2006-07-20 16:42:40 · 6 answers · asked by Daniel T 1 in Business & Finance ➔ Renting & Real Estate
You sure can, I am a first time homebuyer & just bought a rental in the last 6 months( 2 homes). Both properties have neg am loans, 20% down on each home, and I am not clearing the loan and taxes/insurance on the rental even on a neg am.
The sales price was 545K, my neg am payment $1750, taxes $570 and insurance $75. I had 2 applicants to rent after sinking $10K to repaint and update the plumbing! I rented for $2200 a month including water, trash and gardner for about another $100 a month. The home is in a highly desirable Southern CA neighborhood with custom homes with large yards and great curb appeal ( someday hope to leave my condo and move into the home). In hindsight I would leave the investements to people like DOnald Trump, prior to renting it was a full time job arranging the work to be done, 2 months to get rented ( another $5000 out of pocket loan payments) After I agreed to 2 small dogs, I found a zoo!!! 2 dogs, 1 cat, a small fish tank, a turtle, and now a rabbit. Its very hard to see something you pay $500 out of pcket monthly , really get LIVED in by someone who isnt treating it like thier own home.
2006-07-20 19:10:22 · answer #1 · answered by Jacque w 3 · 0⤊ 0⤋
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2016-07-19 21:07:57 · answer #2 · answered by Anonymous · 0⤊ 0⤋
I am a commecial real estate broker with specific training in investment properties. While an accountant may advise you to leverage as much as possible, 80% leverage is wiser than fully leveraged. The possibility is that your cash flow will not be enough to over your taxes, insurance, common area maintenance, and set asides for repairs, costs of operations, debt service etc. You should put something down on it.
Most lenders, unless you are exteremely strong on your financial statement will require 15% or more as down payment, and for a reason. The lender is concerned about risk, as you should also be. The more you put down the lower the risk. Also, a down payment allows the lender charge a lower interest rate to you, because of the lower risk.
You failed to state what type of investment you are considering and why. Residential (apartments) have a 25 yr cost recovery period, commercial 39 yrs. Then there are tenant improvements and other things to be considered, like tax consequences and the state wherein you want to make the investment. States will also have a variety of tax treatment. And you need an experienced broker to set your leases for max opportunity for success and happy tenants. Happy tenants equal no vacancies, which helps your bottom line.
You need more than the typical "real estate agent" that helps you buy a house, you need somebody that concentrates on commercial investment property, and they will have designations or will be working on designations such as CCIM, SIOR, but CCIM is recognized as THE brokers to seek out. I am a candidate member of CCIM and working towards achieving the designation, hoping to sit for the final exam in the fall which is the final step.
Buying income producing property should be done with the best qualified broker you can find. The money cost usually is built into the pricing of the investment you are The real proof of the broker of choice is in the fact that the broker has enough interest in their vocation to go the extra steps and expense for the training to properly evaluate and advise you so that your purchase is a wise and profitable purchase. The cost otherwise is high risk of failure.
I am happy to recommend a successful broker in your area if you like, just let me know. Good luck and be smart!
2006-07-20 18:20:11 · answer #3 · answered by hithere2ya 5 · 1⤊ 0⤋
Sure, and it might be very profitable for you, if you will be getting more rent from your tenants that you are paying on the loan. And even if you have to fork out a little of your own money each month, the tax advantages will outweigh what you have paid in. Just be sure to check the numbers very carefully...your real estate agent should have a program that will do that for you. And make sure you discuss with a broker just what your plans are for the rental property...do you intend to hold on to it a long time and keep etting income or do you hope to sell it shortly and profit from appreciation. (this is NOT a good time for that, unless you are able to get the property for way below its value.)
2006-07-20 16:49:00 · answer #4 · answered by junielu 2 · 0⤊ 0⤋
Yes, Most investors like myself use negative am loans to produce the greatest return every month. If you located in California check out this website: http://www.firstmeridiancapital.com/content.aspx
2006-07-21 02:42:54 · answer #5 · answered by barraganf2001 2 · 0⤊ 0⤋
Rent-To-Own Homes - http://RentToOwnHome.uzaev.com/?jsjn
2016-07-12 03:46:01 · answer #6 · answered by ? 3 · 0⤊ 0⤋