Hey guys! I have property Under contract for $215,000. It’s a 5 bed 3 bath 2,050 sq ft home built in 1995. It’s a stand-alone home part of a gated community built in the 90’s. It’s on the same road as the high school and just 1 block from main-street.
Originally I thought it would appraise for 240-250k, but the appraisal just came back at $215,000. The appraiser used only comps within this community mixed with apartments, condos and townhomes that share a pool, tennis courts, all maintenance exterior and RV parking. I should have foreseen this with the fact that I won’t own the land.
I have about $13,000 in credits with CC and my real estate commission. My all in monthly payments, including tax, insurance, HOA fees in about $1,100. Rent comps run $1,600-$1,900 (updated at $1,900). The cash flow will be good. But my equity won't be where I thought. Should I still buy it?
I am in the real estate for the long run. Buy and hold.
I make about 84k as a career firefighter. And just got my real estate license and make about 5-7k a month for the past 6 months.
I am using a HELOC on my primary residence for the down payment. The HELOC payment is $108.
what do you guys think?
I get it for flips were you make some money and then retire the heloc.
read fine print of heloc they can be frozen or called.. they are not fixed term loans.
so just be aware of all aspects of using those funds for long term buys
@Kole Halladay go back to your realtor and have him find new comps that work .or go back to the seller and get the price down .
@Jay Hinrichs thanks!
I plan on using it temporarily, then paying it off over the next year or 2. But I will go back and read the fine print. Thank you!
@Kole Halladay , Appraisers like to come in at value. It's a big game. The odds of it truly being worth exactly what you agreed to pay are very slim, but most of my deals are like that. They appraise magically at contract price or just slightly above. They really don't have anything to gain by saying it's worth more. Their job is to prove to the lender that it's worth the selling price, not more. They have no incentive to appraise it higher.
You can dispute the appraisal report. I had to do that for one of my investment properties. Have your agent help you find some comps to support your value and provide that to your lender. There is always to make a deal work for you.
Congrats @Kole Halladay !!!!!
@Kole Halladay Great job and welcome to BP!