Bought my first investment - but did I do it right?
This last month I bought my first rental unit. It is a first floor condo that I bought for $50,000, with the help of a private investor. I just rented it out for $935/month and will see some pretty positive cash flow. I only put 20% down (10k) and will be profiting about $4400 a year.
There is a but though. . .
BUT... in order to get the deal done and before the price was raised to market value (70k+) I had to get a cash deal. I am paying my investor 6% interest, while not paying back any of the principal. Essentially I am paying $200/month to the investor + $225 HOA + Taxes. I feel that I am making a great profit for only 10k down, but by not gaining any equity I want to know if anyone sees any problems in this? I am considering refinancing and paying back the lender, but will most likely have to wait 6ish months, but could use my investors money in buying another larger property without putting any more of my own money down. Thoughts? Ideas? Thanks guys!