Cash to close on a $300k duplex, what am I forgetting besides the down payment

Reserves are money you show, not money anyone takes. The lender wants to see documented funds left over after closing, stated as months of the full payment (principal, interest, taxes, insurance, and any HOA). Nobody escrows it. You keep it.

Rough shape on a $300k duplex you'll live in. Down payment depends entirely on the program, and owner-occupied duplex programs can go quite low, so get that figure from your lender rather than from me. Closing costs commonly land somewhere around 2 to 5 percent of the price, which is $6k to $15k here, and that bucket includes lender fees, title, recording, and any transfer tax, which varies a lot by state (some states charge nothing, some charge over 1 percent). Then prepaids and escrow setup, meaning your first insurance premium plus several months of taxes and insurance deposited into escrow. Then reserves, often a couple of months of payment on a duplex.

The part people leave out is the money after closing. Getting the rented side collecting under your ownership costs something: a lock change, a make-ready if the unit's tired, and the deposit you inherit from the seller, which in most states you must hold under specific rules and return with an accounting. Make sure the deposits actually transfer to you at closing and that the amount is written into the settlement statement. If you also plan to fix anything in your own unit, budget that separately from the deal.

Two numbers on the appraisal side change your worksheet. A 2-4 unit appraisal runs meaningfully more than a single family one, often several hundred dollars more because it includes a rent schedule, and if the file needs a second opinion you pay again. Budget for it as a cash cost you may spend on a deal that never closes.

On reserves, a duplex you occupy usually carries a lighter requirement than a 3-4 unit, and requirements also change if you already own other financed property. Ask your lender for the reserve months on this exact file in writing, because "a couple months" and "six months" is a $10k swing on a $300k purchase and it decides whether you can close at all.

The assumption I'd push on is the rent credit. Underwriting typically uses a fraction of the appraiser's market rent for the unit you don't occupy, not the lease amount. If the tenant is paying $900 on a unit the appraiser calls $1,300, you get credited off the appraiser's number, which helps you qualify and does nothing for your actual cash flow on day one. That gap is where owner-occupant duplex buyers get squeezed: they qualify comfortably and then live with real collections $400 light for a year until the lease turns.

The risk you haven't raised is the exit from owner occupancy. When you move out in two years, your payment stays the same and now you're paying rent or another mortgage somewhere else. Run the property as a straight rental at today's rents before you buy, with vacancy and repairs in, and see whether it still stands on its own.

The escrow setup line is the one that got me when I priced this out. Taxes on the duplexes I've looked at run $4,800 to $6,500 a year, and a few months of that sitting in escrow at closing is real money that doesn't feel like a cost until the wire amount comes through.

@anchor is the lot big enough to matter? Two of the duplexes I've priced sat on parcels that could theoretically take a detached unit later, and the ones that couldn't were the same price. Not a reason to buy, but if you're holding for fifteen years it's a free option to look at while you're already paying for the title work.