To Buy or Not to Buy

3 Replies

I am a new investor in Texas. I was recently approved to buy up to a four plex with my VA Home Loan. I have been looking at duplexes and have run into a big question. I can do a 0% down, 30 year mortgage at 3.75% and pick up any number of nicer duplexes that require no repairs. The only cash out of pocket for me will be closing costs.

The question. My father in law keeps suggesting I find something that cash flows on a 15 year mortgage but I cannot find anything at that price range here. Would it be a mistake to buy a property that only cash flows with a 30 year mortgage?

I would say that anytime you can get into a cash flowing property without any money out of pocket, you should move forward. Assuming the only drawback is the fact that it's a 30 year mortgage (which I don't consider a drawback), then it's free money. Imagine if you had the chance to get into 100 of these with the same terms; you'd be able to retire in no time.

I like shorter payoffs, but you must do what you are confortable with, to play a lttle game, sounds like you are looking for a 1% property and your father-in-law wants to see you in a 2% PROPERTY FOR HIS LITTLE GIRL...hmmm

Ok, the numbers don't really work, but the dad wants to see you out of debt quick and really the only forclosed and bankrupt properties are from debt...hmmm, maybe a wise point to contemplate.

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