I am in the process of getting a condo in MD that has a tenant already renting for 1350 per month with help from section 8. The listing price is 85k for 3/2 bath and my agent told me the comps that have been sold recently have sold for a little over 100k. I don’t have any down payment money but my credit is good and I have been prequalified for 125k if needed. Does anyone know anyother possible solutions to my problem than the method I have already started which is the bank. They have offered me an 80/20 loan, 73600 with 7% and the remaining 18400 with 10%. This will come out to a payment of 797 per month but with the 5 year arm at 5.75% it will 737. Don’t forget the condo maintaince fee for $235 a mont which totals $972.It sounds good but I don’t know how to come up with the payment at closing. I do know something about getting the remainder rent for the month that could be put toward it but what is the best thing for me to do. I put in an offer today for 90k with 3%(maximum allowes from the bank) which comes up to 2700 buts thats it. Properties go very fast up here and I want the seller to lock in with me. PLEAS HELP ME!
put in a offer with atleast 45 days closing and no penatly for a 2 week extension.
say its christmas time and it might take longer to close.
find a rich friend or relative or investor who’s willing to put up the 10% and make
him a partner. half of a good deal is better than nothing at all!
would the 10%make much difference as far as the deal? Like I said my payments should still equal out with some positive cash flow alone. Thank you for the 45 day closing that was really helpful, I will tell her that tomorrow.
anyone who has a response can respond… ;D
if you don’t need the 10% down & you can get 100% financing you don’t need a partner. just go for it.
I’m no math wiz (OK, I used to be but some will debate that!), but…
You say, “They have offered me an 80/20 loan, 73600 with 7% and the remaining 18400 with 10%”…great deal…you’re wanting to buy an $85K property but this is $92K of money.
80% of $85K is $68,000…at 7% for 30 years payment is $452.41
20% of $85K is $17,000…at 10% for 30 years payment is $149.19
Total is $601.60
The Condo fee is $235
What about:
Taxes?
Insurance?
Maintenance?
Management?
Vacancy?
You will still cashflow but you need to always do all of the math with all of the factors to make sure you cashflow!
You make no mention of your credit scores…
An 80/20 is a good option because there will be no PMI.
Keith
KD - just a clarification - Condo fees cover all building maintenance and insurance. In a condo (what seperates it from being a Townhome for instance) you only own the air inside the condo and the interior finishout, you do not own the walls or the exterior so in turn, you’re not responsible for maintaining them. That’s why lender’s don’t require ‘party wall agreements’ for Condo’s but do for Townhomes. That’s why a Condo is a higher risk class for a Lender than a Townhome (The Cov and Rest.)
Sorry about not mentioning, the 92k from the lender was for the prequalification letter to give to the seller to show I was defenitely good for the 85k. The monthly payments included the taxes and insurance(hazard, homeowners,etc) and the management and maintance fee was 235 a month which came up with the total of 972 per month.
I was told by a friend of mine to get financed for 92k offer the seller the 85k they’re asking for with all closing paid by them and whatever is left they can keep. The appraisal will defenitely be over 92k so I hoping this can work out and the seller will take the deal because they’re getting what they want. Do you think thats a good option for NO MONEY DOWN?
<<Condo fees cover all building maintenance and insurance. In a condo (what seperates it from being a Townhome for instance) you only own the air inside the condo and the interior finishout, you do not own the walls or the exterior so in turn, you’re not responsible for maintaining them. >
So who’s responsible for the toilet, the washing machine, the refrig, the stove, the carpets, painting, etc., etc.? (this is a rhetorical question)
Even though the exterior maintenance is done by the Association, there is still maintenance to be considered. Additionally, I believe that you would be foolish not to insure yourself for the interior, any contents (e.g., appliances,etc.) and for liability at the property!
Keith
Kd,
Good points on insuring yourself for the contents of the property. Do you insure your SFH for the appliances or do you have hazard insurance only?
In my residence, the structure is insured and the contents are also, at a percentage of the structure’s value (but in addition to the structure’s value)…
But…that said, I have a new house with high end appliances…the fridge was probably $2K+…I would think hard about filing a claim unless it was significant. The insurance companies are looking for reasons to get rid of folks that file a lot of claims. If I owned a condo and some pi$$ed off tentant decides to take a crowbar to ALL of the appliances and trash the inside to boot, I might need to file a claim.
Keith
The liabilty is taken care of by the condo association’s blanket policy. And I concur that only if ALL the appliances were jacked up would you file a claim. So to me, I wouldn’t ever carry contents insurance on a condo for that very reason. However there are people that would see otherwise and could make a strong supporting argument for their position.
Only show the seller a pre-qual letter for the amount you’re offering. If you show them 92k they’ll want 92k.
Great point Mikeincali I have my lender make out my prequal on each property as follows
To whom it may concern Robb O. Is qualified to purchase the property located at (address) at an interest rate not to exceed __% thru ______________ bank.
It is a pian in the _ _ _ for them but hey that is why they get paid!
Robb