All Forum Posts by: Alec Anderson

2 duplexes for 162k

Zillow estimates they are worth 84k and 85k each

They are both mostly brick, identical, and right next door to each other. All units 2br 1ba.

One roof has a leak, so it needs repair or possible replacement.

The street is probably C or D class in my opinion, mostly similar quality duplexes. There's some nice neighborhoods (300k+ houses) a block away, and some sketchier seeming neighborhoods a block away as well.

All 4 doors rent for $600 each, so $2400 a month. 2 tenants have been there for multiple years, 2 less than a year.

Seller wants 5k down each, and $550 a month each. So $1100 per month, with $100 going towards the principal, for 5 years, then a balloon payment.

Taxes for the 2 combined would be about $275 per month, and I'm guessing worst case $200 for insurance.

So 2400 income and 1575 in expenses, and lets say $300 per month for repairs and other unexpected things would leave me with an estimated cashflow of $525.

How do I figure out the actual interest rate I'd be paying the seller? Does this seem like a reasonable deal? I believe the seller has his own financing on the properties, so how would I protect myself from him not making his payments, keeping all my payments and getting foreclosed on?

The 10k down with no banks is really nice, but after 5 years i'd have payed him 66k in payments, plus the 10k down, and only 16k of that would go towards the actual 162k principal. I'm too new to know if that is normal or not.

2 duplexes for 162k

Zillow estimates they are worth 84k and 85k each

They are both mostly brick, identical, and right next door to each other. All units 2br 1ba.

One roof has a leak, so it needs repair or possible replacement.

The street is probably C or D class in my opinion, mostly similar quality duplexes. There's some nice neighborhoods (300k+ houses) a block away, and some sketchier seeming neighborhoods a block away as well. 

All 4 doors rent for $600 each, so $2400 a month. 2 tenants have been there for multiple years, 2 less than a year.

Seller wants 5k down each, and $550 a month each. So $1100 per month, with $100 going towards the principal, for 5 years, then a balloon payment.

Taxes for the 2 combined would be about $275 per month, and I'm guessing worst case $200 for insurance.

So 2400 income and 1575 in expenses, and lets say $300 per month for repairs and other unexpected things would leave me with an estimated cashflow of $525. 

How do I figure out the actual interest rate I'd be paying the seller? Does this seem like a reasonable deal? I believe the seller has his own financing on the properties, so how would I protect myself from him not making his payments, keeping all my payments and getting foreclosed on?

The 10k down with no banks is really nice, but after 5 years i'd have payed him 66k in payments, plus the 10k down, and only 16k of that would go towards the actual 162k principal. I'm too new to know if that is normal or not.

I exclusively occupied 16% of my property and rented out 2 rooms for a total of 24% of the sq. footage. The remaining 60% was shared between the 3 of us. For depreciation purposes would I be able to deduct the 24% they occupied plus 2/3 of the 60% (for a total of 40%+24%)since it was shared 3 ways?

I'm attempting to do my taxes and they are a little more complicated this year, as I house hacked and rehabbed my first house, while living in it. I was thinking of using Turbo Tax or HR Block's software. I've also heard Credit Karma has a new free tax feature and was curious if anyone has tried that out, and if it would be user friendly for my situation. Can I get some good recommendations please? I'm pretty good at figuring things out, but I'm not a tax expert, so the ideal software would have to ask the right questions..

I've contacted a few other lenders in the past 24 hours and have come to the conclusion that the person who told me you can't get conventional under 100k probably said that because he thought it would be a waste of time for him, because a few other lenders said they can do it.

I've got a house under contract for under 100k and just found out that i can't get a conventional loan under that, so i'd have to use a FHA loan. I was planning on fixing the house up with my own money and then renting it, but i really don't want to be stuck living there for 2 years with FHA.. If i were to find a portfolio lender would they be able to help in this situation? My other idea was to try for the Homestyle loan at 100k to qualify for conventional financing and have the money to repair, but i dont know how easy that process is. Please message me or comment with any helpful information, as this is my first purchase, so i'm new to this all.

Thanks for the input! I was leaning towards conventional until yesterday. I had an inspection and the house needs, in my very non expert opinion, 15-20k in work that I wouldn't be able to afford, nor do on my own(mainly new siding and masonry work). That being said, which of these loans is generally less expensive if I were planning on owning the house 2-5 years? The house is a short sale, so I have time to wait if the loan process is longer than normal..

Hello, I'm looking to purchase my first home and am looking for any input on these types of loans. My plan is to live in the property while doing some small to medium type renovations (upgrade kitchen, put in hardwood flooring, other minor cosmetic things.) I don't plan to keep the house more than a few years. Would it make more sense to get a loan with a smaller down payment and pay for renovations myself, or to finance the renovations with this type of loan? I would like to do as much of the work as I can on my own, to learn how to do these things and to save labor costs. I will also be renting out a few bedrooms to family while I'm living there, so i would probably be able to save up 500-1000 of my own money, per month, towards renovations or else save it for the next house/investment. 

I'm very new to this, so i apologize if the information is too vague haha, any input would be greatly appreciated!