Advise On property Purchase

[Vagif Musayev]

Hi everyone,

I am new to this forum and happy to be a part of the BP family. I currently have a 3 bed bath Condo Under Contract located in downtown Santa Ana. The purchase price is $465k. My goal is to do househacking and to start building a RE portfolio. I have done the calculations and the property does not bring any cash whether I put 5% or 20% down. My plan is to put 5% down and to pay the monthly difference out of pocket and to refinance it in two years when the interest rate drops. In that case the price of rent and the monthly mortgage will even up. I am prepared to pay out of pocket for 2 years given that the property is in a great location and will appreciate over the time. I would like to connect with an experience local investor to brainstorm the deal. Appreciate your attention!

[Dave Kush]

Other people may do this differently, but my advice is that if you aren't willing to own it for 10 years, don't own it for 10 minutes. And I personally learned the hard way that applies equally as much to how you own as it does to what you own. In other words, there's no guarantee that interest rates are going to go down in 2 years, they could even go up. If that's the case and you can continue to float the difference, that's okay, but do you really want to invest all this money into something that's cash flow negative? Is the appreciation going to be strong enough to cover it?

If you buy it right, it won't matter what happens with interest rates later. The numbers have to work right now.  And that's coming from somebody who once bought a property with a plan to refinance it later, but ended up having to sell it short for a fraction of its value.