All Forum Posts by: Andrew Meyer

Honestly I don't think you can ever be 100% sure you analyzed it right, or everyone would do it and there would be no risk. Now what you want to do is your best estimate and give yourself some room if something bad or unexpected happens.

You can value a duplex a couple ways. Depending on your area, it could be very hard to value by comparison, which is my case. So I value the duplex by cash flow. I get rent, insurance, tax, maintenance, hoa, utilities, mortgage and any other expensis. I have a spreadsheet I put all the numbers in and it gives me cash flow.

So for example, I am under contract for a duplex right now. Market has very few sold duplexes, and honesetly I don't care as much as long as I can cash flow. And with my numbers it shows a healthy $200-300 cash flow per unit at the contract price.

Only way you could know if seller financing would work is to ask the seller. They would probably want to do a short term deal and then refiance it once you are able to, but you'd have to work that out. 

I know my RE brought me a deal of 9 duplexes, but I don't have that kind of personal financing, but they are willing to do some seller financing to cover part of the down payment and then if I can get a 70% LTV commercial loan to cover the rest we might be able to work out the deal.

Ah, ok good idea! I was told it was 10% for the PMI to drop off after 11 years I believe. I'll check with the 5%, because that would hardly be anything.

So I am under contract on a duplex. I can do a 30 year conventional with 15% down at about 4% APR, or a FHA with 3.5% down at about 4.65% APR. Pretty much it works out to be about $160/month difference in payments, but keeping 18.4k money for another deal. Also the coc return for conventional is around 25-30%, coc for FHA is almost 100%

So is that 18k in pocket worth 160/month? I figure that I am paying roughly 10% APR on that 18k, but if I can invest it in another duplex and be MAKING 30% coc return from it, I would be making more from my money.

Also, I will need to take into about that after a few years the PMI would drop off the conventional loan, so I would be saying another $75-100 at that point.

Am I missing anything? Any one have any suggestions that I missed?

I am at the exact same point! I am under contract on a duplex for 160k and looking at loans. I'm probably going to do a 30 year loan, because as others have said, if you need the cash you have it and you can still pay it off quicker. The .5-75% savings in rate is nice, but it won't make or break you in the long run, while 200-400/month could be a huge issue if something bad happened and you really needed it.

Ah ok, yes it would be my primary residence.

No, I'm not 1st time buyer =(

What is OO?

Apparently this isn't entirely new, but my mortgage lenders seemed to say it was a new change.

I am in the process of making an offer on a duplex, so I have been getting approved for the mortgage from several enders. Initially, I was told the normal 5% min for 30 loan, but after talking with a local lender whom said that new FMFM rules now require a 15% downpayment for duplex and I assume and 2-4 unit MFHs. So far I've contacted several different lenders and 1/2 of them initially said 5%, but later after confirming what the local one said, that it would be the new 15% min.

So, rules for MFH of <4 units has changed, and generally will require a min of 15% down payment regardless it seems.