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Updated over 5 years ago,
New Investor - Las Vegas NV
Hi BP world!
I'm a new investor. I've bought and sold a few primary residences, so I'm familiar with the process of buying/selling a home, and I've read some books and lurked around the forums a bit. I am looking for my first property with a focus on cash flow positive buy/hold. I've started the process in Las Vegas because I have family nearby who can help manage the property and while I live in the Bay Area, I go out to LV for work often as well. I've been to Henderson/LV quite a bit throughout the years and have a good sense of the different areas. I'm looking in/around UNLV.
I've started trying to assemble my "team" and evaluate properties that come in from my agent's MLS feed. I've looked for a few lenders that are willing to work within my budget and provide a conventional loan.
Here are some information about my situation
Price point: < $80k
Loan: 20% down (to avoid PMI)
Goal: Be cashflow positive after expenses, hoa's, taxes/insurance.
So far, I've noticed that the condo properties I have analyzed, there is one that will squeak out $125-$175/month in cash flow. I have a few questions:
1) Is a $175 a decent cash flow amount at this price point The cap rate on this property I found ($75k) turned out to be about 5.5%, again, not sure if that's a good amount.
2) Lender I found that would lend me such a low mortgage amount is a credit union, and is quoting me closing costs around $4500 of which is a $795(!!) appraisal. The total closing cost amount seems high to me as does the appraisal. I'm not one to split hairs over a couple of hundred of dollars, but this amount seems high, but I also don't know if this is the cost of doing business for a loan amount as low as mine as not all lenders can/will lend at my mortgage amount (or so I'm told).
Any (unbiased) help/advice is much appreciated! Any recommended newbie books/blogs are appreciated too. I just finished Long Distance Real Estate Investing (published by BP and written by David Greene) and want to read/learn more!
Thanks in advance!