Updated almost 9 years ago on . Most recent reply
23 Year Old Investor: Thoughts on Current Strategy
Ok so me and my dad have set out on buying rental property(own an LLC together). I get a loan from a mortgage company in my name and we split down payment and rehab cost. I am a Realtor and and also work for my dad's a/c company. We currently own two properties.
We bought our first house last July for $66,500. 20% down and and $2,500 in minor repairs. After closing cost and repairs we have $19,500 into the property. I am managing the property and it currently rents section 8 for $950 a month, our monthly payment is $394 and that includes taxes and insurance. Tenant has been awesome so far. My question is whats all the fuss about buying 20% below market value when I can find deals like this in my current market? I understand that I only have 20% equity in the property, but why would I want to jack up my cost with expensive repairs plus 20% down?
The second house we bought just last week. It was a HUD foreclosure and in order to not have to bid against other investors we bought it during the "first look" period. So to fulfill the owner occupant requirement I am moving out of my parents house and live in this house for one year. After one year is over I will do the same process over again. However, this house was bought below market value. Purchase price is $60,000 and its ARV will be $105,000. We have estimated our repair cost between 14-18K. My payment on this house is $406 and will rent between $950-$1,000.
Our plan is to possibly by one more this year if the opportunity presents itself, and at least 1-2 per year for the foreseeable future.
Any advice????