Profile picture for malik12

BUYING A 4-PLEX OUT OF STATE AS FIRST HOME

Hi

I wanted to know. i work and live in california. i am interested in buying a property in Texas and moving out there. If i dont own a home here in California, Can i purchase a 4-plex in Texas even though i live and work in California, and this would be my first home to buy
  • May 15 2014 - Dallas
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

Answers (3)

Go for it, but don't do it site unseen and absolutely get a home inspection.  Contact a local agent if you haven't already.
  • June 04 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Yes, you can absolutely do this, and I've worked with California buyers in the past buying Texas real estate.  There are a few pearls of wisdom I would offer as both an agent and a real estate investor myself...

1. 1-4 unit properties is considered single family and follows the standard contract/loan/closing processes as a traditional house--it's even just a single loan for up to a 4-plex.  When you go 5+ it jumps into commercial real estate in Texas, which uses different contracts, valuation methods, etc.  As long as you don't go higher than a 4-plex you'll keep things simple.

2. If you are considering a duplex/triplex/fourplex, I would only recommend doing so if you can buy the ENTIRE structure with ALL units.  In other words, you are wise if you own everything on top of a single foundation and under a single roof.  The last thing you want to do is end up in a partnership with another owner when a major system like foundation or roof requires repairs.  Don't buy less than the entire thing so you maintain autonomous control.

3. Understand that even though Texas defines a 4-plex as "single family", many owners (and some agents) will incorrectly advertise it as an apartment or commercial property. Make sure you not only search the home sites but also the commercial ones in your parameters. It happens with duplexes and triplexes, but I've seen it happen more often with 4-plexes.

4.  Assuming you're buying this as an investment, make sure you understand the rental market in the area you're looking to buy.  As an investor myself, I will absolutely NOT buy anything which doesn't cash flow the moment a unit is rented out.

5.  Finally, realize the only people who typically buy 4-plexes are investors.  Yes, there are *some* owner/occupants who want to live in one unit and rent out the other three, but those folks are investors by definition, too. Your exit strategy for selling later on will most likely be to another investor, so keep in mind investors don't typically pay full price for real estate. Whatever your equity capture at acquisition might be, don't assume you'll receive all of this when you sell, as the next investor will expect a little meat on the bone to be left for picking.

Hope this is helpful to you and others!
  • June 04 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Yes.....you can do this.
There are a few tricks to this though.
#1...not so many 4 plexes for sale.
#2...sometimes they ones that are for sale are rented...so you might have to wait to move in, which would then mean you need an investment loan vs a home loan.
#3....I would probably never want to live in an investment property surrounded by tenants.
#4...if this is your first home and first investment property, I think it is probably a lot to bite off in one chunk.  you might do very well, but if you are not on top of things, it can get away from you quickly.
Normally I would suggest buying your own single family first.....save some money, then go by a different investment property.
  • May 15 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.