

Buying a duplex is a great way to purchase a first home, so if you are considering making the jump into owning your own home, look at your local market conditions, talk with your real estate agent and give buying a duplex some serious thought!

Jacquie Cliff – The Amazon Negotiator
Let me lead you through the Real Estate Jungle!
Real Estate Agent, Loan Officer and Real Estate Investor serving:
Lynnwood, Bothell, Mill Creek, Seattle, Bellevue, Marysville, Mountlake Terrace, Edmonds, Everett, Snohomish, Kirkland and the surrounding areas!

Call me with any of your real estate questions at 425-773-3149 or email me at Jacquie@jacquiecliff.com anytime!

Copyright © 2008 By Jacqueline A. Cliff, All Rights Reserved.
“Buying a Duplex”

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