Doable? (insurance, credit, rate, loan)

[fyrfyter02]

Here is my scenario:
I live in an apartment connected to the main house. I am renting the apt and a young family is renting the house. There is also a studio apt above a detached garage.
My rent is $600
Young families rent is $1000
Studio rent is $500

I have $120k down and an income of $34K per year with no debts.
The entire property is for sale at lets say $400K

Would I be able to qualify using the rents from the family and studio, and continue living in the attached apartment?

Thanks

[SmartMoney]

How is the property zoned? Is it a 3 unit property?

[MrRational]

Originally Posted by fyrfyter02

I have $120k down and an income of $34K per year with no debts.
The entire property is for sale at lets say $400K

Legality of the property aside... and specific tax/insurance costs aside...

$400K - $20K (negotiation) - $80K (20% down + closing) = ~$300,000 mortgage.
At current 3.92 rate with a 30year amortization LINK = $1400/mo ($16,800/yr)

Plus taxes & insurance and maintenance allowance.... and you're well over $22,000 per year
$1000 (house) + $500 (studio) = 1500 x12 = $19,200 gross rental income
The ~$3000 difference is less than you pay in rent now.

Yeah... it's absolutely doable.

Would I be able to qualify using the rents ...

If your personal credit is solid and the property passes codes for the purpose.

[thelopez2]

Originally Posted by fyrfyter02

Would I be able to qualify using the rents from the family and studio, and continue living in the attached apartment?

Thanks

It depends what the appraisal say.

[Grumpty]

I don't see how you could qualify with your income being at only $34k per year. Even using 70% of the rents ($12.6k per year) that only puts you at about $47k which I would guess maxes you out at about $180k'ish for a loan. I wouldn't even recommend going that high as I am of the opinion you shouldn't take as much as the bank offers.


In this case you might be better off trying to buy a smaller investment property to rent out and keep your current living situation. You should be able to find a property that will rent for a higher percentage of the purchase price than what you are currently looking at. If not then you are probably better off investing the money elsewhere anyways.