Financing the whole amount of a property...

Financing the whole amount of a property...

Investor · Muskego, WI · Member since 2015 · 31 posts · 7 votes

Im buying a 4 unit building.

price is 150K.

rents are 25,200/yr

taxes are 6,000/yr

water/insurance 2,300/yr

Im paying cash and doing a cashout rifi at 4.75 amort. 25 years

Since my out of pocket is basically 0, am I in better shape than a conv. loan and putting down 25%?

Im figuring a return of 6k year after all expenses.

0Reply
15 views

3 Replies

Jump to latestLatest
  • Investor · Leominster, MA · Member since 2011 · 1k+ posts · 589 votes
    11y

    What about maintenance/repairs, vacancy, common utilities, any other expenses? As long as your cash flow is positive you should be ok. Better off? Your cash flow would be better with the d/p. Its all relative to your investment criteria @Michael Madden. Cash on cash looks better with no d/p. 

  • Wholesaler · Campbell, CA · Member since 2014 · 187 posts · 70 votes
    11y
    Originally posted by @Michael Madden:

    Im buying a 4 unit building.

    price is 150K.

    rents are 25,200/yr

    taxes are 6,000/yr

    water/insurance 2,300/yr

    Im paying cash and doing a cashout rifi at 4.75 amort. 25 years

    Since my out of pocket is basically 0, am I in better shape than a conv. loan and putting down 25%?

    Im figuring a return of 6k year after all expenses.

     Looks like a killer if you got all the numbers right. 0 out of pocket is 0 risk. you may need to give away the cashflow for the first year towards repairs and improvements, but at least gain some equity payed by your tenants.

  • Investor · Muskego, WI · Member since 2015 · 31 posts · 7 votes
    11y

    Thanks for the response.

    The rents are 25% lower than market rents in the area.

    Rents will be $28,800 in 18 months.

    Also I will be disputing the property taxes.  Whether that gets me anywhere who knows.

    Its city assessed and 235K.  I paid 150K.  Its value is somewhere in-between im sure.

Join the conversationCreate a free account to reply, vote on answers and follow this thread.