answer - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on February 18, 2002 at 01:10:47:
The speaker was probably right–it will be rare to get a zero-down deal with a bargain price. But, it might be done. And, depending upon where you are, paying market value may be good. The question is, how much rent will you get for a property and what will be your expenses? If you would tell us your state, it would be easier to tell you what might work where you are.
For instance, I just got back from OK. In and near Oklahoma City, you can find two and three bedroom houses for maybe $35K that you can rent out for $400 to as much as $500 a month. You might find that your monthly payments might be: mortgage payment is about $250, taxes about $30, property insurance about $30. Thus, you might be paying about $310/month out and taking in about $400-450-500. Now, there will be repair costs and vacancy, so the actual spendable cash may be less. However, offseting this is, if you have income taxes to pay, that you will get some tax benefits.
Also, you might find a property that needs fix-up and, even though you pay the full market value for the rundown property, you make a profit by fixing up and then selling for a higher price. This program fits especially well with having the seller finance the purchase for say 1 year.
Also, there is the possibility of buying a bargain property and not paying out your own money. If you could find a rundown property you might well be able to borrow from a private individual up to 60 or 65% of the fixed-up value. If the purchase price is less than this amount, you would be in with no money of your own. Then fix up and either refinance or resell.
Just realize that only a very low percent of properties can be bought with no money. It might be 1% or 3% or 5% of the properties in your area, depending upon your location. Also, almost none of them will be properties listed in the local real estate multiple listing service. You will have to go and beat the bushes to find the ones that can be bought that way.
Good Investing*************Ron Starr*****************