Kirkland, WA · Member since 2018 · 2 posts · 0 votes
Hello! first time poster and new-wannabe real estate investor.
My question/situation... I have an opportunity to purchase a condo -- but it's in a complex that's "cash only" because banks don't fund in the complex due to an apartment complex purchasing more than 50% of the units (or something like that).
It's a realistic price point (~$300,000), in a hot location, and could positively cashflow ~$200+ as a rental.
While the cash flow seems ok, i'm worried when it comes time to sell, it wouldn't make sense because if banks won't lend on it, then you loose a HUGE buyer pool.
My goal would be to own the condo for SEVERAL years as my first time investment only property or possibly live in there, fix it up, and rent it out for more.
Regarding MY funding, I wouldn't be buying it with MY cash, rather financing through different means, with low interest.
My question is- am I better off continuing to save and buy something bigger/better later down the road OR do I jump into this as a temporary primary residence and future long term rental?
Thank you for ANY help-- happy to go deeper as well.
@Austin Schneider You can buy this property as non-warrantable condo. There are so many lenders who offer this product but interest rate will be higher. If you are going to live in this unit this will be regular conventional loan even though this has higher investor ratio.
Why would you ignore that while putting all your eggs in one basket.
I would put $100K down on a 2-4 plex, $100K into 3% CDs and gold stocks to weather this trade war storm (2018), and put the last $100K into my own business as a LLC that could be used in Year 3 to play in commercial real estate (5 units or more).
In the mean time shoot for a 80+ business score and 720+ personal credit score while seeing if we're heading into a recession.
Agree with John Acheson
Real estate is a pretty terrible investment WITHOUT leverage.
Just run the numbers... cash on cash return of a $100k property renting for $1100 a) purchased all cash and b) purchased with 80% leverage. Keeping all expenses (except debt payment) equal.
You can crush the stock market using leverage. You can at best keep up with the stock market without leverage AND it’s with an investment that takes a lot more of your time.