Hey BP family! I have another question for you all and I'd love to hear some insight on some more outside views before I make my decision.
I'm about to buy a property within 5 miles of the major university campus and the property is going for 110k. It's 3 bed 2 bath and incorporating all of the #'s plus PMI and Escrow due to qualifying for an FHA loan. With my down payment as well, my monthly mortgage payment will range from $670-$700 a month. I have 2 renters on stand by ready to go at it for $400 a month so with their portion, I'll have the rent and then some. I still work full time at my job while attending school full time, so any excess cash flow after paying all other bills will go to improvements on the home. ($2,200)
What are some other things that I should look into before proceeding further with an offer on the house?
Anything else I should focus my money in other than making improvements whle living for free?
Thank you for taking the time to read this, I hope to hear from you all soon.
It wasn't quite clear from your post, but are you planning to make this your primary residence along with two roommates? Will you be able to cover the mortgage payments and other expenses if 1 or BOTH of the roommates move out? For how many months could you afford to live alone?
Is there any deferred maintenance? Old ac, old plumbing, old electrical, old roof? The cast iron sewer lines in those Tempe homes from the 50's can be a real nightmare.
Sorry about the lack of clarity in that post. I'll be more than happy to clear anything that was misunderstood. I afford to make the mortgage payment by myself no problem, but with the 2 other tenants I can have their share pay the mortgage payment with some extra cash. Then since I don't have to pay anything out of my pocket for the payment, I will use all my pay checks to make improvements on the home to increase the value.
I will look further into that with my realitor along with the seller. Anything else I should look into? Thank you again for commenting.
It sounds like you have a good grasp on the numbers. Just make sure you keep a rainy day fund for unexpected major repairs (new roof, new AC $4-6k, etc).
Get a good home inspector, and consider having a separate plumbing inspection to scope some of the sewer lines. I had an ancient sewer main collapse at a home in Tempe and had to trench the entire backyard.
Don't go overboard with "improvements", and make sure they fit with the neighborhood and price point. There's no need to turn a $100k home into a $300k home.
@Danny Weber Go for it! Your two renters will already cover the mortgage, PMI and property taxes.
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