All Forum Posts by: Account Closed

Good morning,

To preface this deal, I'm currently in the market to purchase my first primary residence so I qualify for the $8k or 10% (respectively) on the purchase. I've been doing a lot of searching trying to find a property that I can live with for 3 years (amount of time I need to stay there without needing to payback) but that also acts as an investment for (a rental that will cash flow). The area that I'm looking in has a State University but in general a somewhat depressed economy to go with it. Because of the University the city will never really go away (fortunately).

I've found a single family home that has been split into two units (upper/lower). 2 bd 1 bth in each unit in a very desirable part of town and still close enough to the University to be considered off-campus housing (after I leave and want to rent it).

My intentions are to purchase and live in as a single family (for the sake of the credit) but keep the units separated. I would actually work on the two units over the 3 yrs to update them and increase value as a rental.

The home is LISTED at $110k and current taxes (non-homestead) are approximately $6k annually. By using as my primary residence I can use the FHA loan I qualify for with only 2.5% down at 5% fixed 30yr. The total PITI w/non-homestead tax is $1200 (and will be lower while I'm there with homestead exemption). Currently the property had been renting out for $1200 total ($600 per unit). This property is in good shape but rents are under market and I think could be bumped AT LEAST $100 per unit up to $200 per (realisticlly).

I know that I can't predict what will happen in 3yrs for the market but I'm trying to find out if the estimated $100-200 cash flow that I'll expect will make sense or not. Also, I very well might be able to contract this property for a bit less than the $110k.

Any and all thoughts would really help on this one.

-Josh :cool:

Hi all.

My Fiancee qualifies for first-time home buyer program and we are pre-approved for FHA loans (including 203k) which puts us in a good position to buy before December 1st of this year (not far away). We originally began looking at homes that we could "grow in to" and that were "perfect" but I soon realized that despite the market downturn, my current J.O.B. doesn't provide me with the funds necessary to get a pimp pad. So I actually started to use my brain and realize that I'm only 23 4/5 and that I don't need the best of the best right now.

So here is what I need help with...

We've decided that (if it can workout) we would like to purchase (or invest) into a multi-family property that will still qualify for the $8000 tax credit. My intentions were to get a vacant, under-valued off campus home that is setup for 2-3 units but that would be believable that we are treating it like a single family unit. While being in the property we would live there, fix and update the other units and stay in the nicest one.

My question is, do you see any problem with this basic summary of the idea and SPECIFICALLY, how long will I need to live there as my primary residence before being able to RENT OUT (not sell) the other units.

I'm hoping someone says I could buy, take credit, live as primary residence while fixing and then rent after 1 yr. and not have to pay back the credit. Besides, students need affordable housing here...

EXTREMELY interested in getting thoughts from the experienced or preferrably a CPA.

Thanks,
Josh :lol: