Just Bought My First Property Ever In Denver
Just last month I purchased my first property in the Denver Area! It is a very exciting time. My partner and I purchased a 1 bedroom condo together for $154,500 in Northglenn, CO. We used FHA financing so this will be our primary residence for at least 3 years, according to the terms of the loan.
The bond program I used through my lender covered a considerable amount of the closing costs. I was given a $7,586 grant that went towards the 3.5% down payment and closing costs. We bought the home at the asking price and negotiated to pay half of the closing costs, not all of them.
Price: $154,500, Sq Feet: 890, 1 Bed/1Bath, 1 Car Garage
30 year Fixed Rate Interest: 4.5%
Taxes: $1192/year , $99.33/Month
HOA: $1800/year, $150/month
Principle, Interest, PMI: $873.48/month
Total Mortgage Payment: $1122.81
Earnest Money: $1500
Inspection: $250
Appraisal: $450
Home Warranty: $175
Closing Costs: $22.80 (Left over money from $7,568 grant after down payment covered a majority of the closing costs)
Total Money in the Game: $2397.80
My Half: $1198.90
Partner's Half: $1198.90
Since it is in FHA loan our lender told us they MIGHT come after the $7,568 grant if we ever sold the property or rented our the property within the first three years. His emphasis on the word "MIGHT" kinda through me off. Sorta implying that this could be done without them finding out. Has anyone else attempted this?
I was kinda bummed that we ended up with a 1 bedroom. I was approved for $200,000 by the lender and everything in that price range wasn't very appealing in the Denver market as of now. Since this our primary residence I was more concerned with find a place I enjoyed rather than living in a 3/2 property that cash flows.
We don't plan to live in this condo long term, so I would like to rent it out once the 3 years is up. However, I believe that would be difficult being a 1 bedroom. I'm not sure I could get more than $1300/month? Although rents have been increasing quickly in the last year, I'm not sure that will be sustainable three years down the road. We only have spent $2397.80. If I can cash flow $100/month that would be $100*12/$2397.82 = 50.04% ROI? (Not including future expenses, repairs, and upgrades)
In short, am I calculating the possible ROI Correctly?
Was this a good deal?
Do you think I'd have trouble cash flowing a 1 bedroom when the Denver market as cooled off?