All Forum Posts by: Rocco Grossi

Very good point guys. Ok so how about this scenario, similar to the one above.

Purchase price 165,000

2 one bedroom units, 1 unit already has a tenant at $700 a month.

estimated mortgage- $1,167 a month

Property is in a pretty good area where I should be able to rent both units out $850-$900. But again, I will be living in one of the units. If I keep tenant in at $700 (she's been there for 2 years already) that leaves $467 a month that needs to be covered for mortgage by me. $467 a month plus utilities, I pretty much would be paying what I currently pay now at an apartment. Is this a bad deal? 

OK so I have been doing a lot of research utilizing BP, real estate agents, and mortgage lenders. With a mortgage being $1,000 or more, how does anyone generate cash flow with that? I've done numbers on a few properties and according to the 50% rule, I would not be generating any cash flow really. Obviously for my first property I would occupy one unit and rent the other unit out of a duplex. Hypothetical scenario:

Mortgage-$1,100

Duplex at $850 per unit = $1,700 for income

According to 50% rule this property would not generate much cash flow. So my question is, how and why is my mortgage so high? Is there anyway to get a lower mortgage? should I shoot for higher income rental markets? I know the 50% rule is just a rule of thumb but I am still having trouble making sense of the numbers.  

Thank you @Ron Averill 

 @John Cimino I am looking more so towards the PA border because I work in PA. My price range is about 140-150 in DE, in PA price range would be lower. I know Wilmington very well, most of the duplexes I've seen in that price range are in not so good areas. I will continue to look and I am also looking in Delco area as well.

Hey everyone, I am looking for a duplex in my area. Are there any strategies that anyone suggests? I have a real estate agent (2 actually) that are looking for me and I also check sites like realtor.com and zillow regularly for listings. I am looking in the northern Wilmington, DE and Delaware County, PA area. A lot of properties that I am seeing are in bad areas, my girlfriend and I will be occupying one of the units so obviously she doesn't want to live in any bad areas and neither do I. If I do happen to see a property I would like to see, do I contact my agent or do I call the listing agent of the property? That may be a dumb question, I am new to bp and investing; I am very motivated to get started!

Thank you @Marcus Maloney ! Now that I am aproved I have been searching the MLS everyday and have rode around through different sections I am looking to buy in. Question for everyone, short sales and foreclosures? Am I able to finance them through my FHA loan? Are they worth looking at?

Update!! Got an email from the mortgage broker and I am officially approved for the FHA loan. Because I am considering either DE or PA to purchase my property, the broker told me what my monthy mortgage CANNOT exceed. She didn't give me an exact number of what the loan limit will be basically because the loan would be lesser in PA than DE due to property tax I am assuming? She will email with more details tomorrow I am sure. I'll have to look into that @carolyn. @Account Closed congrats on the deal! 

With not having much start up cash, I believe FHA is the only option I will be able to take in this manner. Anyone else have any other suggestions as far as financing goes? Thanks everyone for your comments, feedback and advice! Also, is refinancing possible on a FHA loan?

Yes I know what you mean @Marcus Isaac . If I were to buy in DE, I would want to be in north Wilmington, but properties over that way are way too overpriced for my budget. With that being said I might not have no choice but to buy in PA. I just hope I will be able to find what I am looking for. I am doing the work and learning the lingo so I can better achieve my goals. But you have to start somewhere, right? Thanks for the insight @Troy Sheets 

@Ethan Giller 

Thank you so much for your responses @Geetika Casmon @Brant Richardson ! Any other suggestions from anyone on this topic? Or is there anyone in the Wilmington or Philadelphia area who has any adivce? I belive I will only get approved for about 125K or so.

Hello everyone my name is Rocco and I am new to Biggerpockets. Ok, so my plan at first is to buy a duplex, occupy one unit and rent the other. Is anyone opposed or have any advice about this? This would be my first property and I would be getting an FHA loan. Property would be in either Delaware County, PA or Wilmington, DE. PA property tax is much higher in PA than in DE which is definitely something I have been thinking about. I do not have much money to put down on the loan, only the minimum 3.5% and closing costs if need be. The initial plan is to obviously have rental pay for majority, if not the whole mortgage payment. This will give me and my girlfriend an opportunity to save money, then in 2-3 years I would like to purchase another property. I am still new and doing my research to understand the language. If anyone has any suggestions or advice I would gratefully appreciate it. Until then I will continue to educate myself on this business to find out my best starting approach. Thanks!!