I'm 24 y/o, I made 45K last year. I own a house with a $1,100 mortgage that i'm renting out for $1,100. I also have a duplex w/ a $1,150 mortgage that gets $600 (i live in the other half). I owned the house for 2 yrs. and the plex for 6 mos. I can get $60k in home equity lines of credit between the two of them. In my area 4 families are available for 360K and produce $2,400/mo. There is also a awsome 20-unit for 1.1 mil that produces $9,200/mo. do you think I have a chance, if not what do I have to do to meet my goals?
2006-09-18 16:00:00 · 8 answers · asked by jsho 1 in Business & Finance ➔ Personal Finance
Well, I am not one who thinks too highly of being a landlord. I've done it, I've failed and I am still a land lord.
The thing about being a landlord is, it's hard to make money between vacancies, maintenance, and repairs. You might be positive $1000-$2000 for the year, but one month can change it all (including your credit...).
If however you feel compelled to be a landlord, there is always chance!
This is my suggestion to you.
Find a multi-family unit that needs renovated. Get a hard money loan to purchase and repair it.
You will have much more equity this way.
Refinance it to a regular mortgage, because you'll have more equity you'll have a lower LTV (loan to value). Increasing the chances of approval (less risk to the bank).
Then you can have the privelage of being a landlord, while at the same time reserve the ever so luxurious option of selling the place when times get rough.
That's how I would do it anyways. Good Luck
JB
2006-09-18 16:12:55 · answer #1 · answered by redsuccess101 1 · 0⤊ 0⤋
You have to carefully analyze your cash flow. Will the rental incomes produce at least a neutral cash flow after all the expenses: mortgage, taxes, utilities, maintenance. Loans on investment properties tend to be at higher rates than loans on your personal residence. Lenders will look at your personal income and at the potential cash flow of the property. You also have to think about what goals you have for your real estate investments. Are you looking for current income or future appreciation? If you are interested in appreciation, single family homes tend to appreciate better than multi-family properties. Real estate can be a great investment, but managing a rental property takes a lot of work. Before you invest in any property, make sure to get a thorough inspection, but even if you do, be prepared for nasty surprises. Roofs leak. Heating systems fail. Things go wrong with plumbing and appliances. Who are they going to call in the middle of the night? You!
Another thing to consider is whether your current real estate market has hit a peak. Some places the market is topped out and is unlikely to appreciate for several years. In other places, things are better. Over a long period, there is lots of profit potential with real estate, but you have to make sure you can can make it through to that point.
I wish you luck. You sound like a young ambitious guy and I'm sure somewhere there's a lender who will work with you.
2006-09-18 16:27:33 · answer #2 · answered by just♪wondering 7 · 0⤊ 0⤋
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2016-05-17 10:59:34 · answer #4 · answered by ? 2 · 0⤊ 0⤋
debt to income ratio sounds high...u need more income. ratio has to be 50% or lower
2006-09-18 16:12:53 · answer #5 · answered by pyt_tlc 3 · 0⤊ 0⤋
Maybe
2006-09-18 16:04:19 · answer #6 · answered by pirateron 5 · 0⤊ 0⤋
It's a buyers market...go for it
2006-09-18 16:10:26 · answer #7 · answered by curious115 7 · 0⤊ 0⤋
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2006-09-18 16:06:32 · answer #8 · answered by delta s 4 · 0⤊ 0⤋