Negetive Cash Flow At 100%
I am new to REI. Have been saving for a house but decided to invest in condo that I could rent out and endure my dingy shared rental for a few more years.
A quick question....evaluating real estate here in the Wash DC area I realize that I can get positive cash flow only IF
a. I wait for a tenant wishing to pay good rate....not higher than the area rates.
b. Pay down the mortgage to 70-80% before I can see positive cash flow.
Is this the norm, only having a 70-80% loan on a rental condo??
What it looks like to me is that you are looking at retail deals... At retail, you will probably not cash flow very well, if at all... You might be looking at properties through RealEstate Agents, FSBO, or similar. These are more often than not, retail deals...
To cash flow you have to find more wholesale deals - where the owner is so motivated, that he will sell you the house at 80% Loan to Value from the start...
That's what CREI is all about...
[addsig]
By wholesale do you mean either foreclosure or pre-construction property??
I live in a area with a large floating population where rentals are in great demand and new construction is non existant. How do I find good LTV ratio properties?
Hey,
mattfish already said it, but I will say it a little different: "You make your money on the buy."
Regardless if you are buying a rental or a rehab, you have to make a good deal on the way in.
You can buy a house at 80% because the house is in foreclosure or because the owner is out of state or ten other reasons.
Don't buy a house, just to buy a house. Keep looking and hunting; the good deals are out there.
Ice chunk - Obviously, a major factor in cashflow analysis is your mortgage. What are your payments? What's your rate? What's the principal? There are a number of very strong investor cashflow mortgages out there. Email me - I'd be glad to give you a rundown
I know your frustration, You see investors here getting great deals. But in your area it's not that easy. Same for me in northern CA. the deals are much harder to find. There are investors here in every street corner. Also loan agents are calling people to help them with creative financing. I suggest you look at 100% financing with a cash flow loan like the 6 month libor, with the lowest rate and more stable index your payments will be cut in half. Or if you are at 90% LTV look into the MTA. also a cash flow loan.best of luck :-D