All Forum Posts by: Nathan Rude

Is the house worth 45k? All things considered, I think 8.9% is pretty low for Dayton.

That doesn't make much sense to me. Here's a few questions I had

1. What is your ROI? If it's not positive don't bother with the house.
2. 25% vacancy seems pretty high. Why so conservative?
3. How did you come up with repair costs?
4. Is the house worth asking price + repairs? I'm guessing not since it's been sitting for a long time.

Personally I would do a 30 year mortgage to increase cashflow, but that's a personal preference.

How much is your car?

Well I think it depends on the property. With newer properties you might not need so much for maintenance, but after walking through this one, you could tell it was old and things would need to be taken care of. I'm pretty terrible at estimating how much it would cost though so I just said 10%

I'm trying to analyze this 4 plex which I would be occupying with an FHA loan. I understand the low equity and mortgage insurance will cut into my cash flow, but I'm not seeing much returns from this property. Can you tell me what you think from these numbers?

Purchase Price - 122,000 + 5,400 cc (PMI included)

Down payment - 4,270

Estimated monthly rents of 2000

Monthly Expenses

P&I - 596

PMI - 81

Taxes - 408 - higher than properties listed for 50k more than this one

Insurance - 100

Expenses

Vacancy - 100 (5%)

Maintenence - 200 (10%)

PM - 200 (10%)

Water, Sewage, Trash - 100 estimate

CapEx - 200 (10%)

Annual Gross Rents - 24,000

Annual Expenses - 14,268

NOI - 9,732

After Mortgage (No Capex) - 2,580

After CapEx - 180 annually

I'm not certain of the utilities, or if I'm being too conservative with my expense percentages, but this property doesn't seem great. The low down payment + PMI + property taxes seems to be eating me alive. Plus the seller has "renovated" 2 of the units, and I would have to renovate the other two to bring up rents to 500/m. In addition I would not be happy living in this property. I'm not sure if this is psyching me out of purchasing, but I also don't want to purchase a lemon.

Anybody have any thoughts about this? Can you spot if I'm calculating anything wrong?

@Noel Challenger that's exactly why I posed this question. I'm definitely not looking to do something that would get me into trouble! And thanks for the book suggestion, I'll be sure to check it out!

Thanks for the suggestions everybody! This is the first time I've ever been in this position before so I wanted to know what my options were, even if they were bad! Sounds like the general consensus is to not pull out equity from the vehicle.

@Jason D. it would probably go towards a 30k SFR. I'm not really sure how this isn't different from a cash out refinance.

@Robert Freeborn that does make sense. I just didn't know the legalities behind it.

@Jeremy Hua I never said I didn't. I simply asked if this cash is able to be leveraged.

I have the opportunity to acquire a vehicle at an incredible discount. The purchase price would be 2750 and the retail value would be 8300. A local bank has run the numbers and I can put a car loan on the vehicle for up to 125% LTV for a loan of 10,375. Subtracting out the 2750, that leaves me about 7600 I can cash out of this loan.

My question is this - would I be able to use that as contribution on a down payment on a property? I'm not sure if this is even legal, using a loan as down payment, but I thought it would be a great opportunity if it is. Essentially I would buy a car that lets me buy a house that pays the house and car off!

Anybody have any insight into this?