My mortgage broker has 3 doubles that another investor has rehabed and rented out. The average cash flow is $115/ mo. He said we can get +/-$16000 at closing per property. I have seen these and they look good. They are in a neighborhood that is sloowly recovering. My question is would it be better to take the cash and put money down on other deals or pay off a 2nd on my primary home?
Thanks
Humm…pay off the 2nd on your homes or leverage the cashback money to increase your portfolio and in return increase your networth and monthly positive cashflow… Which do you think is better???
andrew
I agree, leverage your way to wealth.
if its such a good deal, why isn’t your mrtg broker buying 1?
Thanks for the info. that is what I was leaning toward. My broker has bought some properties from this investor.
Thanks
Paying off/down your primary residence is always a great thing. The thing to try and do though is to never borrow against it again. I have been doing this awhile and I now own my primary free and clear. The great thing about that is if everything else fails you can always go home.
What is the appraised value on the houses?
one thing to be wary about is possible collusion between the investor, appraiser and mrtg broker.
in some parts of the country this has happened and you could end up over paying for a property. i’m not saying its happening in this particular situation, but just something to be cautious about.
reoconsultant, the appraised value on 2 are 65,000 and the other is 72,000.
Thanks for the info
woodman, those prices may be too high for mobile homes. Alot of folks in the mortgage business would steer you away from a deal like that. Why are they trying to give you so much incentive?
Mobiles are like cars, they depreciate in value. You would be better off putting that type of money is some fixer uppers.
The mortgage broker is trying to secure his commission. Try this and see, if you can lock the contracts down, and assign them to another investor. Or better yet, hire your own appraiser, and don’t mention anything that you know now, and see where the price will come in at.
Are they mobile homes or modular homes. Most likely a modular home and is it on a concrete foundation or on blocks still??
Modular homes do not depreciate. Here in SoFl, modular homes, even the double wides can cost you over $200K in some areas and are so nice, you can not tell the difference…many of these are 2000 sq ft and more…
Which do you think will sale faster, mobile aka modular homes or a stick/brick home for the same price?
They are duplexes not trailers. Sorry for the confusion.
Thanks
Well, then you might have a good deal.