Why your First Investment Property Should Be A Duplex

Why your First Investment Property Should Be A Duplex

When I accidentally started investing in rental properties, I was 26 years old. I’ve owned my own business since I was 23, and as a business owner, as you progress it’s natural to start considering Investment ideas. When you work for yourself you don’t get the luxury of a pension or retirement plan, at the end of the day you will only have what you were able to save up.

Even though I eventually stumbled onto long term real estate investing, had I know what I know today, I would have done things differently. Right after high school, if I had invested in a duplex, I could have easily been retired by now.

What is a duplex?what is a duplex

A duplex is a home comprised of two separate living quarters. In general, they have separate kitchens, bathrooms, and no common living areas with the other unit. Think of them as tiny apartment complexes with only two units. In most cases, each unit has separate utility meters so that each side only pays for what the amount of utilities they use.  This type of property is ideal for investors because you can earn twice the rent with one property.




Duplexes are great investments for young, first-time investors for a lot of reasons. Some of the pros are being that you can pay off your first property by renting out one of the units, and the other benefit is that you can potentially live rent free, to save money by owning a multi-family home. As long as you make sure that you purchase at a price in which one unit’s rent will cover the mortgage, and you know how to find a good tenant, your biggest living expense, shelter, is covered.

Duplexes are better for young investors from a living standpoint because. The units are usually smaller and can make a good home before you start a family. Once you start getting married and having kids, you will likely want to get a bigger house, with more privacy.

It’s important for young investors, to remember that even though your tenant is your neighbor, you shouldn’t build a friendship with them. If you find this difficult or awkward, i suggest at the very least, acting as if you are just a tenant as well. One of the top landlord commandments is not renting to or making friends with tenants. If tenants are your friends, in times when they may encounter financial issues, they will play the friend card” and things can get awkward quickly.

You guys know I’m an advocate of paying off houses as soon as possible. And because your mortgage will be covered, your ability to save should be drastically increAsed. I recommend setting aside what you would normally pay for rent, until you have enough to pay off the property. Once your pay off your mortgage, your other units rent goes straight to your pocket.

Sometimes, I find that duplexes can be over priced. Everyone has their own methods but for me to be even consider purchasing a duplex, it would have to be cheaper than I could find, two single family homes in the same area. For example, if I know 2 bedroom rentals average around $60k a piece, I wouldn’t want to spend over $110K for a duplex In that same area. This way it’s like getting a discount on 2 rental properties at the same time, while generating a higher ROI.

Eventually, you will want to move. The good thing about having a duplex, is that you can move out, rent your old unit out and start earning two rent payments at once. Now when you buy your next home, you have the luxury of being 2 rentals In the game.

Even though your expenses will be covered, I recommend to continue working  full time, to cover unforeseen repairs, and speed up paying off your investment.

In addition to duplexes, which are two unit structures, you can also find other multi-unit properties as well. Triplexes are 3 unit buildings, and quadplexes are buildings with 4 units. Anything over 5 units is officially considered an apartment complex, and different tax laws apply.

While most duplexes are side by side units, some will have an upstairs/downstairs layout. One thing that is important to me when finding a potential duplex, is making sure that the homes have separate meters for utilities. There have been times when I’ve come across duplexes with combined utilities, and it sounds like a hassle to try to decide which tenants used, how much energy every month. In cases where only the water is combined, the landlord usually covers the water bill. For me personally, I prefer my tenants to take care of all of their own expenses.

A single duplex is probably not going to provide the income, you need to retire just yet, however by investing young, and continuing to grow your rental portfolio, once you obtain and pay off enough rental properties, you will be generating enough passive income to live comfortably.

What was your first rental property? Was your first rental property a duplex?

Let me know in the comments section below.



what is passive income

I was lucky, I don’t know why, but for some reason I picked up on the concept of passive income at an early age. At 9 years old I used to consistently beat my parents at Monopoly. At 9, I was just happy to be better at something then the grown ups, but I was subtle learning an important lesson. Id giggle as each time they landed on one of my properties I was slowly taking their money one faux hundred dollar bill at a time, and my pile of money would grow strong until the game ended. Today I know this, was a rough concept of generating passive income.

