Updated almost 15 years ago on . Most recent reply
Starting out with condos then moving on to SFH?
I'm new to real estate investing. I've been reading books and have been interested for the past 6 years and now I'm ready. I know I have to put 20% down to get approved for financing on an investment property. Would it be a good idea to start out with condos and move on to single family homes once I get good cash flow. I just need advice. Is it a good idea to start out with condos and then go on to single family homes? I also plan on buying in Las Vegas. Thank you for the advice.
Most Popular Reply
In today's financing market I would say NO. Condos are very cheap now for a good reason. You and later your buyer will have trouble getting financing. Talk to a mortgage broker very familiar with loans for investors on condos. The percent of owner occupants in the complex is key.
Additionally, despite the low price your cash flow may be far worse due to high HOA fees. When fees were 10% of your mortgage payments that was fine ... now they may be 80%. HOA's lose those fees when there are foreclosures so they spread the losses among the remaining owners.
Step 1 - check on ability to get a loan on that condo ... if you can buy through the TACT Program then you're OK. If in AZ we can help.
Step 2 - Do your calculations on low priced homes vs condos.
Good luck ... if this were easy, everyone would be doing it, and the successful few would not be as wealthy as we are.