Advice for first time buyer (deal)
Hello,
My name is Flavius and I am 23 living in Romania.
I listen to BiggerPockets Podcast for some time and I am close to walking into a deal and I would like to have your option on it. I know is not the U. S market but as a concept.
I am selling the 30 sqm apartment I live in for $60k and I want to make an investment in another city where the properties a 15-20% cheaper but the city invested massively into development for the past few years. There are a lot of foreign students coming to university there and is 10 km away from a geothermal amusement park where people spend there vacation.
So far, I have seen 21 properties down there and one of them got my heart and my eye. It is an old apartment that has a common garden with another 11. The property is 8 minutes away from the city center and 4 minutes from the town hall. It is very close to transportation and 8 minutes in the opposite direction there is a supermarket and will be a new shopping center in 2 years.
The property is 125 sqm and I want to divide it into 4 small apartments to rent for students and/or your families. There will be 2 x 1 bedroom apartment (38sqm) and 2 x condo apartments. The property has the possibility to build another level on top of it when I want it.
In terms of numbers here it is:
Property price: $55k (was $60 but will full money down I brought it to 55)
Renovations with equipment for all 4 apartments: $35k-40k
Income: 2 x $320 + $270 + $220 = $1130 monthly
The money from the renovations will be taken from the bank: $270 loan/monthly
Income tax is 3%: $406/year
Rent I need to pay once I sell my apartment: $350-$400
Roughly will let me about $800 a month.
Questions that I have:
1. What do you think about the deal?
2. Should I pay the loan faster or let it go on and on?
3. Any more advice?
PS1: the condition of the property inside is not well so it needs renovations but it also has a 20sqm space in the basement that has the entrance from the main street and it also has 2 small windows so I assume I can rent it out as office space for about $150-200.
PS2: I plan in a year from now to start construction for the upper floor where I can make either 3 bigger apartments or the same as the 1st floor. Based on constructor estimation will cost me about $40k