Rental House, Pulling Cash Back Out.
Looking to buy a rental house. The house is a one-story ranch with one apartment on the ground level and one in the basement. Selling for $155k, needs 10k rehab, fixed up market value about $175k. Upstairs rented out for $900/m, downstairs empty, has rented in past for $700/m.
1) Is there going to be a conformity issue with one of the apartments in the basement? Or will nobody care, in regard to the city or mortgage companies to refinance it?
2) I only want to use my cash temporarily to buy it and fix it up, then get my cash back out to use again, and hold on to this house for the long term. What is the best way to do that? I would have approximately $165k invested and lets say it appraised for $175k. However, being a rental property with 2 apartments I’m thinking that the appraisal isn’t the same as for a one family house? Do they look at CAP or income from the property? Is this considered as commercial loan?
3) My figures roughly show $1600/m in gross rents - minus $1100/m (165k @ 7% for 30 years) - minus $100/m property taxes – minus $100/m in insurance = $300/m positive cash flow?
Should not be considered a commercial lone unless the property is titled as such.
[addsig]
Come on guys? No seasoned investors? I thought these questions would be a no-brainer for most people here.