Posted by batpro on June 25, 2001 at 21:23:10:
I believe you can get up to a 4-plex and still be residental but there may be some programs that go to a larger plex.
I would try to not go through a realtor, call the for rent ads and inquiry if the owner is willing to sell. Also, throughly search the property section of your newspapers.
1st time buyer needing help - Posted by Sarah
Posted by Sarah on June 25, 2001 at 17:26:56:
I have looked it over and am really excited to purchase my first income property. I am working with a realtor now. I had one before but he kept presenting me with properties that made a negative cash flow and were in crummy neighborhoods (though I told him repeatedly that was not my idea of investing).
I know that since this is a first time purchase I can probably get some type of government program for 100% financing (I do not have a downpayment). I also have great credit, but I only work part-time as I’m going to school so I don’t make a whole lot of money (which I know can count against me). I’ve also only held my current job for 6 months, but the one previous I held for 3 years.
So this is the situation I am in. I have found a realtor I think will do a good job this time. What I need now is to figure out what I can look for/afford/ get loaned to me, what programs are available, and what the stipulations on those are. Also, does anyone know how many units in a property can exist and still qualify as a residential (i.e. I live in it but my tenants pay the mortgage + positive cashflow). The reason I ask is that through my research into the world of investment property it seems that the more the units the more the available cash flow and the less risk of worrying about tenant vacancy because there are other tenants there to carry you over should the need arise.
Anyway, if you can help me out with some suggestions on what to do, or how to proceed, or if you can answer my questions, please respond.
Thanks,
Sarah
Re: 1st time buyer needing help - Posted by Ronald * Starr
Posted by Ronald * Starr on June 26, 2001 at 21:04:48:
Sarah------
Good for you, going for a property. I agree with BatPro’s response.
I suggest you expect to spend several months before you will be able to put a deal together. You need to get to know the market values for properties like this in your area. That means you have to look at a whole lot of them and see for what prices they sell. Probably at least 35 or 40, maybe more.
You have to answer first the question: can I find some properties that will do what I want? Pay a positive cash flow, plus pay all expenses, and you don’t have to put any money in? Whoa, I’d have to see that to believe it. It wouldn’t happen around here in the San Fran Bay Area. But, maybe it will work where you are.
If you can do that, then start making offers like that to people who want to retire or cut back on their property management duties. Not people with properties for sale, but anybody who owns the type of property you want in an area in which you want to buy and who has owned the property at least say 10 or 12 or 15 years. So they have a small loan compared to the value of the property. It may have gone up in value. They may not know the value, but you do, because you are an expert on the value of properties like theirs because you did your homework, right?
Send postcards or letters. Telephone. Knock on their doors. It can happen. You just need to make it happen.
Then make the deal, with them financing most of the purchase or the amount of the purchse above the amount you can borrow and pay yourself.
Good Investing and Good Learning*********Ron Starr