All Forum Posts by: Kris McLamb

Also, No HOA and I'll manage myself

I've been looking for my first investment property for 1 year now and have been unable to find anything that I would consider a "good deal".  Right now, I'm as close as I've ever come to purchasing a house to rent out but when running the numbers, I'm starting to doubt it and will likely not purchase (again...).  But before I do back out, I'd like some opinions

I have a full time job that will not allow time for rehab, but I want to invest in real estate and use the equity and accumulated cash flow in one (maybe two) properties as a college fund for my 2 year old (rather than the stock market)

Single Family Home, 2 bed, 1 bath

$180,000

20% down payment at 4.875% for 30 years

Will require no improvement costs (built in 1950 but recently renovated, new appliances, new roof)

Estimated:

-Rent: $1,100 easily for rent but I'm not comfortable estimating higher as I want to be conservative with it

-Tax: $1,800 yearly

-Insurance: $630 yearly

-Maintenance/Repairs: 1,200 yearly

-Admin/Advertising: $300 yearly

Hi!

Attempting to purchase my first investment property and was asked a question by a lender I wasn't expecting.  20% down payment for a 4.875% rate or 25% down payment for a 4.5% rate.  The math seems to be in favor of the 25% down payment as it will give a higher cash return each year over the 30 year term.  I'd like to hear others thoughts on comparing the two.  Maybe I'm missing something?  I plan to keep this property for at least 20 years if not well beyond the 30 year mortgage.

Thanks!