#AskBP Hey there BP, I have ten thousand, and I want to know if I should put that down as down payment on a 60000 dollar duplex, or just put half down? The duplex does need a lot of work I would say at the most 15000, to make it look really good or just decent 5000. thanks, also I'm only 19 turning 20 in six months. And my credit is 710 but not enough history. So I don't know how good that would get me on interest rates. And it's located about half a mile from a University Area so it's a good location.
I would consider who you want to rent to. If your intentions are to rent to college student, then I would not encourage you to put in a high end products but items that are durable and can take a lot of beating.
In regards to the credit score... If that becomes a problem, try talking to your parents about co-signing on the loan. Usually credit report and interest rates are not correlated. But they may not give you a loan at all if your credit isn't good enough.
According to my mortgage broker, your credit score is directly tied to the interest rate you get. @Colin Smith has a good suggestion of trying to get your parents or someone with a more established credit score to co-sign with you. And a great suggestion of not putting in high end finishes if you are planning on renting to a college student.
@Jose Sarabia You could try looking for cheap properties on craigslist. Here in Chicago there are houses under 50,000 which have great cash flow but usually not the best tenants.
If you find a property on craigslist (FSBO"For sale by owner), you can negotiate terms and give a 5-10 % down on a 40K-60K property. Don't expect a great deal if the property is in decent condition, but generally speaking "C" properties should give you at least 10-12 % cap rate which is great cash flow.
Also, if the property requires a lot of work, most banks won't finance it. You'd probably have to go through a Hard money lender and then refinance the property after 6 months.
@Daniel Moctezuma Thanks, I'll check that out!
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