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Updated over 13 years ago,

User Stats

6
Posts
1
Votes
Todd Rumfola
  • Involved In Real Estate
  • East Islip, NY
1
Votes |
6
Posts

1st Possible Deal Or Not? Need Advice

Todd Rumfola
  • Involved In Real Estate
  • East Islip, NY
Posted

Hi everyone...first I want to thank all the contributors to this forum, what a wealth of information. So here's the situation, basically another investor has a 2 family house that he owns and has been renting for the past 18yrs. We were trying to come up with a way to get me in the house with no money out of pocket. Here are the numbers:

Estimated Market value $289,000
Annual Taxes $4,489
Balance on 1st $51,931.43
Balance on 2nd $46,910.67
Total $98,842.10

The current market value is 289,000. The first and second mortgage is to be paid off with a new 15 year 200,000 first mortgage @ 5.5% (which I will be taking on)

We are splitting the equity by 50%. The remaining 89,000 in equity will be broken down in a second position loan @ 5% against the property to be paid out of the rents over time.(see amortization schedule).

Combined payments are 2,158 on the new first PITI and 351.90 on the new second total $2,509

Current rent is 1,000 downstairs and 1,500 upstairs.
Both mortgages will mature summer of 2026 at which time the house will be free and clear. That point we are left with 2 options. Sell and split or Buy out from 1 party to the other. Also he said he will set up llc where we are 50/50 partners and there will always be 6 months piti in escrow for vacancies,repairs,etc.

What do you guys think? This would be my first ever rental and I want to start off on the right foot.Basically no money out of pocket and hoping for appreciation, which I know you can never count on. Thanks in advance for you advice!

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