What Is Passive Income?

Passive income is payment you recieve on a consistent basis, with very little to effort required to maintain it. Contrary to active income, in which you trade your time for money, passive, or residual income is created generally by investing in assets, or putting in a lot of time up front that produce a monthly income.



Why is passive income important?

Passive income is important because, it is not directly related to the time that you spend. You make educated investments that create a steady income stream. Because you are not spending time, passive income investments are a good way to plan for retirement. By gaining more and more income producing assets, you are in direct control of growing your wealth.

Some Passive Income Examples:

I have dabbled in a few of these, but I’ve been able to create the majority of my income with rental properties, as you recall with house #1 and house #3. Rental properties have allowed me to achieve financial independence, and I am currently growing this business.  I am a big believer in diversification, I’ve always been an advocate of diversification, and no one way is better than the other. I recommend that people experiment on a small scale to see which methods interest you the most

Passive income is not FREE money. All forms of passive income require the following:

  • An initial financial investment – An examples of up front financial investments would be purchasing dividend producing stocks.
  • An initial time investment – An example of up front time investment would be. Creating a hit song and receiving residuals, or royalties on a monthly basis.

What Makes Passive income so powerful?

What makes passive income so attractive, is that once you lay a foundation, the residual income get easier build. With traditional active income there is a limit to how much time you can dedicate to working. With 24 hours in day and a general work shift being 8 hours of your day, it’s virtually impossible to find time for more then a second job, not to mention how brutal of a lifestyle that is. With passive income, you are not bound by the time restraint, and letting your money work for you. As long as you are generating enough income you can create as many passive income streams as you like.

The best thing about passive income, is when you don’t have to be at work, you get to actually live life. The majority of us are stuck in a position, where we need to work to keep things in order in our life. Jobs determine: when you go to sleep, when you wake up, what you eat, how you dress, and what you drive. Passive income allows you to spend your days doing what’s most important.



How To  Generate Passive Income In The Beginning?

  • In the beginning you need active income – Unless you come from a wealthy family, you will need capital to build your passive income empire. Theres no way to shortcut this part, you need to have a primary means of income to get started.
  • Be Frugal – Think of this as the time of sacrifice, this may seem unreasonable but, stop spending so much money. Try to find economic ways of entertaining yourself. Cut down on food budgets, try not to eat out too much and cook at home. Here are some yummy ideas of what frugal people eat! 
  • Create a plan. A big part of creating passive income is having a strategy. Have answers and procedures for every conceivable scenario.
  • Determine how much passive income you need – Figure out how much residual income you need to make to live your life comfortably.
  • Set realistic short term financial goals – It’s ALWAYS great to shoot for the stars, however creating short term goals that can be reasonably achieved. An example of a good short term goal is saving up for a down payment on a rental property,

Achieving financial freedom is not easy to achieve, but by setting goals, saving, and frugal living you can begin on your journey to residual income. After laying this foundation, by the time you are generating enough income to live off of, you will have definitely earned it.

25 side hustles that make money

26 Side Hustles That Make Money

What’s a Side Hustle?A side hustle is something you do to earn money outside a traditional job.- Nick Loper





25 side hustlesIf you want to start building passive income the first the you’re going need is a regular income. 

I like to think of  myself as a self-sufficient hustler. Sometimes jobs are not a good fit for everyone.

Sometimes jobs don’t pay enough, and a second job would be too stressful, that’s where having a hustlers mentality comes in.

Having a side hustle is helpful to save up for larger investments that will generate passive income

Here are 25 ideas to help get some capital into your bank account.

