I want to buy my first owner occupied investment property in Queens, NY. But need advice on what would be best if I am hoping to close in 2 months. All tenants pay their own utilities.
Option 1 400k - Approved short sale 4 BR multifamily house been on market for over 180 days.
Owner occupies 1 BR No rent
Tenant 1 occupies - 3 BR - $1800 rent
Tenant 2 Rentable Basement Studio - $800 rent
Option 2 400k - Bank owned REO 3 BR multifamily house been on the market for over 100 days.
Owner occupies 1 BR
Tenant 1 occupies - 2BR - $1800 rent
Unfinished Basement - Needs work but could be rented after repairs...
Hi @Kenesbro Brown , first welcome to Biggerpockets! From the numbers it doesn't look like either option will cash flow. But, judging from your location you might be more interested in the appreciation play while you live in a place building equity and not paying some other landlord rent.
I would note that your closing time is going to be extended for both the short sale and the REO. So closing in two months may not be realistic. From the information given I would go with option 1 because of the rent able basement.
I would take a look at the Analyzing tools they have here for rentals and you will see what I mean on the properties not cash flowing. You need to factor in operating expenses like, insurance, repairs, utilities, accounting/legal fees, lawn/snow, supplies, gas,sewer, water etc.
Goodluck! And let us know how it goes.
I think you could close in two months on the Reo, the short sale would be tougher. When they say "approved" it doesn't always mean approved. They may have had a previous offer approved at that price. The bank will still go through another approval process for a new buyer which could take months. Some banks do have actual pre approved short sales, but they are rare .
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