Taking it to the next level

Hello all, I recently discovered this forum and I’m very happy to have done so albeit a little later than I wish. Anyway, I’m 23 years old and bought a home last year (owe 80k worth 120K) and also my fiance owns her house which we rent out (she owes 91k worth 95k). Her house cashflows by about $100 per month. We are looking to buy a third property, but I’m wondering what troubles we will run into. We make about 100k combined, have excellent credit and have very little debt, but the problem is the loan and grants I received on my house stipulate it HAS it remain my primary residence for the next 4 years and I can’t refi it either so a cashout refi is out of the question. We are looking for another 100k house that we can cashflow. Any ideas would be greatly appreciated.

I really do not know how to respond to your post. Very little information is given. You imply in one sentence that you do not have the down payment but in the next sentence your looking for a house to buy? How do you make a 100,000 dollar house cash flow? Are you paying retail price for it? What will it rent for in your area?

1000/mo rent income less
200/mo taxes
75/mo insurance
100/mo management
100/mo maintenance

525/mo for mortgage payments =break even if no vacancies
100000 @ 5.0% 30yrs = 536.82=11.82 loss/mo

I do not know what houses rent for in your area but in my area you may only get 800to 860 for a 100,000 dollar house. To make money you need to purchase them for approx 50m or less if you can to get them to cash flow for the whole year.

Redhawk

Hi Redhawk, I appeciate you taking the time to reply to my post and I will clarify a little. My fiance’s house is currently rented at $800 and her mortgage is $660 with taxes and insurance escrowed in. I figured $40 per month for repairs and vacancy allowance (house is 2 years old and we live in a college town) so thats where I got the $100 per month cash flow. ($800-$660-$40=100) I have around 10k set aside for our next house but I have a feeling that might not be enough for an investment property. so my main question was how to structure my deal so I can buy NOO for 10% down. I’m planning my next property to cash flows about $200 per month.

Ryan,

Use a hard money lender to buy a distressed property. Perhaps you can find a house worth $100K that you can buy for $60K that needs ~$10K in repairs. I’ve used hard money to get into properties for very low money down, $2500 & $850. If you can finance the repairs and the purchase using the hard money loan and defer the payments until the rehab is finished, you will have to put out very little. You may be able to refi at the end of the rehab and refi cash out even.

I suggest that if cash flowing is your thing, you really want toget into the game as a serious real estate investor. Try doing “subject to” and lease option deals for cash flow. They work! Let me know if I can be of further help.