Financing the whole amount of a property...

3 Replies

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.

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. 

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.

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.

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