1st Time Investor - Maybe...

Comments(4)

• 
  dlitedan19th September, 2004

  If I was a bank I would. but I am not a bank so sorry. I know you were probably expecting this comment so here it is, you should ask the bank. Im not trying to be condescending but thats really what you should do. Typically its going to depend on your credit and years on the job and debt to income ratio. your debt to income looks really good but I dont know the other information so i cant venture a guess but if I had to I would say yes, no problem. good luck.

• 
  roberth19th September, 2004

  Your income is high enough to purchase this duplex. If you can go full doc you will be able to get a good rate, if you also give a down payment you will get a great rate and this is what you need to get the property to cash flow. When it cash flows now you have more income and can qualify for a even larger loan.
  
  Good luck,
  Robert

• 
  active_re_investor19th September, 2004

  As has been noted you should speak with a lender to see what they say. Understand that they tend to use yes when sometimes they should have used maybe. Sometimes conditions spring up late in the game which are not appealing.
  
  You did not say anything about the duplex. The price seems high. I hope that the rent is equally high. The income needs to cover the mortgage. Assume that 75% of the rent will be allowed for the mortgage and the remaining 25% is to be used for maintenance and other running costs.
  
  Depending on the property you should budget 40% for running costs. Included in the 40% is professional property management.
  
  John
  
  PS. Well done on how your family finances stack up. Sounds like good debt management and a prudent use of the HELOC. Build a cash reserve for any property as things do happen when you least expect them.
  [addsig]

• 
  monkfish19th September, 2004

  For a $550K property, with $80K down, you're looking at mortgage payments of roughly $3K per month ($470K @ 6.5%).
  
  You add in property taxes and water bills and you're talking a monthly nut of roughly $3300.
  
  I own a few multis and my maintenance expenses typically run anywhere from 10 - 15%. In your case, I'd lean toward the higher end to be safe ($4800/12 mo.=$400).
  
  Bottom line: the total rent on those two units needs to exceed $3700($3000+300+400).
  
  For me, if I wasn't pulling in at least $4K per month in rent (ie. clearing $150 per unit), I'd find another property.
  
  Now I'm assuming this $550K property is being sold retail, ie. on the open market, MLS, listed by a seller's agent.
  
  If my assumption is correct, you'll need to buy wholesale to make money.
  
  Similarly to the metro Boston area of Massachusetts (which is where I live), prices in the New York housing market have far outpaced the rental market. Home prices have skyrocketed, while rents have dipped, making it all but impossible to buy retail and make money.
  
  Moral of the story: if you're intent on buying an income property in New York, San Fran or Boston (especialy a two unit multi) you must buy wholesale.
  
  Therefore, I'd strongly recommend reading up on the subject and coming up with a strategy. As for required reading, I can't think of any wholesaling must reads off the top of my head. But if you search the site or post a question on the subject, you'll find plenty of suggestions.
  [addsig]