REAL Solutions LLC · Sioux Falls, South Dakota
There is more between renting forever and buying a starter house than most people are ever shown.
Licensed since 2004.
Start with a callThis page is not a pitch. It is the short version of a conversation I have had many times, written down so you can read it without talking to anybody.
Every renter in this town gets the same letter once a year, and it has never once said the number is going down.
A rent renews. A loan amortizes. Your rent is a price someone else resets annually. A fixed mortgage payment has a principal and interest portion that does not reset — taxes and insurance still move, so the whole payment is not frozen, but the largest piece of it stops being somebody else's decision.
That is not an argument that buying is always better. Sometimes it is not. It is an argument that the two are not the same kind of expense, and most people compare them as if they were.
Most people hear that someone helps cover your housing cost and picture a roommate. For a lot of people that is an immediate no — and fairly. You have done the roommate years. You would like a kitchen.
A tenant is not a roommate. A tenant has their own door, their own unit, their own lease, and their own life. The money arrives the same way. The living situation could not be more different.
That is the whole idea behind buying a building with two to four units and living in one of them. You are an owner-occupant, so you buy it as a home rather than as an investment. The other units are occupied by people who are not in your hallway.
If that is the part you want to understand properly, it has its own page — including the rule that quietly kills these deals two weeks before closing.
The most common reason a renter never looks at a small building is that they assume they cannot afford one. It costs more than a starter house, so the math seems obviously worse.
What is rarely explained is that the building's own rents are part of how it is evaluated. It is not judged purely against your paycheck the way a single-family home is. That does not mean everyone qualifies, and it does not mean every building works — plenty do not. It means the question is a different question than you assumed, and it is worth asking before you rule it out.
The specifics belong with a lender, and I will put you in front of one who actually does these.
A lot of people believe the order is fixed: buy a place to live, get settled, and start investing later when there is money left over.
The first purchase can be both. That is the part that is almost never said out loud, and it is the reason this is worth ten minutes of your attention rather than none.
You should hear the unglamorous version from somebody, so let it be me.
This does not cash flow on day one. Early on, the other units cover a share of your housing cost — not all of it, and not with money left over. Before you call anything profit, take out vacancy, turnover, maintenance, the repair nobody planned for, and your own time answering the phone at nine on a Sunday.
Cash flow shows up later, with more units and with numbers that actually work. Anybody telling a first-time buyer otherwise is selling something.
Carrying a large share of your own housing cost from the start is still an extraordinary outcome. It is just not the one the internet promises.
Nobody sat me down and explained that this was even an option. I did not miss it because someone steered me wrong. I missed it because I did not know to ask.
That is the entire reason this page exists. I would rather you hear it now and decide it is not for you than find out about it twenty years late.
It depends on how long you plan to stay, what you have saved, and what a specific building's numbers look like. Anyone who answers that question without knowing those three things is guessing. What is worth knowing is that renting and buying a house are not the only two answers.
Yes. Owner-occupied two-to-four unit purchases are open to first-time buyers. Being new is not usually the obstacle — the particular building's arithmetic is. The details are here.
Yes. Owner-occupied financing is written on the understanding that you will live in one of the units, and your lender will state the term on your loan. It is not a side door into a pure rental.
Not necessarily — property management is a real option and plenty of owners use it. But you should decide that on purpose rather than discover it, because it changes the numbers.
Then you are not ready, and that is a real answer. Knowing the option exists is worth something even if you use it in three years instead of this one.
A short call, no cost, no pressure. Tell me what you are paying now and what you are trying to do, and I will tell you plainly whether any of this fits — including if the honest answer is not yet.
Wondering why the number keeps climbing in the first place? Here is what actually drives a rent increase.
REAL Solutions LLC · Steven J. Buysman, Responsible Broker
Licensed since 2004 · Sioux Falls, South Dakota