Hello all!
I need help! My husband and I have been saving to invest in real estate, and a house has just piqued our interest. I need help deciding if this deal makes sense, or if we're still a little early to the game.
The house is 2880sqft. It's a 2/2 with an attached 2/2 mother in law suite on 0.6 acres in a fast growing suburban town. Purchase price $195,000 sold AS IS. The main house looks like it needs a lot of updating.
I've already been pre approved by a lender and he estimates our monthly PITI to be around $1550/mo. Our realtor looked at comps in the neighborhood and believes we can get $1300-$1500 for the mother in law suite and $1000-$1100 for the main house as it currently looks. Taking into account vacancy, maintenance, cap ex, and property management, we will cash flow if we can charge $2600/mo for both units before updating the property.
Our goal would be to rent out the mother in law suite, update the main house, rent out the main house, then refinance the property.
The main house is going to need a lot of work. My first problem is that the down payment and closing costs for the loan will drain our cash reserves with the exception of a 3 month emergency fund. Ideally, I would have loved to have an extra $5,000 - $10,000 in the bank as cash reserves for the property. Second, we would have to find a way to fund the renovations. We've talked about private money, hard money, liquidating some of our stocks, etc.
Are we getting a little ahead of ourselves, or this a good deal and we should jump on it? I'm nervous we are somewhat over leveraging ourselves.
Thanks for the help!
