What is everyone's opinion on buying a house at the current market price, but you can put 20% down, and the rent covers the mortgage? Also, you don't have time to look for deals.
If you can get it below, do so. This market is leveling off, there is no reason to be paying over at this point!!! If the numbers work go for it. You can always refinance to get the payments down and make it workable.
If you can get it below, do so. This market is leveling off, there is no reason to be paying over at this point!!! If the numbers work go for it. You can always refinance to get the payments down and make it workable.
If you can get it below, do so. This market is leveling off, there is no reason to be paying over at this point!!! If the numbers work go for it. You can always refinance to get the payments down and make it workable.
Thanks for the advice. What if you had a job that could cover both mortgages and expenses - your home and the new rental property?
If you can get it below, do so. This market is leveling off, there is no reason to be paying over at this point!!! If the numbers work go for it. You can always refinance to get the payments down and make it workable.
Thanks for the advice. What if you had a job that could cover both mortgages and expenses - your home and the new rental property?
That's great that you can over both mortgages and expenses with your day job. Lending institution want to see reserve funds to cover at least 6 month mortgages. I assume the 2nd mortgage is going to be a rental. Do the math to see if you are cash flowing on it after all expense and mortgage is paid.
Real Estate Consultant · Seattle, WA · Member since 2022 · 1k+ posts · 784 votes
4y
I think the question here is - I have money but no time, I found something I like and want to just pay the asking price. Is that ok? The short answer is yes. The longer answer depends on whether or not that purchase is a new primary residence or a vacation second home or an investment. If new primary or vacation and you absolutely fell in love with it, go for it. Depending on how much you want it and the comps I might even overpay if i really really want that to be my next home/vacation getaway . Be mindful that while the market is softening and the bidding wars aren’t as frequent we are still seeing people underprice their listings in the hopes of creating a bidding war. If it is an investment (and people with money have money for a reason), I am sure you’ll run the numbers to make sure you are parking your cash properly regardless of how much or little time you have or hire someone to analyze a deal for you.
Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
4y
Theres nothing wrong with buying off MLS. It also makes it easier to finance with often much better rates/terms if can use conventional financing. But that doesn't mean you can just buy any property, you still need to find something selling near the bottom of comps. For example if most 4 units are $500-700k you want to get one close to $500k as possible. Almost all my clients buy off the MLS and the deals end up very profitible.
In the low income/blue collar areas off market is a bit more popular as more motivated seller type deals but in my market chicago north side nearly everything 4 units or below is on market or sometimes pre-market pocket listings.
Nothing necessarily wrong with it. I have seen a big push for having only rental properties that cash flow. However, the "old" method was to just purchase a property and make sure the rent covers your fixed expenses. Leverage and appreciation should be your friend and you will make much more than some "cash flow" in the long run assuming you have picked the right market/location. Good luck.
Investor · Chicago, IL · Member since 2018 · 352 posts · 176 votes
4y
Investing is not so much an issue of right and wrong as it is a question of better and worse. The more you educate yourself and the more deals you look at the better deal you are likely to find. I'm not sure why you say you don't have time to look for deals, you can do literally do that from your phone while sitting on the toiet. Then again, maybe you are making high 6 or even 7 figures a year and your work time is worth more than worrying about finding a great deal? I would suggest finding an investor-friendly agent who can save you some time and provide guidance. The first property I bought I went with a random agent I met at an open house and, though he was a nice guy, he did not help with the due diligence at all (probably because he did not know how to). Luckily I bought when the market was a lot lower so ended up making money anyway. Hope that helps!
I think the question here is - I have money but no time, I found something I like and want to just pay the asking price. Is that ok? The short answer is yes. The longer answer depends on whether or not that purchase is a new primary residence or a vacation second home or an investment. If new primary or vacation and you absolutely fell in love with it, go for it. Depending on how much you want it and the comps I might even overpay if i really really want that to be my next home/vacation getaway . Be mindful that while the market is softening and the bidding wars aren’t as frequent we are still seeing people underprice their listings in the hopes of creating a bidding war. If it is an investment (and people with money have money for a reason), I am sure you’ll run the numbers to make sure you are parking your cash properly regardless of how much or little time you have or hire someone to analyze a deal for you.
Theres nothing wrong with buying off MLS. It also makes it easier to finance with often much better rates/terms if can use conventional financing. But that doesn't mean you can just buy any property, you still need to find something selling near the bottom of comps. For example if most 4 units are $500-700k you want to get one close to $500k as possible. Almost all my clients buy off the MLS and the deals end up very profitible.
In the low income/blue collar areas off market is a bit more popular as more motivated seller type deals but in my market chicago north side nearly everything 4 units or below is on market or sometimes pre-market pocket listings.
Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
4y
@Oddy Kham I'd feel a little better about saying yes if you had said "covers PITI" rather than just mortgage. As a strategy it's fine, but your mortgage isnt the only expense to cover. Though if it appreciates you can take the losses against your cap gains
What is everyone's opinion on buying a house at the current market price, but you can put 20% down, and the rent covers the mortgage? Also, you don't have time to look for deals.
Before we make an offer on a home we usually check the following: 1. What does the owner owe to the bank; 2. Have the recently sold comparable properties sold below, at or above the list price. 3. What kind of rent is possible. Using that data then we make a decision on what we should offer.
Regarding not having enough time to look for deals- Higher an agent.
@Oddy Kham I'd feel a little better about saying yes if you had said "covers PITI" rather than just mortgage. As a strategy it's fine, but your mortgage isnt the only expense to cover. Though if it appreciates you can take the losses against your cap gains