This is a very common way to gain experience as a landlord as an owner-occupant real estate investor. Popular investing sites like Bigger Pockets and others mention this stragey many times. Of course you don't need to be an active landlord or contact person when something needs repair. You can hire a property manager or even outsource it to a handyman friend.
When the times comes that you purchase a duplex property and are comfortable overseeing renters you may want to invest in a three or four-unit property or even 5 units and up.
Two advantages of using a conforming loan vs. FHA 2-4 unit financing in non-high balance California counties is the higher limits of $100,000 and up when using a conforming loan and no mortgage insurance.
No more is there a disadvantage to conforming purchase loans on 2-4 unit real estate. The required minimum down payment has dropped to 5-percent down from 15-25% down. However, the lower down payment may look more attractive to the buyer and buyer's agent than an FHA multi-unit loan.
County | Duplex Price | Duplex loan limit | Down Payment | Triplex price | Triplex loan limit | Down Payment | Fourplex Price | Fourplex loan limit | Down Payment |
---|---|---|---|---|---|---|---|---|---|
Sources: FHFA & Fannie Mae. Loan limits are current as of . | |||||||||
L.A., Orange & Bay area | $1,450,000 | $1,472,250 | $72,500 | $1,700,000 | $1,779,525 | $85,000 | $2,100,000 | $2,211,600 | $105,000 |
San Diego | $1,167,000 | $1,288,200 | $58,350 | $1,450,000 | $1,557,150 | $72,500 | $1,753,000 | $1,935,150 | $87,650 |
Inland Empire & other counties | $925,000 | $981,500 | $46,250 | $1,000,000 | $1,186,350 | $50,000 | $1,350,000 | $1,474,400 | $67,500 |
County | Duplex (2 Unit property) | Triplex (3 unit property) | Fourplex (4 unit property) | |||
---|---|---|---|---|---|---|
Sources: Fannie Mae. Posted loan limits are up to date and effective as of Nov. 28, 2023. | ||||||
Alameda | $1,472,250 | $1,779,525 | $2,211,600 | |||
Alpine | $981,500 | $1,186,350 | $1,474,400 | |||
Amador | $981,500 | $1,186,350 | $1,474,400 | |||
Butte | $981,500 | $1,186,350 | $1,474,400 | |||
Calaveras | $981,500 | $1,186,350 | $1,474,400 | |||
Colusa | $981,500 | $1,186,350 | $1,474,400 | |||
Contra Costa | $1,472,250 | $1,779,525 | $2,211,600 | |||
Crescent City | $981,500 | $1,186,350 | $1,474,400 | |||
El Dorado | $981,500 | $1,186,350 | $1,474,400 | |||
Fresno | $981,500 | $1,186,350 | $1,474,400 | |||
Glenn | $981,500 | $1,186,350 | $1,474,400 | |||
Humboldt | $981,500 | $1,186,350 | $1,474,400 | |||
Imperial | $981,500 | $1,186,350 | $1,474,400 | |||
Inyo | $981,500 | $1,186,350 | $1,474,400 | |||
Kern | $981,500 | $1,186,350 | $1,474,400 | |||
Kings | $981,500 | $1,186,350 | $1,474,400 | |||
Lake | $981,500 | $1,186,350 | $1,474,400 | |||
Lassen | $981,500 | $1,186,350 | $1,474,400 | |||
Los Angeles | $1,472,250 | $1,779,525 | $2,211,600 | |||
Madera | $981,500 | $1,186,350 | $1,474,400 | |||
Marin | $1,472,250 | $1,779,525 | $2,211,600 | |||
Mariposa | $981,500 | $1,186,350 | $1,474,400 | |||
Mendocino | $981,500 | $1,186,350 | $1,474,400 | |||
Merced | $981,500 | $1,186,350 | $1,474,400 | |||
Modoc | $981,500 | $1,186,350 | $1,474,400 | |||
Mono | $981,500 | $1,186,350 | $1,474,400 | |||
Monterey | $1,177,750 | $1,423,650 | $1,760,400 | |||
Napa | $1,302,900 | $1,574,900 | $1,957,250 | |||
Nevada | $981,500 | $1,186,350 | $1,474,400 | |||
Orange | $1,472,250 | $1,779,525 | $2,211,600 | |||
Placer | $981,500 | $1,186,350 | $1,474,400 | |||
Plumas | $981,500 | $1,186,350 | $1,474,400 | |||
Riverside | $981,500 | $1,186,350 | $1,474,400 | |||
Sacramento | $977,550 | $1,181,650 | $1,468,500 | |||
San Benito | $1,472,250 | $1,779,525 | $2,211,600 | |||
San Bernardino | $981,500 | $1,186,350 | $1,474,400 | |||
San Diego | $1,288,200 | $1,551,850 | $1,935,150 | |||
San Francisco | $1,472,250 | $1,779,525 | $2,211,600 | |||
San Joaquin | $981,500 | $1,186,350 | $1,474,400 | |||
San Luis Obispo | $1,189,550/td> | $1,437,900 | $1,786,950 | |||
San Mateo | $1,472,250 | $1,779,525 | $2,211,600 | |||
Santa Barbara | $1,073,250 | $1,297,300 | $1,612,250 | |||
Santa Clara | $1,472,250 | $1,779,525 | $2,211,600 | |||
Santa Cruz | $1,472,250 | $1,779,525 | $2,211,600 | |||
Shasta | $981,500 | $1,186,350 | $1,474,400 | |||
Sierra | $981,500 | $1,186,350 | $1,474,400 | |||
Siskiyou | $981,500 | $1,186,350 | $1,474,400 | |||
Solano | $981,500 | $1,186,350 | $1,474,400 | |||
Sonoma | $1,123,300 | $1,357,800 | $1,687,450 | |||
Stanislaus | $981,500 | $1,186,350 | $1,474,400 | |||
Sutter | $981,500 | $1,186,350 | $1,474,400 | |||
Tehama | $981,500 | $1,186,350 | $1,474,400 | |||
Trinity | $981,500 | $1,186,350 | $1,474,400 | |||
Tulare | $981,500 | $1,186,350 | $1,474,400 | |||
Tuolumne | $981,500 | $1,186,350 | $1,474,400 | |||
Ventura | $1,221,950 | $1,477,050 | $1,835,600 | |||
Yolo | $981,500 | $1,186,350 | $1,474,400 | |||
Yuba | $981,500 | $1,186,350 | $1,474,400 |