 

 

  1. Resell discarded items – If you have a pickup truck, and you see an old sofa, or nice coffee table, out on the curb for the trash, take it. These items can be cleaned up and listed for sale on sites like craigslist or offerup, You can make money by steam cleaning old sofas, or polishing old wood dressers and selling them. A lot of times people throw stuff out thats in good condition just because they need the space. Avoid anything heavily stained and always clean these items thoroughly to restore them back to a decent condition.
  2.  Stalking Craigslist Free Section – This is one of those side hustle that is no secret to many looking to earn some money so you will need to be fast. People often list free items on Craigslist, many of which may have value, but the owner doesn’t want to go through the hassle of meeting potential buyers, or haggling so they give it away free. I’ve seen everything from furniture to vehicles in this section. The goal here is to snag items that can you can sell for profit. Because you don’t have to spend any money to get these items, everything you sell is 100% profit.
  3.  CashcrateCashcrate is a paid survey site online. Survey sites like Cashcrate generally offer 2 ways to get paid. Member sign up and can either complete surveys for designated dollar amounts, or refer others using their referral link. I signed up for cash crate a LONGGGGGG time ago. Like 2007ish, when I was trying to find out different ways to make money online. I started off doing the surveys, and I went through a phase where I was doing youtube videos and putting my referral link all over the place. I didn’t know much about internet marketing back then, but apparently, a few people are still watching my youtube videos because I have many active referrals. The good thing about cashcrate is that not only do you receive a percentage of your referrals earnings, but you also get a smaller percentage of your referrals, referrals. I consistently get checks from cashcrate to this day. It’s always a financial bonus to open the mailbox to a check from something you weren’t expecting. I would actually classify this is passive income because I literally had done nothing to maintain this for well over 8 years! If you want to sign up with cash crate click here
  4.  Bird dog houses – This is one of my favorites. Have you ever driven by a busy intersection and noticed a bandit sign with the words “We UGLY Buy Houses…”? Well, these people are probably  Bird dogging the act of finding real estate for a good price, placing it under contract, and then selling the contract for a profit. This is done by using an assignment contract. Using bandit signs is a great way to find people who want to sell their houses. The real profit to be made is when you come across homes that are in dire need of repairs, or updates because this will give you leverage to hassle. After negotiating a price you place the house under the assignment contract, this is an assignable contract to buy the house. This means two things, that you have an agreement to buy the home at a specific amount, and that you can sell this contract to someone else interested in buying that house, at the same price. This is why its important to make sure the price you negotiated will be attractive to investors after you’ve added your contract fee. In my area, I find bird doggers are usually earning around 3-5 thousand dollars per assignment.
  5.  Painting – If you’ve got attention to detail post an ad on craigslist, throw some special prices on it, buy some good quality brushes and go to work. I don’t recommend trying this if you are not particularly a neat person. Offer friends and relatives a free paint job, to  see if this is something you can do well. Always remember to tape off all trim, remove wall plates, and keep the floor covered with a good quality tarp.
  6.  Drive For Uber or UberEATS – Uber driving is a great way to make some extra money. Unless you’ve been living under a rock, you know uber is like a taxi but a heck of a lot more reliable and cheaper. I use uber all the time when I travel or go to the bar. There’s a certain freedom about not having to drive places that I love. If you have not taken a ride with uber please download it and use this promo code UBER4FreePromo, this will give you a free ride for up to $10.  Uber  an especially good way to make consistent extra money if you have an eco-friendly car. They pay drivers to download the uber partner app, and take calls from people who need rides. Its like that old arcade game Crazy Taxi but in real life.  People always ask me what its like driving for uber. It gave me a different look at my city, I got to meet a lot of really cool people, and explore areas of the city that I didn’t even know existed. Because of it, I’ve gotten paid to discover all new restaurants and other hidden gems in my city. For more info on Uber check out the uber experiment. An Expansion  of the Ubers company is UberEATS, you can also make money delivering food to customers of local restaurants. To learn more about UberEATS click here!   If you would like an Uber promo code for a free ride click here!
  7. Rent your house on AirbnbAirbnb is a website that allows you to either rent rooms in your home or your entire home to guest looking to travel in your area. This can be extremely profitable. When i first started my airbnb investment experience, I opened my rental properties to many guests in my area. This is an extremely lucrative way to make money. Click here to see how I made $11,604 in 5 months renting my house on Airbnb or  Click here to rent your home on airbnb.
