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Updated over 7 years ago,
A rental investment opportunity for a brand new newbie!
Hello all! I'm a (pre) newbie as i haven't made my first investment yet. I've been a member for a few months and this is my first post. I've been reading a lot of articles on rental real estate. It's exciting to know that I can set up a process where i own a rental and money just comes in. First steps to financial freedom, right?
So an opportunity fell into my lap where a friend of a friend offered me a duplex to purchase. it's less than 5 minutes from where i currently live, which is great! The place is around 30 years old, and in decent condition. Below are my questions.
1. The seller is selling the property at market value, not below market. He's not a motivated or distressed seller. He's selling it because he lives about 45 minutes away from the property and wants to find another property closes to where he lives. He's already an investor with a number of rentals in his portfolio. He's in no rush to sell, but if he finds someone who will take his price, he will happily dispose of it. My question. It's at market rather than below market value. Everything I've read says i should be below market to get the best deal. What should I do?
2. I don't have the funds to pay for this property in cash. As a newbie, I could get a conventional loan (lower interest) or i could go to a private money lender. Can I really borrow 100% to buy this place outright and then pay back a private lender? My confusion is that for a conventional bank mortgage, i can get a 15,20, or 30 year mortgage product. But what would it be for the private lender?
The nice part is that it already comes with tenants! I don't need to market it, do any upgrades immediately or anything! So it's a great opportunity. But given questions 1 & 2 above, is it worth pursuing? I've read a lot, but since i haven't gotten my hands dirty yet, I'm unsure the next steps. I would love to get advice from the smart people on this forum. Any responses would be appreciated. And if you just read this, I appreciate that as well.
Thanks!!
-Kish