I'm having issues trying to figure out what I want to do out this investment property. It cost 88K and there is a possible 15% down payment. With closing cost it would be about 14.7k. There is a tenant already living in the house monthly rent is about $1,120....I'm getting more information on the home....my issue is I don't really have the money...I know there are many ways to get the money..but I keep feeling like I'm hitting dead ends...is there any advice someone could give me?
If it's a good deal, see if you can bring in a money partner who will come up with the cash for the down payment. Friends, family, local investors, BP marketplace.
Who is offering the home with 15% down?
1. Make sure you do your due diligence and know that the tenant is actually paying their rent and know the neighborhood.
2. Talk to everyone you know who has money about partnering up with you.
3. It's ok if you have to say no or if the finances don't come together for you. There will always be another deal in the future.
What makes this great is the city is paying most of the rent, the tenant pays $25 and has been there since 2008. She doesn't plan on leaving anytime soon.
Have you calculated the ROI?
There are many calculations available online. While the purchase price to rent ratio seems pretty attractive you need to know you cash flow, and cash on cash return. Calculate all the expenses, including insurance, mortgage, taxes, HOA (if there's one) and also budget for inevitable repairs. Also I suggest you look into the rentability of this house just in case the tenant does move out. You never know what life can bring. You need to be able to find another renter in case this one leaves.
Another consideration is who will do the maintenance? Will you be managing the property yourself? Google "investment property calculator xls" will bring you some spreadsheets. Perhaps there are some good ones here on the site. Perhaps search this term here on BP. I use a great excel sheet and can share it with you. PM me if interested.
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