Advice needed on minimizing out of pocket...... - Posted by SC Novice

Posted by SC Novice on August 13, 2003 at 13:14:03:

No. It is for a cash cow only. This area has become heaviliy immigrant where everything available is being rented (including very run down property). This property has many upgrades (siding, central heat & air) and could get $475 (maybe $500) per month. Positive cash flow is the only reason.


Advice needed on minimizing out of pocket… - Posted by SC Novice

Posted by SC Novice on August 13, 2003 at 07:59:28:

Ready to do first deal that meets investment criteria but need advice or recommendations on minimizing cash outlays. Estate sell with judge (via realtor) asking 33k (28k might be accepted). Appraisal for 33k on file. Note the following:

  • Estimated repairs/upgrades - $3,000
  • Estimated closing - $3,500
  • Down payment if conventional loan - $5,600

Obviously don’t want to put out 12,100 out of pocket on this 57 year old property in need of updating. Once updated, I expect it would appraise in mid 40s.

Thoughts or recommendations? Sequence?



Re: Advice needed on minimizin - Posted by Tbyrd

Posted by Tbyrd on August 17, 2003 at 02:43:09:

raise insurance deductible as high as possible before closing, reduce it afterwards.This will save a $100 or so.every little bit helps.

ask closing attorney to carry note with attractive interest rate for their fees due at refinancing,especially if you go ahead and tentaviley schedule the refi date with them (if you’re going to cash equity once it’s rehabbed for money to put into other property)

If the bank is charging you an origination fee, have them instead charge you an equal (in dollar amount) number of points instead. Both go to the lender, but origination fees are not tax deductible to you, points may be depending on your situation, thereby getting you some of it back at tax time.
I’d suggest talking with a knowledgable CPA.

hope some of this helps

Credit? - Posted by Carrie

Posted by Carrie on August 13, 2003 at 14:06:52:

Hello Mike,
Why don’t you use a credit line for the 12k? If you can get one at a low enough rate and the rent covers all the payments with cashflow it might be an option for you to explore. We bought our rental in May for all cash we drew from a credit line and will be refinancing this month (to get better cashflow).
Just my two cents!

Advice needed on minimizing out of pocket… - Posted by Arthur

Posted by Arthur on August 13, 2003 at 12:35:10:

Can i ask you why you are buying this property? I sure hope its not to flip it.