  8.  Tutoring services – Do you have a talent, something that others might want to learn that you could teach, if so tutoring might be a viable source of income. Do research to see what others in your niche are charging and be competitive. Depending on what type of tutoring you’re doing. Try to go to places where people in need of your service would gather and post ads on the bulletin board. For example if your good at fitness. Advertise at local gyms. If you’re a trigonometry wiz, advertise on community college, and university bulletin boards.
  9. Start a cleaning service – If you are one of those people who finds it therapeutic to clean, start a cleaning service. Cleaning supplies are cheap, advertise on craigslist, as well as local bulletins in your community. Try to get cooperate contracts as they will make your business more valuable . Always clean very thoroughly you will be able to get more clientele through word of mouth as well if you are good at what you do.
  10.  Dog walker/pet sitter – Are you a pet lover? You can get paid as a pet sitter or dog walker. You should really love animals if you are considering working with them. You can get clientele by advertising in the online classifieds or sign up for services such as rover.com. Rover.com is a website that connects dog sitters and walkers, with people who need the services.
  11.  Mobile detailing – Because the supplies needed are very cheap, and you are mobile, you will have very low overhead with this side hustle. Advertise your services on local classifieds and bulletin boards at local businesses. Offer competitive on pricing and offer discounts for multiple vehicles. Pass out flyers in crowded parking lots at the mall. Mobile detailers generally charge $35 for a basic cleaning, and there is an upcharge for deeper cleanings.
  12.  Drop shipping – Drop shipping is when you sell/advertise  a product, and once you get a sale, you purchase that item from a 3rd party vendor and have it shipped directly to your customer. The benefit of drop shipping is there is usually little investment because you never have to purchase physical stock. In fact, the only thing you will need to make money is a website and a marketing plan. There are many companies that drop ship online, such as Doba. The best practice is to find a niche that is not over saturated. Saturated niches will be nearly impossible to get ranked for as, pioneers in that particular niche, will make it difficult for you to make any money.
  13.  Be somebody’s friend. That’s right you can literally get paid to be a friend. If your personable and you think you could lease out your services as a friend, try signing up at rentafriend.com. You can literally get paid to be a good friend.
  14.  Give advice – Do you know a lot about a lot of things? Become an “expert” on  Clarity.fm. With Clarity, you make money by giving advice to people with questions in your field of expertise. “Experts” generally make around $50 per question.
  15.  Blogging – I only recommend blogging if you love what you talk about, this is a long-term way to make money. As you build your audience, you can eventually begin to make money through a bunch of different avenues. If you use products that you truly believe in you can make money with Amazons Affiliate program. You can also make money with Google Adsense. Adsense pays you to place ads on your website or blog, and as they get impressions or clicks, Adsense registers this and issues you a payment. You can also sale ad space on your site directly. You set the price, and have more control over the details. Bloggers with large followings like Carol Tice, can earn upwards of $5000 a month from blogging. To learn how to start your own blog click here.
  16.  Collect scrap metal – If you have a pickup truck you can drive around and collect the scrap metal and scrap it. People are always listing free scraps for people to come get for free. Develop a name for yourself in the scrapping niche, you can build relationships with people that come across scrap metal frequently, like rehabbers and flippers.
  17.  Get a roommate! Ok, so disclaimer: This isn’t so much a way to make money, well I guess it could be considered depending on how you look at this. I have a friend named Amy that lives in New York, she’s financing a nice luxury apartment. Her monthly mortgage payment is $2300 and she has 4 bedrooms. She rents the 3 smaller but decent sized bedrooms out to her friends for $900 a month each. Amy grosses $2700 a month. Every month her complete mortgage payment is covered and she has $400 left over to pay bills. Of course having a room mate isn’t for everyone, but if you can bare it this is a good way to cancel out the largest part of your living expense while paying off your mortgage.
  18.  Craigslist labor section – Craigslist is a great place for find people in need of labor services. On craigslist in the section under gigs, you can find people looking for temporary help. If you are handy there will be a lot of options for you here. If you are not handy, there are also gigs where they may just need something simple, such as needing a lawn cut.
