ckpalmer06 Posted October 30, 2006 Report Share Posted October 30, 2006 my husband and I are buying a condo rental property that has one additional unit besides the one we live in, we are offerring 395,000.00the seller who isnt using a real estate agent is offerring to take a 2nd mortgage for 20% that i think we would use as our down payment, that way the loan would be for 315000, am I right?Maybe I am not understanding it all!Its seems like a no brainer to us because the rental units go for 1500$a month and we have a family in their on a 3 yr lease. our mortgage payment would be about 2000 maybe a little less, but what happens with the 20% loan the seller took out on a 2nd mortgage?do we pay that as well, at the same time as our first?ThanksCrystal Link to comment Share on other sites More sharing options...
firstsource Posted October 31, 2006 Report Share Posted October 31, 2006 It is just like having a traditional 80/20 loan, where the 80% is provided by a bank or lender. The difference is that instead of the 20% loan (or 2nd) being provided by a bank/lender it is provided by the seller. If your credit is not super then it can make getting your loan cheaper and easier. Good luck and thanks for coming to the site.Charles Link to comment Share on other sites More sharing options...
PolarBearnCO Posted November 6, 2006 Report Share Posted November 6, 2006 Its seems like a no brainer to us because the rental units go for 1500$a month and we have a family in their on a 3 yr lease.... a no brainer if you will always have that unit full... a no brainer if they always pay their rent on time (future, not past). Never know, tomorrow that family's provider may get into a car accident and have no income for months... never know. I'd seriously consider an investment property and make sure you can pay the mortgage if the rental is empty. At the end of that lease, it could take months to fill it again, with loss of income. Also, make sure you look into tax laws. That $1500 in rent may be taxable as "self-employed" which may mean you have to pay 15% social security, along with state and fed income taxes. You could be left with only $850 per month income after taxes. Also, make sure you can afford the upkeep. Paint and new carpet aren't cheap, and you won't get $1500/mo if you don't keep the place looking good. I'm surprised you can get $1500/mo anyway. Can you get it in the future? I'd pay 10% interest to own before I paid $1500/mo to rent.I really don't know. Hmm, doesn't sound like a no-brainer anymore. Link to comment Share on other sites More sharing options...
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