First-Time Buyer on the Fence — Condo Financing Challenges

[Emma Hogan]

Hey BP community! My partner and I are under contract on our first property ever (not just first investment property — first property period), and we're torn on whether to move forward. Would love some experienced eyes on this.

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**The Property**
Student housing - 4 bed / 2 bath condo, ~1,096 sq ft, built early 1990s
Purchase price: ~$200,000
Intent: Long-term rental / investment property

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**The Plan (and the Problem)**
We don't have conventional financing lined up in the traditional sense. The strategy was:
1. Purchase cash using a short-term family loan 
2. Do a delayed financing refi into a conventional loan 6–8 months later

This is because if we financed now just me and my partner we would need to out 45% down, which doesn't make sense.

But we're running into friction on the financing side and it's making us question whether to push forward or walk away.

Some of the complications we're aware of:
- Investment property + condo = high interest rates (we're seeing ~7.25–7.75% realistically)
- Lenders are flagging potential warrantability concerns — if the complex has too high an investor-to-owner-occupant ratio, we may not qualify for a conventional loan at all and could be stuck with a non-warrantable condo loan

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**The Numbers (Best Estimate)**
Purchase: $200,000 | Down: $40,000 (20%) | Loan: $160,000
Estimated rent: $1,900/month
Estimated monthly expenses: ~$1,940–$2,040
Projected cash flow: -$20,000 year 1, negative cash flow up untile year 10 (between 2,000-300/year).... roughly - $160–$410/month... then increases to $40k/year at year 35
Cash-on-cash return: -33.6% in yea 1 and -8.2 - 1.5% until year 10 then goes up

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**What's Making Us Hesitate**
- This is our very first purchase, ever. No prior homeownership experience.
- The financing path feels uncertain and complicated for a first deal
- We're worried about getting locked into a bad loan if delayed financing falls through or rates move against us
- Not sure if the juice is worth the squeeze on a deal with this much complexity for beginners

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**Our Questions for the Community**
1. Is this level of financing complexity normal for a first deal, or a sign we should pump the brakes?
2. Has anyone done delayed financing with a family loan — were you worried about being able to refinance?
3. Our lender said there is a 85-90% chance we will be able to refinance, but we can't confirm if that stays true 6 months post purchase. Has anyone dealt with that?
4. For those who started with a condo as your first investment — do you regret it or recommend it?
5. At cash flow being negative the first 10 years, especially with the unknowns, is it worth it?

Any and all advice welcome. We want to make a smart decision, not just an excited one. Thanks in advance.