All Forum Posts by: Keith San

Using wheaties calculator I found 2 properties that work for me.

(i'm also thumbing through a book but haven't finished)

basically i'm looking at 2 different 3 families

Cost is between 160k and 200k what they are asking and where I offer.
Rental income is 2900.

I was told i could get a rate of 6.25 if I put 25% down, this can be done if I take out a second mortgage on my home. Or take out the equity some how.

My questions are: with the calculated numbers through the excel spreadsheet or elsewhere.

Do the expenses reflect heating expenses if they are not separate utilities.

Is it a problem picking a home with an unrented apartment?

Thanks.

ok, I've been asking questions so I should at least state why.

As a kid, father owned mult-families in the poorer section of town. This worked out he sold on the 80's run up and bought a store.

ME: I bought my 1st home for 200k 5 years ago. had a contractor add a second floor for 60k, I redid the 1st floor. For about 10k sold that for 369k.

rolled the money into a 500k home currently owe about 290 on it.

looking only at multi-families to rent, housing in my area is way to high though.

Looking at a town 15 minutes away that is low-income with a ton of mult-families for sale but not sure if I want to deal with the kinds of trouble that may pop up in these areas.

Anyone with experience in low-income crime ridden areas let me know.

I've been getting some great responses here so I thought i'd pose this.

My plan is to buy a mutli-family 4 or less, with #'s that work.

I currently own my own home, have a mortgage out for about 60% of the property.

As I don't have a property lined up, I spoke with my last broker and he stated "you need 25% down" on 3-4 fams and 20% down on 2 fams.

In most cases I'll assume I can take the 20-25% from my home.

Are there any other options open to me. I'd like to avoid putting the collateral on the family home but would do so.

Sorry if its a newb question. Awaiting a book and reading away still. Prices are SLOWLY getting closer to what i'd like.

TIA

oops, thread was moved. I wasn't asking about the deal, just trying to work the numbers, on my 1st post looks like at 225k it would fit the bill.

Akre, boston zone is tough at least an hour drive to find anything in the 1% range and that doesnt even cut it. MIKE is right though if the numbers dont work, they dont work.

Good ole mer.lynch just stated they felt house prices will fall 30% over the next 3 years if that happens, we just might get in the range.

Thanks again Mike and wheatie.

MIKE OH: I know you like the 2% i'm in the boston area and using 1% to catch a number and follow the place. currently about 110% of properties are under even the 1% so I dont have many to check out. (I'm not jumping in to losing deals either)

WHEATIE: thanks for the attachment and #'s when I get out of work I'll check that out. #'s are too complicated here where I cant focus.

Thanks again.

Thanks all.

for those "low numbers" i just threw the purchase price into a mortgage calculator. Did not add tax or insurance.

currently on my 290k morgage at 6% with tax and insurance I pay 2300 even. so thats the only # I know for sure.

Figuring if I bought this property for 290k that would leave me 700 left over a month. using other threads here, I figured that wouldn't be enough for all the expenses. and that I would need 1/2 the rental income (1500) to make it work.

As prices are dropping i'm trying to get the right numbers so I know what I'm looking for. My quick eye test is rents coming in at 1% of the price. Its a starting point and was looking to see how low my offers should be. etc...

Thanks for the help.

(what really scares me is the awfull deal part from mike.)

I've read a ton of investment numbers here, but I need to do this for clarity.

I need to know what % the mortgage should take of the incoming rents. Should I include tax in the mortgage when calculating this?

This example is close to the reality i'm looking at. I'm moving the numbers a bit.

Im looking at a 2 family for 300k it takes in 3k a month in rents. Thats about an 1800 mortgage payment at 6% not including Tax etc.

If I offered 250k this would be a 1500 mortgage payment at the same 6% rate not including tax etc. while still taking in 3k

Question: would purchasing the home for 250k put me in that area where rentals should = 50% of mortgage payment, or am I missing something.

TIA.

Thx chop. going to look into getting the LLC done.

Noobdog,
I really don't think my idea is that vague.

I WANT to own some income producing properties, that is my goal as previously stated.

If I bought a property that I felt I had a great price on and could make quick money, I wouldn't hesitate to try and sell it while also trying to rent it. WHY? because I don't have a lot of cash yet and that would help. But flipping isn't the goal.

Is my house worth 500k yes,that would be the tight ballpark, and no its not an important question as i'm not looking to cash out all of the 200k in it or get value for any of the subsequent additions.

Thanks for the responses, and sorry about being broad themed.

I'm just a bit south of Boston residentially and work in Boston these areas and my commute are where i'm focusing my searches.

To clarify: Specifically I would like to have a few multi families, that bring in there own mortgage and maybe money left over.

If I bought a good deal for the above stated purpose and realized I could dump it for a small/decent gain, then i would.

As far as rehabbing, I'm not buying a burned out building an fixing it, but I'm fairly handy and can take care of the small stuff. I would rather buy something cheap that needs work that I can do than buy a building in perfect shape.

Anyways I'm not all over the place as I may sound, I'm focusing on multi families, price matters more than shape I'm willing to flip but not my goal. If I find a deal i'd rather keep it.

Looking into the LLC already.

Goal: to own some profitable multi-families. If I buy one, I may also get it out there to flip and generate cash, as thats the main goal. Maybe even a realty/investment company of some sort.

Area: MA

Me: have a 500k house owe 300k on it, been here for 2 years.

Pocket cash: zero. (obviously can pull cash from house but thats not pocket)Job cash goes to life.

I will be buying an investment house sooner or later, what I'm wondering is since I want this as a sort of side job/investment, should I create an LLC? Or some form of legal corp are there benefits, taxes etc....

Is it better to just remortgage my home for a down payment and get the rental?

In theory I like the LLC stance as it allows me to create an investment property business, and I assume better tax loopholes as I rent and flip etc..

Thanks In Advance for educated opinions.