We are wanting to get this place brought up to the current times and try to automate payments and accept them online. 

The holder of the note would use the money to buy real estate but I would only receive one payment annually so there would be very few transactions.

Plus I would need a down payment.

I would put it on the tenant, mainly because for financial purposes they will have to take over those payments once the house is theirs anyways.That being said I know my HOA does not allow transfer of fees to a tenant so I have to pay myself every month.

There are also two caveats to this: We really can’t start the full reno until January (closing August 31) and we are trying to get away with a small down payment given that we will be paying rent and mortgage for a year while the renovation is underway.

Whats the down payment requirement and would you still need to pay mortgage insurance? 

Our guest, AJ Osborne, shares an incredible story of building his real estate business — which focuses on self-storage facilities — as a way to transition his family from rich to wealthy (and yes, there is a difference!)

Hey guys, I’m considering withdrawing the equity from my current home for a down payment and purchasing a duplex or fourplex, renting out my current house and moving in to one of the units of the duplex/fourplex.

Hey guys, I’m considering withdrawing the equity from my current home for a down payment and purchasing a duplex or fourplex, renting out my current house and moving in to one of the units of the duplex/fourplex.

-Gross Monthly Operating Income3,291.75 Monthly Operating ExpensesProperty Management Fees347.00 Repairs and Maintenance200.00 Real Estate Taxes250.00 Rental Property Insurance298.81 Homeowners/Property Association FeesReplacement Reserve50.00 Utilities150.00 AdvertisingMonthly Operating Expenses1,295.81 Net Operating Income (NOI)Total Annual Operating Income39,501.00 Total Annual Operating Expense15,549.72 Annual Net Operating Income23,951.28 Capitalization Rate and ValuationDesired Capitalization Rate8.00%Property Valuation (Offer Price)299,391.00 Actual Purchase Price167,500.00 Actual Capitalization Rate14.30%Loan InformationDown Payment33,500.00 Loan Amount167,500.00 Acquisition Costs and Loan Fees6,000.00 Length of Mortgage (years)15 Annual Interest Rate6.690%Initial Investment6,000.00 Monthly Mortgage Payment (PI)1,476.66 Annual Interest11,002.25 Annual Principal6,717.63 Total Annual Debt Service17,719.88 Cash Flow and ROITotal Monthly Cash Flow (before taxes)519.28 Total Annual Cash Flow (before taxes)6,231.40 Cash on Cash Return (ROI)103.86%