Quick recap of my situation:
I have lived on one side of a duplex with a friend for two years. Our rent is $1350, so $675 a piece, the other side is rented to a guy for $1400 and he sounds like he wants to live here a while. I believe market rate for rent in this area/home should be roughly $1500 or $1600 a side.
My landlord had an investor come look at the house yesterday, they are setting up an offer and contract Tuesday. I have been given the opportunity to buy this place for $300,000 directly from the landlord, I would pay closing costs which I am told would be roughly $6000 for the deed transfer. All the single family houses around me sold for $275,000 last year and are now $300,000 and higher (central Texas is a hot hot hot market). The landlord is an older retired woman and just doesn't want to deal with being a landlord anymore.
I make $72,000 a year with 10% in bonuses (company has consistently paid out these bonusses for the last 10 years). I have about $48,000 in cash. I was approved for the $300,000 loan through Rocket Mortgage (RM), an FHA loan at 2.75%, RM would put $2000 towards closing costs, I would put $18,000 down and the payment would be $1925. The payment is no worries for me and with the tenants it will be covered.
PIM would be $200 a month (accounted for in the $1900), I read if I put 10% down then it would go away after 11 years. RM told me to do the FHA loan and then in a year refinance in to a conventional with the equity in the home. My main concern is borrowing the money and if anyone has any advice to give I would appreciate it.
I ran the "4 square" method from Bigger Pockets and with no updates and am looking at a great return. This duplex is in a very good part of town in a town off I35 in central Texas. It is a little old and not the prettiest place but with the tenants already here the payment is covered. I work in construction management and know I could slowly update it myself if need be.
This would be my first house and I need to make the decision this weekend, everything points towards I should absolutely do it but its a quick decision and I am just nervous. If anyone can give any advice either way I would really appreciate it.
Submitted August 07, 2021 at 11:06AM by Houstus https://ift.tt/3Azhk4P
