All Forum Posts by: Dusty Corning

I'm looking for a good CPA in Houston to help me perform tax returns and with ongoing tax planning. I've got a couple limited partnerships and an LLC along with typical W2 income, real estate, and interest income. I would appreciate any recommendations available. By the way, I'm in Sugarland, TX so preferably someone on the southwest side if possible. Thanks! Dusty

I've been taught that your house payment (PITI) shouldn't be more than 25% of your paycheck. That's probably conservative, but the idea is that you don't want to get strapped to a mortgage so big that you can't enjoy life and save for retirement. I would also never do a 5-year ARM. Interest rates are at extreme lows and can only go up from here. The only way to purchase is with a 15-year or 30-year fixed mortgage. Sounds like you've been doing a great job saving since you can put $100K down, and you are close to the 25% mark if you take into account the income from the farm. If it were me I would work on getting my income higher before I'd buy that big of a house payment. If you really want it, you can also try offering less for the land since the seller doesn't have to pay commissions. At 300-320K it fits your situation better.

Based on your numbers I'm getting $2,900/month rent $1,450/month after the 50% rule. I've heard that the 50% rule may not be enough on multi family units especially since you mention that there is a flood insurance requirement and an old HVAC. But let's use the 50% rule anyway. Purchase price $325K Est. closing cost: $5K (just guessing, but I suspect I'm low) 25% down and 5% financing gives a monthly payment of $1,309. Positive cash flow of $141 / month $86,250 cash down give a CoC return of 2%. Need to offer less in my opinion.