Buying my first house!

1 Reply

Hey BP, Im 26 years old and am Interested in yout opinion .. I’ve been a member for close to 2 years. This whole time I’ve been looking for a duplex to begin house hacking close to where I work. It has not worked out so I decided to switch it up and house back in a single family home. The area I’m buying in is woodinville, wa where th median single family home goes for 550k.. I found a 4bd 2bath 1997 manufactured home with the lot that would sell for $375 ARV. I submitted an offer in for 300k and reached mutual, needs new shingle roof and new carpet . The total cost to live there with PMI, taxes, P&I, insurance and how come out to be $2089. I will be renting out the master bedroom for $800 a month so that would leave me with $1289 out of pocket. Down payment wIth FHA loan is $10500. $7000 grand for new roof and flooring. So total $17500. I know that after a year I want to rent it out and possibly look for a new home. It would rent $2600 a month which is around $511 over all my expenses. Does this seem like a good deal or should I keep saving. My biggest issue is I have a wife and daughter and we currently own a 500sqft 1bedroom manufacture home on rented lot and I pay $700 a month. We need more room and I feel my $700 could be going to equity. My goal is cash flow buyIng and holding then sellIng Isnt Ruled out for me. If you were in my position with 20k I’m savings what would you do? My biggest fear is putting down all I have saved into this . No one In my Family has boughten a house so I have no mentor to go to. No car payment , some credit card debt and regular bills is my liabilities. Thanks for any feed back.

$511 after expenses would probably turn into negative cashflow when you account for vacancy, repairs, CAPEX (although that will be lessened if you are replacing the roof upon purchase), and property management. Also, water/sewer/garbage would need to be accounted for unless the tenant would be paying it. I would recommend running the numbers through the BP calculator and seeing what your cashflow and ROI would be once you move out. Do you have specific cashflow/ROI minimums you look for?

Personally, with $20K in savings, I'd be hesitant to fork over $17.5K on this. I'd want at least 6 months of reserves. 

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