I wanted to share one of my clients and fellow BP member's success story on their first real estate transaction, utilizing primary residence financing and house hacking.
Location: Mount Pleasant, Washington DC
-Very desirable neighborhood and not many condos available for sale at any given point
Asset: 2 Bed/ 1 Bath Condo 800+ SQ FT. Private Patio
Purchase Price: $455,850
Seller Credit: $13,850
Net Price: $442,000
THE BEST PART: Appraised Value: $520,000
He made $78,000 in equity the day he signed on the dotted line. $76,000!
He wanted to decrease his monthly payment so he put 10% Down and rolled paying off his college loans into the loan to meet the DTI criteria.
Interest Rate: 2.85%
Mortgage (PITI +HOA) = $2,473/month
Since he bought the house with so much equity , his PMI will fall off at 6 months and 1 day (banks seasoning period) , saving him another $135/month
So in 6 Months his monthly payment will be $2,338/month
Projected Rents : $2,650/month
He will live in this unit for 1-2 years and already has a roommate that is moving in July 1st with a lease of $1,100/month. He will be living in the unit for $1,373/month for the first 6 months and when the PMI falls off, he will be living for $1,238 in Washington DC........
So he bought an asset with around $52,000 down (10% down and college loan payoff), has around $312 of gross cash flow once he moves out, AND will be living for less than $1,300/month all while building equity. Oh yeah I forgot , he also made $78,000 on the purchase!
This is how you buy value in Washington DC
Congrats @Cassidy Burns !
Thank you sir @Chris Mills
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