Hello everyone! I need help buying my first rental property! I thought I would try here for some help, the worst someone can say is no.
About the deal, I have someone all ready to move in. They want to do a rent to own situation and take responsibility for most of the repairs themselves. The tenant is an Army buddy and his wife who I trust. The house is located in Montgomery Al for about $69,900 (I'm going to try to negotiate down) tenant will pay 550 per month for a total of $75,500 for the house overall.
The description reads it as a 3 bedrooms, 2 bathroom home sitting on 2 acres. The living room has gas log fireplace, Bedrooms are a split floor plan with the master bedroom being on opposite side of home from the other 2 bedrooms. Needs some TLC but still a great little place to call home.
My problem is, though I am financially responsible, my ex did a number on my credit. I need help finding a money partner who can help with the down payment for the loan or who can buy it for me and I can create a mortgage with that person. I have no problem will paying back more on top of what is borrowed if not too much. I also am open to suggestions from people more experienced than me, on how I could buy this house.
I've tried to look this property up on the county assessor but nothing is popping up for me. Same with Search Comps.
I know I might get bashed here, but you don't know until you ask! Plus I have a thick skin from the Military!
Bad Wolf Properties LLC
A warrior never worries about his fear.
Isn't $550/month a bit too low?
At $70k house, I would assume the cap rate should be closer to 8%.
At $550 a month, you're probably in the negative cash flow.
I do not have enough info to give you a better analysis.
Income: $550x12 = $6600
Expenses: half of your income: -$3300
Net Income: $3300
Cap Rate: $3300/$70k = 4.7%
Net Income does not cover debt. Maybe someone else can share some light.
I am in Montgomery area and average rents here last month were $790. I am a private money broker so I could probably find you funds if the numbers work. Look like you definitely need higher rent for this project to cash-flow.
Hi Andrew Howell what kind of terms are available on the private money funding nothing exact just interest, points the usual stuff. Thanks
I buy the property first and worry about rent to own option later. Having said that you are the only person in several years wanting to do that when home prices are going up. You are losing the equity by do so.
I think you are ahead of yourself. Take your time getting an approval first.