  19.  Junk removal – This is another thing that you will be able to find gigs on craigslist. Many house flippers, and , those who go through remodels, are left with literally tons of debris. If you have access to a pickup truck and preferably a trailer, you can get paid to haul this trash off to the city dump. Contact your local dump and find out what dumping fees are. Keep this number in mind when bidding jobs. always make sure that you charge enough to cover dumping fees, your gas mileage, and most importantly your time.
  20.  Bitcoin Mining – You know what bitcoin is right?…..kinda…..a teeny bit? Well, bitcoin is a cryptocurrency that has gained popularity recently and starting to be accepted as a form a currency at an increasing pace. At the time of this post 1 bitcoin is worth just a little over $500 USD. So how do you get bitcoins? Well, you can mine them  by becoming a node,  back in the day, you could mine bitcoins with nothing but your computer and an internet connection. As time progresses bitcoins become progressively harder to mine, eventually stand alone computer did not have enough processing powers to satisfy its increasing demands. The need for more power led to the birth of dedicated bitcoin miners. Bitcoin miners use ASIC technology to help  mine bitcoins, but use a lot of energy. Some investors build bitcoin mining farms, to generate large amounts of bitcoins every day. The major drawback to bitcoin mining is that it grows increasingly harder every year to generate bitcoins, so you will always need to continuously keep updating your mining equipment. In the early days of bitcoin mining, you only needed a desktop computer, and an internet connection to mine bitcoins, now dedicated equipment such as the Antminer s9 is required to keep up with the ever-evolving algorithms.
  21.  Cut grass – This is usually seasonal depending on where you live, but people will always need their grass cut. You can get a used lawn mower off craigslist for under $100 to start your business. Start off in your neighborhood, ask neighbors with noticeably long grass if they need cuts. Offer to schedule them once a month. Print flyers and pass them out to near by neighbors. Be professional and be on time, and you will make money.
  22.  Buy Return Merchandise Pallets – When companies like Walmart, Target, K-mart, and many other stores accept returns, many times the items have slight blemishes or warped packaging, these items can no longer be sold on the shelf. In turn, the big box store needs to liquidate these items to recoup as much loss as possible. These items are sold to liquidation companies in insane quantities. Companies  like Viatrading redistribute the store returns into large boxes on pallets and package for resell for one wholesale price. I used to buy these pallets when I lived in Nashville. They usually averaged $300 and came in a box that was almost as tall as me. The only thing about purchasing these returns, is the liquidation centers don’t allow you to see what’s inside the pallet, they don’t want buyers cherry picking pallets.  Once we purchased a pallet, we would empty the box, go through everything, and separate the items into price ranges. The electronics were sold on eBay, and craigslist. and the low priced items would be sold by having garage sales. We would at least double our investment on each pallet http://www.viatrading.com
  23. Storage Auction – When storage unit owners, stop paying, the storage companies need to get their space back. They do this by auctioning off the contents of the storage unit. I’ve been to a few of these and they are competitive. The key to making money here is being able to tell what things are worth really fast. Like the pallet returns, you are generally not allowed to look inside these units, you must make your decisions based on what you can see standing about 3 feet away. Sometimes you get lucky and find valuable items that were not visible. These items can be sold on craigslist, the best way to make money with this is by making sure you don’t overbid on lots.
  24. Become a virtual assistant – If you are good at administrative work, can type, and work well with spreadsheets you may want to consider freelancing as a virtual assistant. Virtual assistants perform clerical work for clients, mainly data entry related work. You can find clients by listing your services on websites like upwork.com
  25.  Amazon Flex – Ever wonder how amazon gets packages out with lightning speed? Amazon Flex workers are the backbone of this delivery system. You apply through the website, submit a background check, then once hired, you can login from your smart phone and start delivering products from the Amazon fulfillment center in your area to its customers. Flex workers average $18-$25 an hour and set their own schedule.
  26. Become a Pornstar from home – If you aren’t shy and would like to make some decent money from home. You can  make some dcent money performing as a single our duo pornstar on a cam modeling site. . While many may turn their nose up at this  unorthodox method, cam models can earn an extra $100 – $10K a month from home . These sites work off a token system, viewers come into your chat room and tip tokens, that can be later converted to cash.  Because these websites are so popular there is always a large flow of traffic and plenty of money to be made.. If you are worried about you identity you can always wear mask to cover up your face and lets your inner porno star fee. You can sign up to be a cam model as long as you are over the age of 18. To see what its like to be a porno star online you can sign up here.