Maybe a break even deal

Hello all. I am a mortgage broker from Long Island NY and I think I may have my first deal.

Found a home that is being sold about 10% below market @ 205K. If minor repairs made ( carpet paint etc) could possibly get 230K - 240K.

My plan is to rent it for one year and possibly hold or sell at that point.
Might be able to squeeze a poss cash flow on rent, couple hundred a month but only if I go intrest only all around on an 80/15 loan in either a 5/1 or 7/1 arm. Seen property in this area appreciate over 120% in three years.

Afraid im a little late for this game in my part of town. The would have could have should haves could make me jump if I dwel on them!

Tnx in advance

A Maybe break even deal, usually turns into a money losing deal in no time. Renting for cost, will usually go negative when you have to evict, repair, vacancy or just a raise in property taxes. Also if you were in the mortgage business longer you will also know that prices can go down, and that %110 gains in three years can easily become %30 percent losses.

Being in the mortgage business for three years now I am fully aware that prices can decline. The chances of that happening here in LI NY are not as high as in other parts of the US. With section 8 tenants the risk of an extended vacancy are slim. Put it on the market and the phone rings of the hook. I guess i will give it a year i am aware of my downside risk.

Thank you for thr reply

Mike, ’

Speaking from personal experience my last deal seemed great, I made $10,000 at closing. Now 1 /12 months later all that money has to go back into the property, now It’s difficult to sell it, without taking a loss. Now The lease is up and If I rent to someone else i will be in the hole -200 a month or more. Make sure you get your numbers straight before you dive in.

All the best to you

P.s. If the numbers work go for it, you might actually look into a lease option once you buy, it minimizes your risk, even if it’s just a little. look at lease option forum on this site.

Thank yo for your feed back Carlos. I am going for it. Offer accepted @ 205k. Just hate having to go intrest only on the first to squeeze out a few hundred in cash flow. Thank god I am in the biz and closing costs wont be to bad. escrows per diem and mrtg tax is all.

have a good one!