All Forum Posts by: Timothy Johnson

Consider this.

Condo Price: 115k
Down Payment: $11,500 (10%)
Expected Rent: $1,100/month
30 year Mortgage at 5%

My plan would be that me and my partner buy this as described and live in it for 2 years. During this time we will build some equity in the house (probably not much). When we graduate (after those first 2 years) we will then begin renting it out. Now the kicker is, we would aim to pay off the property in ~2.5 years.

Once we pay it off we will both have an asset worth about 62k AND monster cash flow from renters.

It seems like this plan would be profitable, yet it doesn't require immediate positive cash flow. Is there something I am overlooking?

So this is my situation. Me and my brother plan on spending two more academic years at a university (20k students). We both want to get into real estate investing, and figure that instead of us both paying ~9k a year either living on campus, or renting off campus. Why don't we spend approx. the same amount buying our own 2 bedroom condo.

If we can find a condo for sale that would run us about the same (or less) than living on campus or renting, wouldn't this be a better opportunity since we will be building equity in our condo rather than paying someone else and losing the money. Plus the fact that we would be able to get our foot into REI.

Second thought, we would plan to move out after graduation but keep the property as a rental property. Are there any specific factors about college towns/renting to college students, that we should be wary of? Be honest guys.

Thanks in advanced!

Good call Justin and I think you are right about trying to flip it quick. This house may just serve as a residence. 20% yikes! how bad is it gonna get?

-Tim

We will try and put some more value in the house this following year and after we will get it appraised to see where we stand. Thanks for the advice!

...a little bit more information. This house is primarily serving as a residence. But we think it might have some rehab potential (1-2 years) considering it has an outdated kitchen/bathroom that we can update and because I think we bought under market value.

Zillow estimates the house to be valued at $248,000. It is by far the cheapest house in the neighborhood, which from what I have read is a good thing. Again the kitchen and bathroom are outdated and will probably be rehabbed. Again we got it for $185,000 through short sale (owner facing foreclosure). Does this help?

How can I find the ARV?

This SFH lingered a couple months on the market and then dropped dramatically due to the possibility of a foreclosure, after it dropped we quickly put it under contract.

Asking Price: 188,000
Price Paid: 185,00
Interest Rate will be 4.8%-4.9%

We bought it with a flip/rehab strategy in mind. It is an older house in good shape with an outdated kitchen and bathrooms as well. The house was purchased in 2005 for $266,000.

Any advice or thoughts?