Updated almost 3 years ago on . Most recent reply
My First Rental Property!
I purchased my first rental property (duplex) a couple months ago for 100k. I used a construction loan to purchase the property because it was in need of some serious work. Going into this I didn’t realize if you use a construction loan the bank would loan out 80% of the apprised value of the home. Fortunately for me it appraised for upper 150,000s, meaning the bank would loan me the 100k without any of my own money down and they’d finance up to 22k in repairs. I ended up fixing the place up for 14k and was able to actually pull 5,500$ out after refinancing. To summarize I didn’t put any of my own money down ZERO, the bank paid up front for all the repairs, and I was able to pull 5,500$ out! So after my original closing cost on the construction loan, appraisal, and home inspection I actually ended up putting 0$ dollars into this deal. The property currently brings in rents of 2050$ a month and after my management team/expenses are paid I cash flow 550-575$ per month! I’m currently in the process of doing another one with this exact method…has anyone else on here done anything similar?
Most Popular Reply
Amazing deal for your first one! Some lenders will count the rental income towards your DTI soon at a 75% rate. Then after 2 years, most banks will allow for 100% to be accounted for when figuring DTI. Keep it going!