Cash flow negative on Duplex if i live there by only $100, good idea?

Hi, I am just looking at getting into real estate investing and was wondering if anyone could help a newbie out.

I found a 4bd 2ba duplex listed for $139,000 in a great location. My idea was similar to a lot of others just getting into real estate investing… rent out one side, and live in the other.

If I calculated correctly, I would be paying $507 a month on a $100,000 mortgage at 4.5% for 30 years. This is assuming I put down $30,000 and somehow made a deal with the owner to purchase the home for $9,000 under the listing price. Property taxes would be $247/mo, Insurance $46, and ideally would like to set aside $250/mo for repairs etc. The average rent in the area is around $950, so I used that as a reference for how much I would be renting out the other side for.

So, I would be paying $1,050/mo, being cash flow negative $100 a month. “Renting” for $100 a month doesn’t seem too bad to me, as my college is 3 minutes away. But another idea I had would be to rent both sides out, go live at an apartment close by and actually rent. If I did this, I would be bringing in $850 a month in profit, and saying that $450 went to rental expenses at my apartment, I would be making a monthly profit of $400 (Maybe a little less if I were to pay for the water bill and sewer, trash is free)

I am brand new to real estate and have been doing a lot of research. This duplex property would be my first real estate purchase ever. . I just don’t know if this is a good idea especially with the inflated housing prices. Am I missing anything? More experienced real estate investors, what do you think about my ideas?

submitted by /u/rfoles
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Hi, I am just looking at getting into real estate investing and was wondering if anyone could help a newbie out. I found a 4bd 2ba duplex listed for $139,000 in a great location. My idea was similar to a lot of others just getting into real estate investing… rent out one side, and live in the other. If I calculated correctly, I would be paying $507 a month on a $100,000 mortgage at 4.5% for 30 years. This is assuming I put down $30,000 and somehow made a deal with the owner to purchase the home for $9,000 under the listing price. Property taxes would be $247/mo, Insurance $46, and ideally would like to set aside $250/mo for repairs etc. The average rent in the area is around $950, so I used that as a reference for how much I would be renting out the other side for. So, I would be paying $1,050/mo, being cash flow negative $100 a month. “Renting” for $100 a month doesn’t seem too bad to me, as my college is 3 minutes away. But another idea I had would be to rent both sides out, go live at an apartment close by and actually rent. If I did this, I would be bringing in $850 a month in profit, and saying that $450 went to rental expenses at my apartment, I would be making a monthly profit of $400 (Maybe a little less if I were to pay for the water bill and sewer, trash is free) I am brand new to real estate and have been doing a lot of research. This duplex property would be my first real estate purchase ever. . I just don’t know if this is a good idea especially with the inflated housing prices. Am I missing anything? More experienced real estate investors, what do you think about my ideas? submitted by /u/rfoles [link] [comments]

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