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Cole Stamer
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Ready to buy my first investment property

Cole Stamer
Pro Member
Posted Apr 8 2024, 15:04

My wife and I started saving and building our credit a year and a half ago after talking to a lender to figure out our trajectory to buying our first property.

With our credit score in the high 700s and our savings just over 35K we reached back out to our lender and got a rough estimate of where we stood as far as borrowing power. She estimated we could loan up to 500K on a mortgage with 5% down at a 6.8% interest rate. 

We decided to take 2 weeks to study the market to see if there were multi family properties or single family properties with multi family potential even available in our price range.

We found a duplex in the roseville area that we are very excited about. It currently has 2 tenants that are severely under paying in rent. Our plan would be to have the seller evict them, take out a short term loan to remodel the first side quickly and live in the 2nd side for a year all the while slowly remodeling the 2nd side as well. 

However, after meeting with a friend who has real estate experience he mentioned that he predicts in about 12-18 months there will be a downturn of the market and an influx of foreclosures due to the pandemic forebearance.

I now feel like our momentum and excitement has come to a screeching halt and I am unsure of whether or not to invest in this market.

I understand long term the market works itself out, however, if I bought this multifamily unit on my current income, I cannot afford for the rental market to depreciate as well which is my fear.

The mortgage would be about 4K. After renovations our plan would be to rent out one side for 2K which leaves us paying 2K as well. We are a single family income bringing in almost 100K per year.

Any thoughts?

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