You are in the same position that I am in. Maybe not as bad. First of all, provided you’ve done your homework, your calculations are correct. Secondly, market value is just that, market value. Houses do not sell over market value because that becomes market value. Something is only worth what someone else is willing to pay for it. Appraisals generally reflect that. Maybe homes sell over asking price but that means the sellers are not asking enough. That should change over time. Well, look for sellers that are "don’t wanters. They have to sell quickly for one reason or another. Maybe a job transfer, divorce, foreclosure etc. Call the banks and finance companies for REO’s. I bought my first investment property with a LOC and moved into it to become my principle residence. I took out another LOC one year later and did the same thing always renting the one behind it. That’s how I got my start. There is no owner financing here due to a hot sellers market. My calculations were the same as yours a
I need help from you very knowledgable people out there
It is a sellers market in california. houses are selling from 5% to 10% above market value. I cant get a break on price as an investor (beginner).
I can buy the houses but for the price I purchase the house the rent I would have to charge isn’t justified in the area.
for example the medium house range in my area is $160k. I don’t have much money only what I can get out of a home equity line of credit which is up to 68k. If I put 10% down on a 160k home (16k) then the mortgage on the first at an investors rate of 2 points over prime 10% is $1262.88 taxes would be $166 per month and insurance at $33 per month pluse the amount of my second (the 16k from the line of credit) is $176.17 per month. tho total manthly is
$1638.05
that is an un heard of amount for rent in this area!
could one of you smart people run the # and see if my math is correct?
Can anyone help me with a solution?
I love real estate but I’m new at this game and need advise
SC