First time Home buyer looking to Invest

5 Replies

Hi All,

This is my first post in this group. I am interested in buying a property( ) using a bank loan and with a  15% downpayment . My main focus is to buy it , rent it and put the house in market after 1 year. I have  a budget of $200k-$250k and I am looking for 1 or 2 bedroom around Long Beach, CA ( Southern California). Is this a good diea to buy using banks money and rent it ? Can i still save some taxes at the end of the year ? I would be happy even if I break even and I do not have to pay mortgage using my own money. What things I should keep in my mind when I go with this approach?

Thanks in advance,

Ro

Hi Rohit

As a relatively new investor, about 6 years now, I've only financed investment properties with 25% to 30% down so that I avoid PMI. Non owner occupied loans I think are 75% loan to value (LTV)

Maybe if your single and don't mind living with a roommate buy a place as owner occupied for 5 to 10% down then rent the other room to reduce your cost?

Good luck

Thanks for replying Alex. I am married so I can't share with a roommate. By 75% you mean I should try to put a downpayment of 25%-30% atleast so to pay as less on mortgage as possible? Also, If I make a higher downpayment , do I still need to take an insurance? I am veyr new to this field so please ignore my naivety :) .

Ro

@Rohit Kochar ,

The bigger your down payment the more a lender will reduce the requirement of mortgage Insurance (PMI). Also if you have the money why not put a bigger down payment down as this might be your first or one of the first properties you buy. The lower your payment the easier it will be to pay your monthly cost of principle, interest, taxes, insurance, maintenance etc. That should make things easier on your nerves and allow to think more patiently, thoroughly and calculatingly your next move.

Not everybody is the same, some people are ok with taking higher risks, some people have easy and quick access to other financial sources such as family, friends, associates or some connections and some have to do most things on their own. Try to look up Real Estate Investment Associations near and around you and make it a point to attend some meetings, have conversations with existing members, ask questions, learn what you can, expose yourself to other investor's experience, knowledge and also problems. The more comfortable you get to feel about real estate, the more you understand it, the more clear you will see what direction is possible for you even advantageous for you or simply what fits with you, your life style and your own personal financial picture. 

@Rohit Kochar - I see this post is a bit old, but just in case you're still wondering -- Even if you make a larger down payment, you will still need to locate and pay for home insurance.  

@Rohit Kochar

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