All Forum Posts by: Nick Stango

I'm looking at renal properties and I'm using the 1% rule to get a quick estimate on how much I should pay for a property according to what the rents go for in that area. It seems to be a little difficult to find a deal on a property that falls into the 1% rule when I look at the price compared to the rent. Should I be looking at the mortgage amount instead? So if a house is selling for $150,000. and rents for $1,200. per month and I could put $30,000. down, is that considered the 1% rule? $150k - $30k = $120k '/. 1% = $1,200. ???

What about a deal that has a negative cash flow on a 15 year mortgage? Should I try to get at least a break even deal if I'm not living in one half of the duplex? Going with a 20 or 30 year sounds like it might make sense since I can throw money at the principle when I can to build equity, I just want to make sure i don't lock myself out or getting more property down the road, I want to build a portfolio as quick as possible, so I need to keep as much money as possible liquid.

I want to buy a duplex but went to use a 15 year mortgage but it's hard to cash flow with a 15 year mortgage. Should I just be ok with the equity growth?

WOW! Lots of great replies here, I wasn't expecting so many so fast. While I was readings these replies about 5 more questions popped into my head, thinking about what  

@Jordan Williamson said about making sure you get a good deal instead of looking at the lower my expenses aspect and it rang a bell, I was definitely looking at this the wrong way, This would be my first investment property and I don't want to regret it, the more I analyze this without living in it, the worse it looks, but when I see the lower my expense aspect when living in one side it appears great. My mortgage payment would be very low and I could easily manage one door that I was living next to. My wife and I are fine with leaving my house in PA for one side of a duplex in FL. But now that I'm crunching the numbers, it's not looking so profitable. I kept coming up with a negative cash flow but that is mostly because of me wanting to do a 15 year mortgage. I can't stomach another 30 year mortgage. I'm 51 years old and I need to build up a retirement package in the next 10 to 15 years or I will be swinging a hammer the rest of my life. What kind of cash flow should I be looking for with a duplex with a 20% down payment and a 15 year mortgage? Should I be happy with just equity growth and no cash flow? Thank you everyone for the great response.

Thanks again to all

I'm thinking about selling my house and buying a duplex, but to do so I would want to move to SW Florida and I'm not sure if I should live in one side and rent the other side or if I should rent both sides and live in a separate place as a renter so I could have some more investment options. Any advise, please consider the fact that I'm self employed and may have some issues getting a mortgage right away unless I use a private lender.

 @Doreen 

@Doreen Chaisson Thank you very much for your reply, this is very informative and has answered most if not all of my questions. Thanks again Doreen, by the way, my wife's name is Dorene too!

@Brian Eastman and 

@Kirk Chisholm, Thank you for your advise, I have another question about this subject. Does a duplex that is both lived in by the owner and also rented out to a tenant get defined as a investment property, and if so does the income become divided if the property is purchased with a portion from the ira and a portion from private funding or personal cash? I other words if the property is purchased for 100k and 50k came from the ira and the rest is financed through a private lender or mortgage company, and say there is a $200 per month positive cash flow, does all of the cash flow need to go back into the ira? Thanks again.

My wife and I are thinking about moving to another state so we can invest in real estate more easily. We want to buy a duplex, live in one half and rent the other. In order to get a loan to do this (since I am self employed) we may need to go with a private lender as opposed to a conventional mortgage, so we would need a larger down payment. The money we will get from the sale of our house will cover most if not all of this money needed, but we were concerned with not having any other money to invest after purchasing the first duplex. My wife has a pension where she works and we were wondering if we could put that into a self directed IRA and use it to invest in real estate, and if so how would that work. Any info would be greatly appreciated. Thank you, Nick

@Jose Tamayo Jr Hi buddy I want to first welcome you to BP and I hope you get a lot out of this site, it's a great place to get lots of good info about REI. I would say as far as For Sale Buy Owner goes, it's not easier, but you do stand the chance of saving some money doing it on your own, but you will have to work for that money and you may need to spend some money marketing your home to get the word out enough so that you get some traffic. My neighbor is selling FSBO and he has a buyer under contract, now if it goes to closing is another story. we'll see what happens. He did put some signs up around the neighborhood and a info packet holder on his sign in front of his house so anyone can just pull up and take a information sheet. I hope this helps along with all the other info here. Best of luck, NIck