Quote from @Jaycee Greene:
Quote from @Mitchel Quinn:
My name is Mitchel Quinn and I would like to get a good foothold in the door of real estate to get on the right path and stay there. My girlfriend and I have been looking at properties over the last couple of months due to life situations changing and having a decent chunk of change saved for a down payment. We walked through a property that we went into thinking we were not going to like it and we ended up loving it and jumping on it pretty quickly after because the seller was getting other cash offers and the price/location/set-up of the property just fit our situation well. The price we thought was very reasonable in this current market based off the other properties we have seen prior to that with similar layouts. We would be incurring the tenants in one half and would live in the other half ourselves. Currently we are finalizing paperwork and figuring out what insurance we need and just trying to figure everything out all at once. I would love to just put my mind at ease with a little more knowledge and pointers as to how we can start out as strong as possible. Thank you for your time.
Hey @Mitchel Quinn, welcome to the BP Forum! Do you mind putting some numbers to your narrative?
Sure thing. The property listed for 200k, so we talked them down to 190k and they are covering 2k of down payment. The property then appraised for 190k which was good news since we didn't overspend. The down payment is being estimated by our loan officer currently, but we are thinking around 12k which will leave us with around 6-7k leftover from what we had put aside. We were approved for 300k FHA or 200k conventional loan so we decided to use conventional. Inspection was average for the age of the house around 90 years old. No major red flags, mostly small fixes to start out and I am pretty handy. Biggest thing I think would be replacing the galvanized plumbing in somewhat near future (1-2 years). For the layout and having 1 bath 1 kitchen each, I am guestimating the repairs maybe 6k each unit if I did not do it myself/with friends since I have plumbing experience. Most other things in the property seem like they can be fixed/replaced as we see fit or as they start to go out (knock on wood). Appliances estimated lifespan around 5 years and similar life I'd call out for the tenants furnace. The roof and our unit's furnace replaced 5 years ago. The property is in Cuyahoga county Ohio which I believed was a decent area to start out due to the population and amount of things to do in the general area. Insurance companies and car dealerships and plenty of other consumer businesses close by. Close enough to Cleveland around 30 minute drive. The tenants currently rent for $950 which was their stagnant rate the last few years. Thinking of upping that to $1,000-1,050 to start out their lease, which we are still figuring out currently. That would offset about 2/3rds of the mortgage payment. For the few years tenants have been there the interior of their unit looked well kept, so they seem to take care of it. Hopefully this info sheds some more light on what I think was a good 1st time purchase.
