Posted by Jon Richards on December 08, 2002 at 19:37:30:
You don’t say what the down payment is. That is crucial to determining if this is a “Good Deal” or not. Generally, 20% or down or less with a $0 cash flow after all expenses, not just PITI, can be considered a “good deal.”
Best of luck.
Jon Richards
NoteWorthy Investments, Inc.
415 824 8164
four green houses… - Posted by WKH
Posted by WKH on December 08, 2002 at 18:47:37:
Ok, i found a house with a seller willing to accept 137K, he was asking 146K. There is nothing fancy or creative (unforetunately) about this deal…but here is my dilemma. This will be my first house purchase, i’m getting a large portion of the financing from my father for the downpayment; the numbers work out to be about 1K PITI a month, if i move in with two friends i can collect $500 each from them plus my $500; so i’ll be making $500 a month; i mean it’s my money going back to me so i don’t know if this could be considered a ‘true’ cashflow. If I put another room and bathroom on the back of the house for a cost of about 12K-15K i could bring in another 400-500 a month; it’s in a decent area with transportation (rail and ferry to Manhattan); is this worth it? i worried that if i get tied up in this deal i won’t be able to have $$ to pursue another deal…any thoughts would be apprciated!
Re: four green houses… - Posted by MoniqueUSA
Posted by MoniqueUSA on December 19, 2002 at 04:28:04:
WKH,
If it’s worth $146K, your price of $137K is just a 7% discount – what a Realtor’s commmission would be in our area.
We typically look for a much bigger discount, even when we are buying with favorable terms (e.g., taking over existing financing, some form of seller financing, etc.). If we were to put down a healthy down payment (15% - 20%) and get a mortgage, we would expect an even bigger discount, say 20% - 25% discount off value.
Since this will be your personal residence, you might be willing to pay more than if it were strictly for an investment (you’re getting other benefits in addition to cash flow).
You might want to post your question on the Main Newsgroup Board about your specific deal:
http://www.creonline.com/wwwboard/index.html
MoniqueUSA