Is fixing up the house going to be your full-time job?

Unless you have real construction'/remodeling skills (as in your day job is as a general contractor), your first home purchase should not be a duplex to flip. Or a house to flip.

Find something that needs only cosmetic work if you want to make a place "your own". Housing prices are crazy right now.

Be aware that 20,000 wont go very far these days to fix anything much up. 20,000 might do one bathroom, (maybe). Most duplex fixer uppers, even fixing one side, will take many more dollars than that.

#1 will take too long, you’ll end up still there in 10 years, and if the market is still hot when you sell, any profit you make will be neutralized by what you pay for something new. #2 is your best bet ONLY if you can afford to carry both without renters. #3… too risky and too complicated.

Do you think you're going to have all the contractors needed to help fix it up - in a year? I've been waiting 3 months for a contractor to come and spray foam the rim joists in my basement.

Have you thought about just buying a smaller cottage single family home instead of a duplex? One you dont have to put a lot of money into. For a first home, that may be a good way to start.

Now is not a good time to buy. Now is a good time to practice saving 60% of your take home pay. And if you cannot do that, you are not ready to be a homeowner. Much less a homeowner of something needing a couple of hundred K in work immediately. Because you forgot the 0’s on your work estimate. TV is bad faked entertainment. Not a documentary.

A contractor friend says that if you think you can do it yourself, as a test first figure out how to get a few sheets of drywall from the store to your house all by yourself. Most people don't have the truck in the first place.

When I need drywall, I just order from my local lumber yard!

Yeah, but just a couple of sheets, and the delivery charge will be high. A DIY budget remodeler won't want to spend a lot on delivery fees, and may not have a truck. The contractor's point is that wrestling with things like that just isn't that easy for many people. When this guy did my kitchen, he'd be at the lumberyard/HD at 7 AM, before he showed up at my house.

Buying a duplex is a great investment long term but it has to make money. I won’t buy unless 50% of the rent pays the mortgage. Needless to say I’m not buying in the current market. I don’t think rentals make a good flip- better as a buy and hold. Buy one that is livable, rent one side, do cosmetic upgrades to your side and the landscaping/ exterior. Move next door do the same. A couple years later use it as collateral to buy a single family home.

The big question, beyond if you really have a realistic idea of what you'd be getting into (not just in terms of work needed but also dealing with renters), is: Can you survive financially if you can't sell at a profit? or sell in a reasonable time frame? or if the market drastically cools by the time you are ready to sell? Or if your renters do damage or don't pay their rent?

Realize that what you are proposing truly is speculation. It may be less risky than some things, but the risk is still real. You have to think about the worst that could happen and how you would recover from it.

I kind of agree with Verbo- not necessarily 60% of your THP, but do spend a year or three paring your budget to the bone and saving every penny that you can.

Then after saving a decent down payment and a cushion for emergencies, buying the least expensive (in a decent area) small house for yourself, and fixing it up for yourself, might be the most reasonable way to go. Buy under what you think you can afford - there are more expenses to home ownership that many first time buyers anticipate.

Thank you all so much for your advice I honestly needed to read all of that. Any thoughts on condos instead of townhouses? Is there return on investment as good as townhouses?

I think you’re whole presumption of making quick money from real estate is off to begin with. Yes, there are people that buy, flip, and sell houses repeatedly and make a very nice living from doing so and yes there are people that do it just once and make a tidy profit. But you aren’t those people. For you, and for the majority of people real estate is a good basis for generational wealth. In many cases a mortgage is less or very similar to rent. And like a regular savings account your putting a set amount away for 30 years to get a small return. Or even in 10 years you’ll probably be able to sell for more than you paid. But owning also comes with costs, houses are expensive as f*ck to maintain and sometimes you get a portion of that back in the end but usually you don’t. But you’re still building wealth because you’ve hopefully chosen a house and mortgage that is less than rent. And every year as rents increase your mortgage payment decreases a tiny bit. The real wealth building comes when after 30 years and you’ve paid off your house and you die and leave it to someone, they can live in it rent free, thus they can save all of that rent/mortgage money, or sell it and make a nice profit because they didn’t pay into its cost. So yes, buy a house, yes, buy a house that could help pay for itself, like a duplex, but stop thinking it’s a fast way to make a bunch of cash.

If you actually do the math, the maintenance and remodel costs and the interest add up to more than the appreciation in the home. You have to br really be *personally* handy, and contribute sweat equity, plus be lucky in your selection, that you hold on to for a long time, in order to break even on housing.

Mortgages are structured with all the interest on the front end. Paid contractor labor is through the roof. The only flippers who are making bigger figure money in this climate are the unethical ones who put lipstick on a pig with either under the table immigrant labor, or their own substandard efforts and crappy import products.

The costs to remodel to a decent livable standard, with paid licensed and insured labor, take most of the profit out of rapid turn real estate investments. The real profit comes in holding them as rentals, with a guaranteed income. But thats a whole other business venture that requires liquidity and construction skills both. And a good deal of business knowledge.

You'll make more money by taking the money you'd put into a duplex, condo or any other real estate and investing in the market. You can start by investing in Indexed Funds.