Reality check
Hi: I found this forum using Google and have been reading for the past few weeks. Now I would like to ask a question and am hoping I can learn from your experiences.
I would like to invest in and rent out a 1 bedroom apartment in NYC, costing around $300k-350k, for say 5 years. I want to do 100% financing (interest only if possible) but I will pay closing costs. Being a CPA I have done all the numbers and I can't get a positive cash flow. In one example I would have to cover the difference between rent and costs to the tune of $500 per month (which I can afford to do).
That said, if the market goes up even 6% a year I can still make a good return overall in 5 years upon sale of the property, even if I don't have cash flow.
So in essence I would be investing closing costs then $500 a month, in order to get a good overall return in 5 years.
Questions are:
1. Will banks lend money on a property where I am having to make up the rent each month to cover my costs? I can show I have enough income to make up the difference.
2. Do you think 6% growth in NYC is realistic over the next few years?
Look forward to hearing your opinions.