Memphis, TN · Member since 2020 · 1 post · 0 votes
Ive been pre approved for a 110k FHA loan, but I've found a underpriced, $170 k duplex in a hot area.
To the direct west is the city’s biggest public park and highest home comps, $400k +.
To the direct south is a brand new development that is in the $350k+ and to the north is a high traffic business area and East is a historically lower income, lower comp area, that is quickly being redeveloped (with new market rate apartments coming up. And prices rising). current rent comps for the property are minimum $800.
Should I try to find a way to leverage this or do owner financing? I dont wanna bite off more than I can chew.
@Mathieu White It sounds like it has potential to be a great opportunity, the biggest question you need to ask yourself is whether you can realistically make the payment for a $170k mortgage. In additional to potential repairs, vacancy, and maintenance that will arise at some point. Not to mention often times the terms for owner financing can be less desirable than using a bank. Another possibility would be private money or a hard money lender to purchase the property then refinance once you have it fully rented. I would only do that if I was extremely confident with the ARV after checking with multiple PM and agents. Typically this would be an easy decision but considering you only got approved for a $110k FHA loan increases the risk quite a bit. I hope this helps, good luck with everything!