Fort Lowell Realty & Property Management Phoenix

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Plexus! Duplex, Triplex, four-plex. If you’ve ever considered investing, you’ve probably heard about these properties. Plexes are a pretty unique property type with very distinct advantages. In this video I’m going to give you the run down as to why so many people have sought these out as an owner-occupied investment.


The biggest factors with being an owner occupant of a plexus is involvement, cash flow, and financing


Type Of Involvement:
A lot of people who invest in plexes are newer or first-time investors. It’s newer investors usually because plexus afford newer investors the ability to learn about real estate without it being too overbearing, it has enticing financing opportunities, and real cash flow coming in every month! Also, many new investors tend to take the plex route because it’s a great way to transition into buying a single family home due to the benefits of the extra equity an investor can gain with a plex property. There’ll be more on that in the financing section.

Now all these positives of buying and living in a pleas do come at a price. Owning and occupying a plex can be a real time commitment and has the potential to forfeit a quiet living space due to the fact that you’re essentially making your home into a form of business. Tenants may feel its okay to knock on your door at any hour due to the fact that you’re right next door.

If you’re close to a college it may be easier to rent out while at the same time renting the property at a premium.

Cash Flow:
A huge plus to a plex property is active cash-flow. You get checks every month! Woooo! And if you do it right you could have the entire monthly mortgage payment subsidized by your rent, essentially giving you a place to live with little out-of-pocket expense, while at the same time building equity!

A great plus to a plex is that it tends to make more money per unit because the units are more private. Rent tends to be cheaper by the room for single family homes because of the aspect of the shared living space. Also, plexus tend to be larger than a common apartment, which gives a plexus more homey feel.


Type of involvement, cash flow…it’s all important to the financing of the plex property.

Now for financing, plexus offer some of the same great tax deductions that are offered for any investment property. What’s important about this is that these deductions will not be available to you if you are planning on buying slash occupying a single family home and want to rent out each bedroom.

You can usually buy a more expensive plex property than you could a single family home because you can leverage the cash flow to get a bigger loan. By being able to obtain a more expensive property this should, if all goes right, enable you to build more equity.

Also, plexus have much more lenient requirements for obtaining a loan. Plexus are not subject to commercial loans, which usually require a much larger down payment that usually ranges around 20%.

Financing the loan of a plexus on the other hand can be as low as 3.5% if you get an FHA loan. And it’s pretty common to have it be around 5% down even with a conventional loan.

Your credit score does not have to be nearly as good if you acquire the FHA loan however. Your score can be as low as 580, however you will usually find that most banks will still only go as low as around 620. But this score is still very reachable for many people.

However, keep in mind if you want to get an FHA loan you have to get mortgage insurance for the first few years. This will usually run you around 1.35%

However, another great feature of plexus is that this mortgage insurance only applies to the unit that the owner, you, are actually occupying. Your tenants can pay renters insurance for their unit and you won’t pay the mortgage insurance on that rental unit.

You can also deduct the depreciation of the rental units from your taxes for the same reasons.

Pretty great right? You can’t do that with a single family home.

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Fort Lowell Realty and Property Management
3020 East Camelback road
Phoenix, Arizona