Looking To Buy First Property In Roughly 10 Months

[Account Closed]

Hey Everyone,

To start, I just wanted to list some brief information about what I am planning to do for my first property purchase. I just wanted to get some advice from the members of BP on my plan.

I will have about $25k saved for the downpayment/initial costs of my first property in 10 months. My plan currently is to pursue a duplex, triplex, or quadplex in the Philadelphia area for around $200k-250k. I am planning to do an FHA loan and live in one of the units. I would guess at this price point in Philadelphia I would be looking for a turn key duplex (not sure if I could find a turn key tri or quad for my price range).

Some issues I've encountered when I look at my plan:

I have contacted lenders and initially wanted to do an FHA renovation loan and possibly fix up the property but it seems like it is more hassle then it is worth. I was looking for about $30k in renovation loans, but the fees I was quoted on this were a little bit outrageous ($3k increase in closing costs).

Also... It seems like there are not very many triplex or quadplex properties for sale in Philly, and if they do come up they are scooped up almost immediately. 

I definitely want to pursue a buy and hold multi-family property for my first purchase. Do any other members have any advice that they could give pertaining to my current plan? I am open to considering anything.

Thanks!

-Sean

[Joshua D.]

@Account Closed

Well I would challenge you to take a good hard look at the distressed property again.  Just because it needs repairs, will be more of a hassle, and will cost an extra 3k in closing is no reason to dismiss.  As I look back on our 4 buy and hold deals, we have made a majority of our money from buying the place others did not want.  The equity we have made dwarfs any income we have made 10 to 1. And we have not done bad in cash flow.  The high equity in turn allows us to buy more properties. 

Keep looking and you can land a GREAT deal, but be cautious, cuz bad and good deals look strongly simialar at times.