All Forum Posts by: Diana Muturia

It looks like you reached your monthly mortgage calculation by multiplying $150,000 by 1.0425 then divided by 30 and again by 12. In reality its a bit more complicated. Mortgages are amortized loans. Each monthly payment goes towards paying down the principle as well as paying the bank interest on your loan. To start your payments will mostly go towards interest but over time the ratio of principle to interest shifts and eventually your payments are almost entirely towards the principle. This is how lenders make money. We wouldn't have mortgages if lenders only made around $6k floating people $150k for 30 years. 

Long story short, you'll end up paying over $100,000 over the life of the mortgage in just interest. Your mortgage payment alone (Principle and Interest) will be closer to $700 per month. This basically erases your cashflow. If you're going to use the 50% rule to calculate additional expenses you should also probably base it on if the all 4 rooms were rented. You're living in one unit but that doesn't change the fact that it's a 4plex and as such will have more to take care of than a triplex that also rents for $550/room. Also if the units aren't individually metered, good luck footing the utility bill.

If someone stops paying their rent and you get sucked into an eviction you're done. If the roof goes you're done. I don't mean to be negative, but these are serious concerns that need to be taken into account before buying a property. In order for this deal to work you'll need to be charging a lot more per unit or look for something cheaper. 

You're likely being too fast and loose with your calculations. Have you factored in vacancy? Capex? What happens if you have to evict a tenant? The lawn won't mow itself either. I would pass on this house.

 How did you come to $390 net a month? I don't mean to sound mean, but you need to reexamine how you're evaluating properties because your numbers are way off base and it's going to cost you.

There are state programs also, not just FHA, I know one in our state helps out with the downpayment. I forgot what it was, but don't be afraid to pick up the phone and ask, that is the only key here, call and ask.

make some estimates of the expenses and how it would work out.     The calculator here would help.    http://www.biggerpockets.com/buy-and-hold-calculat...

plugging in 200k purchase price, 3.5% down,  and 1650 rent income (the three units).  It could work depending on what the expenses are,  but assuming 50% of income as expenses it is negative cash flow.    

does the property have separate meters for each unit?  if not, you'll pay all the utilities and that will probably not work out financially.

A conventional loan varies but goes up to 20% downpayment which would be about $40k for you plus closing costs.

I'm assuming you don't have that since you said you were broke but if you look into FHA loan it is 3.5% down which would be $7k for you plus closing costs. This is a owner occupied loan so you would have to live there for one year to qualify. You can buy up to a 4 plex with this loan.

I don't know if a bank will let your mom partner as she does not live in the country but that is a question for the lender.

May Be difficult to qualify for a typical mortgage from a lender.  They would like to see a job and income on W2 forms typically.

Don't let that stop you though,  Can't hurt to call a place like quicken loans to talk to someone find out.

Maybe convince the current owner to hold the mortgage for you, if you can come up with something for a downpayment.  Convincing might take proof that you can manage the house better than they currently are.

Apartment for sale?, or you mean one apartment in a building for rent maybe, and you want to rent it with several other people, that would be normal.

Go to the campus housing office and ask about any rentals that they may know of for sale, or go find public records of evictions in the neighborhood, to locate landlords who may be fed up and might sell to you. 

Best of luck

Do you have a Job?

Can you partner with someone more stable?

If you are broke, do you have a downpayment and closing costs?

Are you in a rural area? (possible 0 down options)

I am not sure about qualifying but just go talk to a lender and see what they say, it is free just to start the process. Let us know what they say.