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!
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.
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
-Carlos
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.