Ready for my 1st purchase...but it’s a sellers market
About me:
So if I have finally gotten to the point where I’m ready to make my first purchase. My end goal isnt to be loaded rich,but rather have some financial freedom at some point. I love my job so I will never quit. I’m handy and plan to at least the minor maintenance myself.
Financial:
I don’t own anything other than a pickup. I’m a single 25 year old guy. with around 50k total that I’ve saved over the course of 3 Years. I live in a rapidly growing area, one of the fastest growing in the nation. That means it’s a seller market for sure. People are getting well over full asking price all day long within a few days of hitting the market. Now causes some price inflation.
I’ve been wanting to buy a fourplex but the numbers don’t make sense any of them, so I’ve started looking at duplexes. I’ve landed on a Duplex I really like and it’s super clean with lots of recent repairs including new roof, new appliances, fresh paint and floor all around. It’s in a fantastic area which vacancy will be low.
Cost is 310,000; I was going to do an FHA loan with 3.5% down (10,800) which would earn me lovely pmi that would never fall off, plus a 1% loan initial fee and the Leander fee. Plus closing cost, inspection and appraisal cost. I estimate my cash total cash investment will be 18K.
The numbers I’ve crunched are as follows.
Gross operating cost per month:
Mortgage w/ pmi, insurance & taxes
$1850
Utilities
$80
Maintenance
5%
Vacancy rate
8%
Management
I’ll Self manage
Gross Income:
Rental income
$2200 worst case
$2400 best case
Total money invested:
18K
Basically I need advice from the people who have some good well rounded insight, because I can’t be sure that the people who have some stake in game(realtor and lender) are always cutting it straight, I trust them, but 3rd party insight is better. The economy here is great and growing. Everyone with money is buying marginal deals because the forecasted appreciation. Making it hard for someone like me who needs to find better than marginal deals, because I’m just getting started. My plan is to buy and hold. I can live in it for awhile and buy forecloses and do flips, after having a place to live and stop paying rent. Or I can move out in a year and do it again, or do I just keep renting and wait? Who knows when the market will drop.
Any and all advice is appreciated.
Respectfully
Hunter