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Complete Guide for Financing Your First Duplex Denver Investment Property

June 13, 2018

Owning a duplex Denver investment property can be an excellent step for your financial future. However, it is not a decision to take lightly. Upon doing research and speaking with property management experts, you will be ready for this next step in your life. Investment properties are handled differently but can be an excellent financial decision for your future. Take the time to become more knowledgeable about investment properties as you work to purchasing your first one.

FHA Loans

It is possible to use a Federal Housing Administration (FHA) loan to help you get started with investment properties. This only qualifies if you are a first-time homebuyer and you plan to live on one side of the duplex. This will allow you to borrow with a lower down payment rate of 3.5 percent. Make sure to work with a lender to ensure you do not break any of the rules if you choose to go this route for your duplex.

Fix and Flip

Are you not looking to rent out for long, but flip a property? You can consider a “fix and flip” loan. These are loans that help you handle any fixes for your property. While you will not need this for your first duplex, it is good to keep this in mind in case your first rental is successful, and you become ready to explore other opportunities.

Conventional Loans

If you are not planning to live in an investment rental, a conventional loan may be your go-to. On average, lenders may require you to put 20 to 30 percent of the home’s value down. It is also important to know you will not be able to use potential income from the renter right away as a source of your own income. In some cases, if your current mortgage has equity, there is a possibility you can take advantage of that to purchase a duplex. These are all conversations to have with your lender.

203K Loans

You may find the perfect rental opportunity… that needs some TLC. This is where a 203K loan will help, which gives you the flexibility to make necessary improvements to a space. For new investors with little money to put down, in some cases, you can put as little as three and a half percent down for a 203K loan if you plan on living on one side of the duplex. If not, you may have to put up to 20 percent down.

As you work through deciding how you will finance your first duplex, be sure to review Bigger Pockets’ real estate financing. Upon speaking with a lender, you can find the right opportunity for you. Being new to the real estate investment industry, connecting with a property manager will make the process seamless. Be sure to contact DenCO Property Management and Sales for any assistance you need with your duplex. From paperwork to maintenance, we have you covered. Contact DenCO Property Management and Sales today to see how we can help you with this new, exciting chapter of your life.