Originally posted by @Kay H.:
Originally posted by @Barbara G.:
Originally posted by @Amy Van Ollefen:
Depends on how much value you put on living in the specific area you want. As a pure investment scenario, negative cash flows seems like a pretty obvious bad deal. But the factor of you living in the specific area you want weighs in heavily, and you can get other people to help pay the mortgage, that's better than paying it all yourself. If you've taken the time to research properties in the area, and these are the best numbers that seem to come up, then it may not be a bad thing to go for it. It depends what you're ultimate goals are.
We have narrowed it down. You want to live in this area. Is this the way you want to do it? Is the $800 or $900 rent you will be paying a good deal? You will also learn how to be a hands on landlord owning this property. That's worth something. How much is your water and sewer and garbage collection? If I was young I would pay a big premium to live in Greenwich Village in New York, or in the 80ties near the Museums and that would be great. Is this area easy to sell when you want to move on. How much, as every one is asking is a similar apartment renting for in a similar building?
Ohh I finally see what you mean by saying I will be paying the rent. But will I really? The p&i is 1305 and there are 2 renters paying 1400 hundred all together. So I would only have to pay the tax and ins payment. I'm sure maintenance and vacant won't happen every month right?
What could I do to possibly make this work? Lower the sales price ?
LOL ???? very rookie...not insulting you, but just pointing out the fallacy of P&I being the rent portion and the TI being holding cost. Your "rent" is the opportunity cost of not living there and renting it to another person. By not charging rent to another person, you are in effect charging rent to yourself.
I did some quick research, and you can probably get other FHA homes for less. Bottom line, negotiate a lower sales price to get to breakeven cash flow based on the condition it is in today. If you invest in improvements, target a 50% return on capital ($20k value for $10k invested). If you love living in the area and can't make the numbers work, do what I do and rent.
I've never owner occupied in years. I rent in the expensive part of town because my landlord is willing to lose money on the deal and living a pipe dream about depreciation and appreciation making him money at the same time! ???? Don't tell him I said that!