All Forum Posts by: Pat Muller
Pat Muller has started 1 posts and replied 8 times.
Originally posted by @Nicholas L.:
@Pat Muller "exceed mortgage plus taxes" still isn't enough. Post the expenses vs. expected rents.
Expected rent is:
$2,100 - $2,300+ for 2br/1b
$1,200 - $1,300 for 1br/1b
Mortgage + taxes + home Ins: $2,444
Originally posted by @Theresa Harris:
The rent would cover mortgage plus taxes, but that's all. Tenants would pay for all the utilities and the mortgage and taxes are 80% of your income. The last part makes me wonder if you'd even get approved for a mortgage. Have you talked to a bank as most wouldn't lend you money if the debt to income ratio is that high.
Surprisingly I was, which made me wonder the tight situations others may be finding themselves in, but that’s another discussion. Also, rent for both units would exceed mortgage plus taxes
Originally posted by @Nicholas L.:
@Pat Muller if it is accurate that "market rent would be about the mortgage payment + taxes," then this isn't a good deal - there are many more expenses than that to consider. Pass.
it would be accurate for the one larger unit, both units would exceed mortgage + taxes. At the end of the day I am not looking to cash flow huge, it’s a HCOL area so just locking in a good property for an appreciation play is good enough for me at this point.
Originally posted by @Caleb Brown:
Seems very risky. Yes prices will continue to soar and rise but what happens if you have large mechanical items pop up within the next 6 months and you can't cover it? What happens if it gets trashed? It's great to go all in but there's no point in rushing and putting yourself in a position where you'd be out of REI for awhile. Have you thought about partnering? That way you can tackle them both.
Given the market I feel like there’s no way to get any skin in it at this point without making a relatively risky move. You said prices would continue to soar most likely, therefore it seems you’re saying I should either make the risky move, or be priced out of the market entirely; partnering is unfortunately not an option.
Originally posted by @Bill B.:
I don’t think I’d buy in any market that “went down the tubes” during covid. Unless you mean prices skyrocketed.
I think your stuck between a rock and a hard place. I believe there is less than a 10% chance prices will be lower anytime in the next 20 years than today in most markets. (Non-inflation adjusted.) You really have to weigh inflation risks against the Fed raising interest rates. The problem is for you that if prices drop because interest rates climb, your payment will stay the same. So you have to hope for no inflation and no interest rate change
But you’re talking to big a stretch of your finances for me. Do you have friends/relatives/coworkers who would go in with as an investment? Can you move to a cheaper, lower tax area and do your job or an equal one?
yes, by down the tubes I mean prices skyrocketed.
I am a little confused, you say a problem would be if interest rates climb my payment would stay the same. Wouldn’t that be a positive since I locked in a lower rate?
unfortunately no one I would feel comfortable investing with is in a place financially to do so. Not to mention I would prefer not to get into an investment that’s split with someone else due to the complications it can potentially add down the road.
aside from this, I would have to invest out of state where homes are much more affordable, which I have heard mixed reviews about in my research
Consensus on real estate forums as well as every news article that comes out. Does it mean they're all right? not at all, but it is certainly compelling as hell. I've lived through the '08 crisis, which I was not even aware of at the time, that's about it.
I agree it would be tight, and things might cool allowing me more options, but there’s also the consensus by many that it may not cool and instead continue to rise for years to come, which has me feeling like I should pull the trigger. So many uncertainties
I live in a HCOL area and there is a small two-family that is currently available to me for short period and I was in the market for a multi as my first purchase when COVID hit and the market went down the tubes. However, it is slightly out of my budget, like I would have to rely on the rental income to comfortably make the payments considering the payment and property taxes are about 80% of my income, although luckily I have a place to stay rent free if I had to rent out both. As stated it is a HCOL area in the north east and getting a tenant shouldn't be a problem and market rent would be about the mortgage payment + taxes, in fact they Air BnB'd it out this entire month since their buyer fell through. Nevertheless, even though I have a healthy E-Fund, I don't like the idea of having to rely on a tenant and/or tap into my savings whenever I do not have one, but I may not get this opportunity again, so I am really struggling as to whether I should take this risk.
Any insight of course, is greatly appreciated.