All Forum Posts by: Account Closed

I see exactly where you are coming from. But what about long term? Would I not end up ahead after my mortgage is paid off?

 Hey Joe, thank you for the advice. I have a question regarding profit/CF. I'm going to move out of my current duplex and rent both sides. I will owner occupy my new duplex. The total of the 3 rent payments will cover about exactly 100% of both mortgages with no cash to spare. I'm not really pocketing any money, but I'm also not spending my personal savings from my job on my mortgage. Is this considered positive cash flow? Or more neutral cash flow since I'm not making a profit in my mind....Or is this actually considered profitting because my mortgages are being paid and at the same time it's allowing me to save what money I make at my job?

Thank you much for the advice Mindy!

The app will not allow me to post my email and/or phone number...

I appreciate all the help, thanks so much.

I currently owner occupy a duplex that I took out a conventional loan on. I put 20% down and 15k into renovations. The tenant's rent covers 100% of the mortgage. I do not have the funds to put 25% down on my next purchase unless I wait 3+ years to save. I'm considering an FHA loan to take advantage of this opportunity instead of waiting 3 years, so yes I would have to owner occupy the second duplex. With 3 tenants paying rent on 3 of the 4 units, it will likely be a wash for mortgage payments. Then, in 3-4 years I'll be ready for another investment. The new duplex is only a couple miles from my current duplex.

If this is not the best path to take, I'll take any advice I can get on how I should move forward. 

Joe

@Jeremy Pakalka thank you for the solid answer. I like you thinking on this scenario.

My duplex of interest is currently for sale but full occupied, and the leases end April 2017 and September 2017 at the end of the month. I would like to owner occupy this duplex. What are your thoughts on "forcing" someone to move, when both tenants want to stay? With an FHA loan, is there a grace period as to allowing the buyer a certain amount of time before they have to be moved in? For example, if I buy the duplex today, can I wait until April 2017 to move in?

I'm considering investing in a duplex that I will owner occupy.  The duplex was built in 1991 and is priced at 285k with an assessed value of 255k.  The listing agent said that the price was set where it's at because the seller does not have much equity in the place.  Other websites like zillow give estimates as low as 215k and show estimate details that the property has never been estimated to be worth over 200k until last year.  From my experience, I know that the market right now in this location is not considered excellent for investors.  I'm generally one to start with a low offer either way.  But, what is too low?  Is it insulting to offer 200k?  Will an offer that low turn the seller against me?  I'm not one to mind giving a low offer, and I've been on the receiving end as well so I can understand how it feels.  I would at least like to leave myself some room to negotiate. 

Hello Mindy and thank you for the response. I have been in my current duplex for 7 months, and I do not believe there is a residency requirement but definitely something I will look into. The next duplex I will be living in for several years is my prediction. Glad to hear you see no other issues. 

Thanks again.

Thanks for the reply! My first loan was conventional, so I have not yet taken an FHA loan. I'll keep in mind the 203k, but unlike my first duplex, this one is more move-in ready.

New investor as of early this year.

Scenario: I own one duplex in Madison, WI that I owner occupy. I put 20% down, put 15k into renovations, and now the rent currently covers 100 % of my mortgage. I currently have ~15k available for investing. As far as I know, if I purchase a second rental property, I will need to put 25% down. But, with an FHA loan, I could put ~5% down as long as I were to move from my current location and owner occupy the second investment.

There is a duplex that I am interested in that is roughly 275k which would take over 3 years of savings for me to put 25% down. With the FHA loan, I could afford to put 5% down today. My mortgage would be around 2k which could be covered by the extra rent coming in from my first duplex when I move out and the rent coming in from the second duplex. So at this point, it appears that I would own 2 duplexes with both mortgages being covered by the three tenants.

I calculated out that it would cost an extra 60k over 30 years for mortgage insurance with the FHA loan and an extra 40k in payments due to only putting down 5% instead of waiting until I can afford 25% down. If I were to put down 5% now, in ~4 years I would have enough saved to possibly invest in a 3rd rental property which would eventually make up for the extra 100k that was spent on the second property due to the FHA loan.

What would you do in this situation? "Take advantage" of the FHA loan and go owner occupy a different duplex and rent both side of my current duplex.......or wait until I have enough saved to put 25% down using a conventional loan?

Are there other fees and expenses involved with an FHA loan besides the mortgage insurance? Can you put even less than 5% down with an FHA loan? What other details am I not thinking about that I should consider?

Thank you much for any responses!!