All Forum Posts by: Mason Mccullough

Done is better than perfect @Mason Mccullough. It sounds like the numbers work as it cashflows if you don't live in it and you are reducing your current rental expenses. Could you find one that pays for itself? Maybe, but you haven't yet. Plus with the owner financing the debt is not on your credit file so if you wind a better deal you should still be able to take it. If this is a deal take it, it doesn't sound like it is going to stop you taking a another smoking deal if you find one. 

@Steve Vaughan If there is currently a mortgage on the property, then that will answer the question. @Mason Mccullough What neighborhood are we talking about. THAT is one of the most important factors in GNO.

I would first determine if the price is below market value based on comps. If it is then it could be a good deal if it is in a location your family wants to live in for a while. The stated owner financing terms sound favorable.

I think there is a fair amount of uncertainty on where the market may be headed. If jobs leave the city permanently then you may see prices soften and decline over time. I would not advise paying top dollar for any property at this point in time.

A good option may be to find a house you would like to live in well below market value that needs remodeling. There are options around the city but you would have to be flexible on location when an opportunity arises. 

What do the numbers look like if you live in the two bed and rent out the 3?

Regarding your previous comment about other properties where your out of pocket would be the same as what you're paying for rent now. That would still be a move up as you would be gaining equity.

I would have a little concern about someone wanting to exit out of an investment property so soon after they acquired it. Make sure you do your "due diligence". If they want "out", then maybe they would negotiate on price a bit. The interest rate sounds really good for an owner finance though.

It sounds like the $25k spread in price is paying points or advanced interest. maybe structure the sale to reflect that so your taxes don't go up even higher based on the sale price. Is the property in a flood zone? Be sure to check that.

This is one of those questions that only you can answer.

From strictly a rental property analysis standpoint, $2600/mi in potential gross income for $375k is roughly a 4% cap rate - That's not incredibly exciting, but also not terrible (it's also very market-specific...it would be great in some areas, terrible in others, and I know nothing about the Metairie LA market). 

That being said, we aren't talking about a strict rental property analysis, we're talking about opportunity cost:

1. If you take this deal, are you passing up on other, better opportunities? It would appear not, since you have found nothing else in the past 7 months. 

2. If you take this deal, you it's an opportunity to save $500/mo compared to your current situation - What does that extra $500/mo do for you in terms of your long term investing goals? 

3. If you don't take this deal, what's the opportunity cost of maintaining the status quo and paying $1300 towards your landlord's mortgage every month?

These are just some things to think about. There is obviously a ton of uncertainly baked into the economy and the real estate market right now, making it risky to pay top dollar for anything. But there's always a risk to doing nothing as well - and only you can decide which (and how much) risk makes sense for you, your financial situation, and your long term goals.

I haven't had coffee yet and I'm not checking your numbers, but it sounds like an opportunity if everything is correct. The best part is that you're not required to put down a large payment or pay higher interest and you're not dealing with a bank.

My only concern would be what happens if you decide not to live there. It only works as long as you occupy it.