I am new to the site and have been overwhelmed with the wealth of information available on this site. I will be finishing school in December and would like to pursue real estate investing part-time to create passive income for the future. I'm sure I have read the same books as most but feel it is now necessary to network and bounce questions off of other knowledgeable colleagues. Currently I am building a business plan of sorts and need to know the steps to take. I plan on offering help to investors seeking properties in the Pittsburgh area in hopes of retaining worthy information (mentorship perhaps).
The next thing for me is to structure my finance plan. I need to know how much I need to start out. I want to buy and hold properties and plan to start at the beginning of the year. Can someone offer advice on assessing start up costs? I know it is expensive for lawyers, insurance, surveyors and such. I just wanted a rough estimate so I do not get myself into trouble off the start.
Any response would be greatly appreciated.
Thanks, Jarred Smeltzer
Pittsburgh should offer a plethora of investing opportunities with the hydrofracture industry going nuts! Do you have any home improvement skills? I would say you'll need about 10K to pull off a 50-70K purchase. Though I've heard BoA is back to their old ways if you can declare owner occupied. Basically 3% down and eligible for 6% sellers concessions. So if you line that up you could get in pretty cheap.
title insurance: 500
attorney for closing: 350
year premium of insurance: 800
taxes due at closing: 1500
3% of purchase price: calculate
cost of rehab: calculate
cost of holding during rehab: calculate
I shoot for 20-35% cash on cash return.
Happy hunting! And you've gotta play to win! So start making offers :D
"Though I've heard BoA is back to their old ways if you can declare owner occupied. Basically 3% down and eligible for 6% sellers concessions. So if you line that up you could get in pretty cheap."
I have not had the chance to read into this so can you offer a quick note on what you mean by declaring owner occupied?
Anyways thank you for the insight. It is greatly appreciated.
Tell the loan officer that you will be living there as your primary residence. That way you are eligible for low $ down (3%) and 6% sellers concessions to help with closing. If the purchase price is 10k, you offer 10,600 with 6% sellers concessions and at closing the seller gives you the 600$ back to help you offset closing costs. You're essentially financing more of the purchase than you could otherwise.