Need Some Advice ...
Hey bp , I recently had a conversation with a friend who recently became a realtor. He was informing me that the int. rate on a mortgage loan might possibly reach up to 7-8% in 3 years. We also discussed my goals and plans in REI. I formulated a 2 year plan to save 20k , improve my credit and acquire all the knowledge I possibly can. My plan is/was to purchase a tri plex or quad plex and occupy one unit and rent out the remaining units enough to live rent free, cover expenses , and still have a positive cash flow.I plan on financing this purchase with an fha loan which to my knowledge only requires a 3.5 % down payment. I also kept in mind that even though 3.5 % is only due I still have a closing cost assuming I won't be getting a loan that has a no closing cost fee which would increase my int rate. I also understand that my cash flow may decrease to due pmi. I planned on opening an escrow account to avoid writing a big check for taxes and insurance when that time ia due .So say for instance I purchased a home for 100k with an fha loan 3.5 % or $3500 will be my down payment. Factoring in closing cost which consist of attorney fees , application fees , appraisal , carrying cost ,points ,.etc. I'm possibly looking at maybe another $3000. Which brings my total to $6500 and I haven't included possible rehab cost. After purchasing my first home and 2 years have gone by and I've learned even more ,I plan on flipping one to two houses a year. I planned on using the cash flow I've saved with my first purchase plus earned income for the down payments. I've been interested in rei for quite a while now but I've recently decided to start reading and studying rei. I on plan taking courses and going to seminars soon. If anyone has any advice or anything I should incorporate in my plan please free to share. And to add I'm an autodidact so I enjoy the pleasure of learning. Thanks