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Old 04-28-2013, 06:04 PM
 
1 posts, read 1,040 times
Reputation: 10

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I am looking to purchase my first real estate property to rent out. I want to put down a 20% down payment. I would like to put 75% of the real estate income towards the mortgage and the other 25% towards a separate bank account for repairs or anything else. I would like to have $0 coming out of my pocket towards the mortgage (ignoring the down payment).

So my question is what areas should i look into and should i do single or double family houses?

What are the best areas for renting?

What price range should i be looking at?

Any other advice on how i should go about doing this?


Thank you for the input in advance!
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Old 04-28-2013, 06:28 PM
 
1,646 posts, read 2,782,214 times
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I will refrain from giving specific advise, but please do not become a slum lord. Take care of whatever property you buy and try to care about the tenants and the community they live in. Nothing worse than a "real estate investor" who buys a house and lets it go to s--t.
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Old 04-29-2013, 08:25 AM
 
1,319 posts, read 4,250,408 times
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Do the math carefully. You pretty much need to be a shady LL in order to break even with just 20% downpayment and hope that rent covers the mortgage. Plus I don't think you can get an investment mortgage with just 20%, you need a lot more skin in the game to get an investment mortgage. Unless you were planning to buy it as your own and not investment but pretty much have it as investment. Which means you'll be fully liable rather than setting up a company to run the investment property so that if investment fails. Just the company is screwed. Not you.

Also you should consider that real estate is illiquid asset so if you don't want to find yourself going bankrupt because of a bad tenant (NJ is very tenant friendly state)... It'd be great if you can pay the mortgages yourself (your own home and investment property). It could take months to kick a bad tenant out without breaking the law in NJ which means you need to pay the mortgages so if you can't juggle two mortgages or 1 mortgage and 1 rent (of your own rent)...then you will be screwed fast.
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