Quote:
Originally Posted by Mason3000
I'm looking to sell our current home and cash out around $100k, then use those profits to buy a foreclosed duplex for $50k cash, plus another (guessing ?) $20k from the sale profits to rehab the property.
So, I want to make sure this makes sense. Does it? Is my math wrong? Am I leading us down the wrong path?
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After the $70k that you used to acquire this property, what do you think the value will be, $130-140k?
The numbers make sense but the wife doesn't care about the number. You might need to frame it in other context. There is no answer if you are going down the wrong path.
Quote:
Originally Posted by Mason3000
we'd have documented cash flow & the ability to approach the bank for a loan against the duplex to do whatever in the future.
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Not exactly, but can get into more details if desired.
Quote:
Originally Posted by sj08054
You are under estimating what it takes to.
1. Identify a good rental property.
2. Rehab foreclosed property
3. Be a landlord.
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If you never rehabed, even if you do have friend, take your budget and double it, those friends will eat and drink a lot of beer
Also keep in mind you are using your friends to make money and not just to fix your "Last Home" be sure to spread the wealth.
Don't use "cheap" material for rentals, no frills commercial or strong stuff is better, it is the labor which cost more.
Don't forget to count the holding cost while it is under rehab, call it all of your lost rent of $1700 a month.
D
Quote:
Originally Posted by RickTucsonHomes
A happy wife makes for a happy life.
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Can't be said enough, but you can't move forward resenting her for it.
Quote:
Originally Posted by Nodpete
You're right, I shouldn't have said "No pluses", but his plan will only work if he gets tenants right away, and doesn't have any negative cash flow. Plus, what does he do for income while he's rehabbing ?
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There is $30,000 extra after the sell.
I'd consider financing it instead of paying it all cash initially if you can, or cash, rehab, then finance it, then pay if off later. You don't want to have your $70 tied up if something happens.
As far as your wife's desire to get into a larger home, if you used that down payment to buy another primary residence, would your mortgage payment be more or less than your current payment. If you are getting into a larger mortgage payment, you just used your "profit" to put your self in a bigger hole. If you would have bought this bigger house to begin with, you wouldn't be in this situation today, instead, your "raise the family" home would just be partially paid off.
You are probably going from 30 year fixed for another future 30 year fixed and starting all over again.
Can you just do a refinance and pull the money out of your house to buy and fix the duplex?
Are you worried that the value of your current home will go down?
If you could pull the money out of your 1st home and finance the duplex with it , would you be able to rent our your house and still make a profit, you could potentially have 3 units and possible appreciation rather than just a duplex, sell them all in a couple of years, pay your taxes, and pay down your new home significantly.
If you had enough money for your "last house" even with a low down payment, buy it a year after you refinance or buy it as an investment property and let someone else pay it down and move into it later, good luck selling this one to your wife.