Yeah, if this is an investment property you should realistically expect to put down at least 25%. So, if you put down $75,000 your COC will be pretty low.
Yeah, if this is an investment property you should realistically expect to put down at least 25%. So, if you put down $75,000 your COC will be pretty low.
Thanks, makes sense. It will be owner occupied for 2 years then become an investment property. We were looking at as strictly investment so the COC being high makes sense. As OO they won't realize that gain.
If it's owner occupied for 2 years they could qualify for 3.5% down FHA or even 3% down with conventional. Interest rates are at an all-time low, that would skyrocket the COC when they started renting it as an investment property. House hacking at it's best.
The numbers look a little loose, I might scrutinize them a bit more before I pull the trigger, but it could be solid.
@Tony Wallis, make sure you run your numbers both ways. You house hacking and after you move out. This appears to be after you leave an make it a pure investment property.
Closing costs look low. Might be 2X that. Talk with your local lender.
Add in budget for initial repairs. There's always something!
Since you're not putting down 20%, there will be PMI. Probably between $125-250/month.
Repairs and CapEx are low. I underwrite to 15% combined. Especially since it's 100+ years old.
Vacancy might be a bit low. This is super local, but I like 8% on a MFR.
What's the $25 electric bill cover?
You're forgetting management. Always underwrite with management, even if you plan to self-manage at first.
What about lawn care, snow removal and admin/professional costs?
I don't see this as a viable investment. I think you'll lose money each month, even after moving out and getting rid of PMI.