All Forum Posts by: Jordan Williamson

I've been looking for my first real estate deal think I found it. It is a 1600sqft duplex. 2/1 on each side without a garage. I have a signed contract at $67,500. I would say B- neighborhood.

I am prequalified for FHA funding so it would be 3.5%.

Rent is currently $550 per side, but I will be removing one tenant and the current landlord told the tenants he would be raising rent.

Taxes $884 a year
Insurance $800 per annum
8% vacancy = 1100
1440 maintenance ($60 per side per month)

While I'm in the property (hopefully only a year) CAP rate is 4.89 and when I move out its 9.78 and that is figuring on current rental rate for tenants which is lower then it should be. Plan to raise rent to 575-600 unless keeping the tenant is a problem. The tenant has been there for 3 years and seems like a good tenant that wants to stay.

Inspections are going to be scheduled monday...

How did I do?

I do not intend on speculating on appreciation, my belief is that housing is creeping up in my area but I doubt it will significantly appreciate for years due to rising interest rates etc... I'm looking for reasonable cash-flow in a reasonable area and plan to hold it long term.

Thank you all for the advice, feel free to continue :) I'm learning all I can

Does rule apply to purchase price or loan amount? Because if I was buying it as an investment property I would have to put down 25% and then the debt service would be on 78k. I'm not sure that a CAP rate of 10% is feasible in a decent area around me. If I went towards low income housing areas etc then it would be easy, but I'm not looking to personally live in those areas even if it is just temporary... is a CAP rate of 7.5% bad?

Thanks for the reply Joel! My strategy at this point is to buy and hold not to sell in a couple years. Preferably to owner occ a new property every year until conventional lending no longer allows.

Being a truly new to real estate investor you definitely lost me a bit. What do you mean when you say "78,000 at a 10 cap at 50% annual expenses"? The tenant is responsible for their own utilities fyi.

I can also meet my obligations without a problem without the rental income. I'm looking for more income and building a business in this venture :)

I'm looking at purchasing not only my first home but my first rental investment. I am looking at duplexes in my area with the idea of going owner occupied and living in a side for a year or so and then purchasing again owner occ. I looked at a property today and am wondering if you brilliant fellows will look over the number with me. I'm not sure if I should run the numbers with or without me living there. Obviously the numbers are going to look bad if I'm living in one side eating up half the rent money.

Purchase price: 103,000
Rent: 1300 (both sides rented $650 each)
taxes: 2240
insurance: 1020
Maintenance: 1440 ($60 per door a month, sound right?)
Vacancy: 1300
FHA 3.5%: 3605
Mortgage pmt including mortg ins: $527

How does it look to you guys? It is in a decent neighborhood, but is older being built in 1984.