My First Property, should I buy??

Question

Richard Sherman · Answer

@Medriand Arnold does that mean you get to live for free while the other side pays the mortgage?  Doesn't get much better than that for the 1st deal!!

Medriand Arnold · Answer

@Richard Sherman

I plan on living in one of the sides for the duration of the year that you have to let mature for the FHA loan, this also gives me an empty vessel so I am able to make my repairs without working around someone. I am looking at the comps in my area and renovated duplexs that house 2/1s are going for the 140k range.

@Nathan Churchill

I have never thought of that spin on it, that would free up a lot of capital and also build my businesses credit! Sounds like a plan!

@Joseph Back

I am already in the thick of the project and hopeful wishing led me to believe that I wouldn’t need to get the 203k loan, I am going through with the regular FHA loan as of now and using credit to make the repairs.

Joseph Back · Answer

Have you checked out any subject-to or 203k loans. Both allow you to get money from bank for repairs. 203k is through FHA and has some hoops to jump through but could be exactly what you need. Subject-to loans are usually offered by local banks and will allow you to get loan for what the property would appraise for after repairs, basically you tell appraiser everything you plan to repair and he factors that into appraisal allowing you to get loan for those repairs.

Nathan Churchill · Answer

I was in a similar situation with my first property. Since it was my first property and I started a business I got a new business credit card with 0% interest for 9 months. I used that for all of my rehab costs and continued to save money from my W2 job. Over the course of the next few months I saved up enough to pay it off between my own personal savings and cashflow from the rental. It worked out well for me. I just made the minimum payment every month until the interest kicked in and then I paid it off in full. Now all of that savings is building up for my next property.

Richard Sherman · Answer

@Medriand Arnold Do you think the 140k value is after repairs or if you did the repairs would it have a higher value?  I LOVE multi-family, and duplexes are a good way to get started.  If you are in it for the long run, this could be a very good way to get started.  Are you going to live in the other side?

Richard Sherman · Answer

@Medriand Arnold Good work!  Do the repairs need to be done right away or could you do some basic repairs, get it rented and do the remaining out of cash flow?  That is ALWAYS my goal, to have the property pay for its own repairs!