Updated over 10 years ago on . Most recent reply
First time deal Thoughts?
I am buying 2 small homes in a small town in North Texas with very strong rental demand.
These are 3 bedroom, 1 bath, identical floor plans, next door to each other and only about 6 blocks from my home. I got financing through a local bank at 4.75%, 15% down, 15 year fixed. Price of one unit is 42,5k, the other is 45k, due to a room addition.
These are older homes, with tenants in place. We have inspected both homes twice, one is kept very nicely, the other is ok, but not as clean and well kept. Both properties need some maintenance, rotting wood, paint and some updating and such. Buyer is providing a 1 year warranty on each home.
Bank is wrapping them into one note, which cuts the closing costs considerably. At present, each home is rented for 650 per month. The market can easily support 750. One lease is up in October, the not so clean house. I may raise them up to market, in hopes they clear out and I can get a better tenant. The other lease is up in February, and I may give her a bit of a break, because I want her to stay. Maybe boost it 35 bucks.
So, $12,975 down, 4.75%, 15 years fixed. Insurance and taxes about $110 a month each. total rent after expiration ~$1385.
Opinions?