Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here
Pick markets, find deals, analyze and manage properties. Try BiggerPockets PRO.
x
All Forum Categories
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

All Forum Posts by: Darian wolffe Wolffe

Darian wolffe Wolffe has started 1 posts and replied 2 times.

Post: Help Please, 1st Deal Buy & Hold Analysis

Darian wolffe WolffePosted
  • Investor
  • San Mateo, CA
  • Posts 2
  • Votes 0

Try investing in property somewhere else, I invest in Rochester NY and live in California. Average ROI I get is around 65%.

So I invest in buy and hold multi-family real estate in the Rochester NY area. My question is does it make sense to take on a higher interest rate if it allows you to negotiate to a lower down payment and less closing costs. Here's an actual property I'm looking at with rounded numbers to make it easier.

TRADITIONAL.                              HIGHER INTEREST

Price              50,000.                    Price.             50,000

25% down.   12,500.                    20% down.   10,000

Closing cost.  3,000.                    Closing cost.  1,000

Total invest.   15,500.                   Total invest.    11,000

Income (3 units) 1,800.               Income (3 units) 1,800

Payments for.                             Payments for 

30 yr at 5% :    109 a month.     30 yr at 12%:  124 

Other expenses: 891.                Other expenses: 891

Total expenses: 1,000.              Total expenses: 1,015

ROI after a year: 62%. ROI after a year: 86%

Bank makes: 4,875 after.          Bank makes 5,800 over 

Life of loan.                               Life of loan.

To me it seems like if I can use the interest rate to get to a lower down payment/ closing cost I can substantially increase my return on investment, shorten the time needed to save for a property, and even make the bank more money at the same time.

What are your thoughts? Am I missing something?