All Forum Posts by: Annette Hala

I was discussing buying a house vs. a condo as a rental with someone the other day. I was saying that a condo wasn't a good option because the HOA really cuts into cash flow. They asked if I couldn't deduct HOA fees from my taxes. Can you?

Thanks everyone for all your input. It's really encouraging to talk things over with people who know what they are doing. I'll be heading out of town for a business trip, but I'll be back in the game in a couple of weeks.

So following the 2% rule I would have to find a 2 bed/1 bath for under $45,000 or a 3 bed/ 2 bath for under $55,000 in order to come out ahead.
Perhaps my expectations are a bit unrealistic because my parents have had such a good experience renting their house for the last 30 years. They have never had a management company in spite of living on the other side of the world for 25 years. They have never had an eviction, a trashed house, legal fees, or advertising expense, and very little vacancy. This is why I wanted to target the same group of renters.

Anson, the good deals are definitely in Aurora, but I would have to find conventional renters.
I looked at putting less down, but the mortgage insurance is a killer. By far the best option would be to buy and live for at least a year. I have already lost a couple of opportunities during the “first look” program. There is no way however that l am going to leave my current living situation at this point in my life.
I am a very determined person and not a procrastinator and I don’t want to put off buying something until my life is less busy or it’s more convenient because the truth is life never gets less complicated.
Everyone keeps saying this is a great time to get into a property. Would you all agree with that statement?

Let me give you the numbers I have been working with and you can tell me what you think. As an example I will give you the most promising house I have seen this week.
Price $149,900.
3 bed, 2 ½ bath.
Mortgage payment including tax and insurance, $798.38.
Other houses in the neighborhood are renting for $1400. I was going more conservative and using $1135 because I am targeting students at a nearby seminary/college and their 3 bed 2 bath on campus is $1135. My parents have successfully had a rental in the neighborhood for 30 years with almost no vacancy and rented almost 100% of the time to students from this school.
Estimated cash flow $337.
The problem with this house is it needs new windows and carpet. To get in I would be out $34,973 leaving nothing for the fix-up.

I am only looking to buy one for now. If the market turns around and the property appreciates I would consider using the equity to purchase another property, assuming I liked being a land lord.
My financial advisor originally suggested I buy some real-estate many years ago since all of my assets were in stocks and money market accounts. I didn’t know enough about it then so I started reading books. I have now been employed with the same company long enough to qualify for a loan and considering the market figured it was about time I took some action. The 30K I have to put down is earning a measly .65 % interest.
I am trying to limit myself to properties that I think can cash flow at least $350 a month. Once you figure in vacancy I’ll probably break even, but at least I’ll own a tangible investment.

I wouldn't mind having my own license at all, but I am currently swamped in a busy career and am squeezing my real-estate search into my non-existent free time. :roll:

I am in the Denver market. There are properties in my range but they are going like hot cakes. Earlier this week I had 9 I wanted to look at and 5 were under contract before we had a chance to go out. Before starting this I thought it was a buyer’s market and finding something wouldn't be that hard, but there are a lot of people trying to do the same thing I am. Before going out this week I had run the numbers on cash flow and the 5 under contract were the top 5 money makers. Obviously other people can do math too! We haven't actually made any offers yet, but I am thinking of the prospect of this going on for a lot longer than I had originally thought.

I am prequalified for a conventional loan with 20% down. (1323 homes have sold for 150,000 or below in the last six months in the cities I am looking in.)

Does any body else feel guilty about running their real-estate agent around to look at low end properties and having them make countless low offers? My top budget is $150,000 so the commission isn’t going to be great and it makes be feel bad to be using so much of his time.

I would also be interested to find out the answer to this question. I have been looking at HUD properties as well.