Possible First Investment

[Jim Patrick]

Been a while since I first introduced myself but I've been busy working 2 jobs and studying for my real estate license. Wanted to get some advice on my gameplan for my first investment and use a potential property as an example to see if my thought process is on track.

For my first investment I plan to purchase a home as an owner-occupant as I currently rent. 203k loans are starting to be used more and I was actually talking to a Countrywide loan consultant yesterday and they even give additional closing assistance if it is one of their properties, I wonder if other banks are doing this too. I'm using this because it requires very little cash out of pocket, I can ge downpayment and closing cost assistance through various programs and I can roll all rehab costs into the loan including 6 months of payments while it is being rehabbed.

I live in South Arlington, VA and home prices are high here. Prices seem to have leveled out but there are many deals to be had especially foreclosures and short sales in rough shape. I only gross about $5k a month so wouldn't be able to afford much which is why multi-units interest me.

This leads me to my example property:

Its a short sale for $369,900 in an up and coming neighborhood right by a park and down the street from the local high school. It is a triplex that is all separately metered, 2 1br/1b units and one 3br/2ba units. It is over 100 hundred years old and from just the outside (viewing it Friday) it probably needs to be completely rehabbed.

What I feel the most realistic estimate would be due to location and after being rehabbed is $900 per 1br and $2000 for 3br for total of $3800. Taxes are about $400 per month. I would live in a 1br unit so after taxes and cost of that unit I would be netting about $2500 month. Obviously insurance and maintenance need to be taken int account as well. I plan to live here a few years to get the tax benefits and it won't need much maintenance after rehab hopefully.

So with say, $2000 a month from rents going towards the mortgage, and my personal budget of $1100 month, how much could I pay for this home including repairs? How much of the rents can be credited towards income? 75%?

Sorry thats such a long-winded post, just want to make sure I'm at least pointed in the right direction. I appreciate your help and feedback.

Jim