First rental apartment plan question

[Huy Ly]

Hi BP,

I am planning to purchase my first property to rent. I want to start with a simple deal first so I decided to purchase an apartment which could be easy to manage. Let me start with some facts before having questions for you guys.

I am thinking to have a mortgage for my first 1-bedroom apartment properly about $180k in Center City Philadelphia. The rental around that area is from $1500 to $2000. Below is my basic math for my investment:

Annual Interest	N (years)	PV	PMT/month	Monthly Rental	CF
4%	30	$ 180,000.00	$ (859.35)	$ 1,500.00	$ 640.65

The 180k price tag is not negotiated yet. So please advise on the other expenses on this rental, and how to evaluate this apartment value.

I started work right after school on Jan 2015, and have no property on my hand. I have about 30k in cash. I am also married, and my wife is still in school. How should I have a mortgage on my first deal? What type of finance do I need?

Please feel free to share all of your thoughts.

Huy

[Barbara G.]

If it costs you $180,000 for the apartment Your closing costs could be approx $5,000.  if your down Payment is 25% this does not sound like it will work.

Have you considered buying and living in a Duplex or Triplex where you could get a low FHA loan?