Hello all. I am very new to the site but I have been religiously listening to BP podcasts for a year now. I really need some guidance on a potential deal that I am very excited about. Its just like the law of attraction sort of situations that Brandon spoke about where when you focus on something so hard, the universe presents it to you.. so I thought I'd ask for some advice on this forum, that Brandon is always talking so greatly of.
Here's my situation. I own two rental properties in suburbs but I live and rent an apt in the city. Property in the suburbs was a lot more in my budget so i thought i would start to invest there, I however I have to live in the city, I'm just a city person. Anyways Ive been renting an apt in the city for 6 years now and I pay $2,000 rent. It is a condo in a 70 unit building. My landlord owns 4 units in this building of which my apt is one. Recently the condo board said they will be making some major improvements to the building and each unit will have to pay $30,000 towards the improvements. This is very difficult for my landlord who would have to pay 30k x 4, liquid he doesnt have laying around. So he told me that he is looking to sell one if his units, (the one I'm living in) in order to pay for the dues of the other three. He originally told me about it to warn me that if it is sold I would possibly have to move. But it made me think of how i could possibly buy it.
So heres the deal: he would like to get 425K for it. But in so many words he suggested he could work with 375k. The thing about it is there will another 30K of dues that I will have to come up with within 3 months of purchasing the condo. I have two properties already and was looking for another but wasn't considering and expensive city condo. For 350K I get 3plexes in the suburbs.
So I am very excited about this because A) I would love to pay my 2K/month in rent towards a mortgage instead of toward rent B) I love living in the city and it is my dream apt C) i have been adamant about RE investing for the past two years and so it makes a lot of sense for me invest in my own home. D) Appreciation in NYC is crazy. Its an international city, so demand will continually go up regardless of domestic economic situation. I know we are not supposed to bank on appreciation but because city property is so expensive, you cannot really cash-flow any property in the city if you try to rent it out.
But her are some of my concerns:
A) I don't have money for down payment, I can pull it from the equity on my other rental, and If I can get a conventional mortgage to pay for it where will I get the 30k for condo dues? Also I've heard so much of this creative financing. Can anyone suggest some creative financing options here? Like seller finance scenarios? Any ideas for what I can offer a private Investor?
B) Will my mortgage/association fees be considerably more than my rent payment now? I ran the numbers through a mortgage calculator and the mortgage/tax/insurance payments come out to about $1,600 so even if the association fees are 400-500 a month it still almost exactly my rental payment.
C) More dues and fees. Ive heard that condo boards can pile on fees for services to the property randomly and that is something I am quite scared of. My LL did tell me that this current project is coming out to so much because it consists of improvements that have been very long over due and that it should never be this much again. But you never know.
