Just Getting Started - Need Advice On Two Opportunities
Actually, it was only one opportunity. I goofed in the title thread.
Background: My credit is good and I have approximately $30K to use for investment and another $15K for reserves. Only debt right now is my home.
I am searching for a property to produce income $300-$500 a month for a few years and then unload or keep.
Opportunity:
Sec 8 Housing with occupant living in it. Built in 1981, 1700 sq ft Comparable Home Value $91,000 Will sell for $84,000.
Section 8 pays $850/month and tenant pays $50/month plus utilities, gas, and water. Deposit is $500.
Expected Rent: $900/month
Expeditures: $230 month (includes prop taxes and lawn care, HOA)
Mortgage pymt: $264.06
5 Yr ARM Interest Only Loan for 80% of asking price or $65000. I will put up the remaining $20000 as the down payment.
Rate: 4.875%, APR: 6.238%
Assuming the scheduled independent inspection goes well, this sounds like a good deal for me to NET $400 a month.
What does everyone else think?
Did I get the right type of loan?
What kind of additional expenses can I expect that I am overlooking?
This is my first attempt at REI so any help would be appreciated.
[ Edited by AGGIEROB on Date 08/03/2005 ]
cauch, your in the right place. The members here will help you make a right decision and if it turn out to be slightly sour, they will help you make the right decisions to fix it. Spend some time in here.
(im gonna catch some slack for this) but JUST DO IT. Go out in your backyard and start looking at homes, values, and also flip open the local paper to see what rent is for those zones. I realize your intentions arent to buy and hold but it gives you a fall back plan. (ie: cant roll the home over for the money you want). Whatever it takes to get you going. Your first deal isnt going to be as perfect as you are planning for it to be right now. So pick a good deal and get your feet wet. Who known you may love mr. Trunmp or hate it and decide to open a business in primary field,.
Get a new first mortgage on the new property.
I sure hope it burst. I know of houses in my area that are 100% track homes that are up for sell for 1 million+. To me that is ridiculous. If you told me that you live in a million dollar house, I would expect your home to be a semi-custom home on an acre or more. These houses are 4 bedroom track homes. I couldn’t imagine if I were to buy a house now that is way over priced and for it to go down in equity in one or two years, I would be nervous.
well i think salary will have to start catching up. we did see an increase last year, but not nearly enough to counteract. regardless it will have to slow down when rates raise, whenever that happens, bagfulls of foreclosures should be able to swoop up because of no interest neg amortization loans
Quote:
On 2005-08-03 22:04, bargain76 wrote:
My CPA ragged me about my flat real estate investments a few years ago. Then he lost $700,000.00 in the stock market.
btw...this could be a relatively small drop...depends upon how big his portfolio was...if he started at $10 million, this is a drop in the bucket...now if he started at $1.5 million, it is not such a happy story for him.
also, it sounds like he had a bunch of tech stocks if he started with less than $3 million and lost $700,000...sectors (including technology) are all a part of the market too...they go in and out of favor just like asset classes in general. and it sounds like he had very little, if any, bond exposure.
perhaps a little consolation to him...the market (S&P 500) did rebound and do 23% in 2003 and 11% last year...but if he lost more than 17%, he would still theoretically be down from March of 2000 when things started to fall.
i would have to say that each market is different.
in my current market there are 2 fams in the ghetto that were selling for 120k 2-3 years ago and are now selling for 220k. these properties would never cash flow and that tells me that my market is overvalued. does that mean that it will crash? who knows but i doubt it will continue to increase in the way it has. my area is primarily low-med income individuals employeed by two of the largest casinos in the world and phizer. these are mostly low income jobs except for the high paid executives that make up for a very small portion of the market. when the average home price is hovering around 200k and these people are only making 15-30k a year then something bad is bound to happen.
its a great market for selling quickly. thats if you can actually find a deal that has equity in it. most of the people in foreclosure in my area who do have equity are able to sell before the foreclosure and still profit. thats whats tuff about it. on the other hand im not scared if the market does crash because thats when you buy and hold and i can just imagine the deals that could be had if that does happen.
how low??
Sure, find deals, use hard money
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Go to that landlord forum and ask what type of properties they buy, then go find them. I think John Locke has a resource on bird dogging on this site
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