All Forum Posts by: Austin Johnston

New to Austin area. Anyone know anything about Pioneer Crossing East? Good area? Up and Coming? Looking at buying a primary residence. Thanks in advance for anyones help. 

Disregard Forum

Matt thank you for the response, exactly what I was looking to know. I was able to get closing costs rolled into loan, so I won't have to pay for those. Thanks. 

@Robert Farris

Check this out:

http://www.mtgprofessor.com/A%20-%20Term/30_years_or_15.htm

@Robert Farris,

I am new to investing myself, but I think I can add some value to your question. I just had my purchase offer accepted today, and had to choose between the exact same terms you did.

I went with 15 years, and I'll tell you why.

Between 30 and 15 there was a $200 difference in payment per month, leaving me with either $600 or $400 in cash flow. I based it on a few things.

1.) I am currently 22 years old, and with a 15 year mortgage I will have to house paid for at the age of 37.

2.) Next, how much work does the house need? If it needs a good amount of things done, than the extra cash flow would probably be useful. If not, and you can afford the difference in payment from 30 to 15 that take the lower term.

3.) I feel like everyone here is failing to note that in the long run you will be paying a significant more interest and principal in 30 years than the 15. Yes you could refinance down the road, but if you can afford it and you don't need the monumental cash flow than pay it off as soon as possible.  

As Ali noted, it depends on your plan, if its long term like mine by building equity and not being greedy with cash flow than 15 years is a no brainer. 

Just had my purchase offer accepted today. What documents should I obtain from the previous seller, aside from security deposit, and previous lease? Any tips for closing process to cut costs etc? Want to do it right the first time. 

Bill it's in excellent condition, just needs three new windows. I will gladly put the calculator down. Not a fan of math as it is!

Brandon,

I am also new to investing. Based upon your numbers, I would say you have to be a long ways off. From what I gather your property is a duplex and you plan to live in one, so really you're only bringing in $1,300 a month, and assuming you have a decent interest rate, you'll still be paying almost $1,000 yourself for the mortgage.  It seems to me that you have two options

1.) Purchase the property as low as you can and live there while building equity and still basically pay rent.

2.) Purchase the property via a conventional loan and pay rent elsewhere. Either way I don't see how it would be playing out the way you envision. Just my thoughts. 

I am in the process of negotiating the purchase price of my first multi family home. I've run every algorithm that an individual could recommend, and all seem to check out. Is there a simple and effective way to analyze a property, or is calculating the cap rate, 1% rule, 50% rule etc, cash on cash, NOI, all necessary? Looking for some insight.

Background:

Excellent location

Duplex- $1,500 per month gross

3900 sq ft 8 bedroom home 3 bath

Current negotiation at $83,000 (closing costs included) 

Down Payment $2,500

Tenants pay all utilities

$3,700 annual taxes

$360 Insurance

$1,000 start up expenses

No management fees

Loan 4% for 30 years