"Also, can you refi? 6.5% ouch.."
Thats why I ALWAYS tell people to buy points. Over the long run, it will save you a fortune. It will also drastically increase your profits over time.
Case and point:
Scenario 1:
Base: 200,000
Down: 25% (standard)
Principal remaning: 150,000
Interest: 6.5%
Years: 30
Payment: 948.10
Scenario 2:
Base: 200,000
Down: 25% (standard)
Principal remaning: 150,000
Interest: 6.5%
Years: 30
Points: 1.5 (3,000)((2,000 per 1 point, 1% per point)
Payment: 716
Total savings on monthly: 252
You break even on your points in a year. Over a 5 year hold, you save over 12,000
Remember, ALWAYS...BUY...POINTS.
Now that we've gotten past that point, lets address the root problem here, duplexes.
Alright so with duplexs, they offer a unique alternative to SFM, they allow you to split your risk on your tenant vs mortgage.
With two tenants, you are able to effectively "break" your mortgage + additional costs between two (or more) tenants, which balances your risk load across more area, reducing the properties "overall" risk of default or short sale due to lack of tenancy and/or profit.
The downside, if you lose one of your tenants, you fall into a negative operation cycle unless you bought the property very cheap compared to its $/sqft value.
This occurs often with landlords who own dup/multis, and is often times why I tell people that if you didnt buy the property as a short sale or foreclosure to begin with at a good value, dont invest on it.