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is a 500k 4plex a good investment in concord ca?

Date: Thu, 05/07/2009 - 23:38
Submitted by on Thu, 05/07/2009 - 23:38
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the 4plex is in okay condition. they are all 2br 1bth. the rent in the area for this type goes for 1000min and around 1300 max. My family would live in one of the apts. we would rent the others.

my mother makes 2k a month, my brother about 1k, i make about 400. 3400 all together-food&bills= 2700

if we rent the other 3 apt for 1100 we would get 3300+2700+6k. the monthly payment ont he property i guess would be 3k. and 3k surplus. but we would still have to pay for sewage garbage, gas. we would do the maintanence our selves.

what are the up's and downs of buying the property? it is in a good location. it would easily rent out, but would it be good in the long run? and how long would it take to make profit? approximately? the profit of course would go to remodel the building. is it a good investment? how much would the property tax be?

and the price right now is 500k, but they are open to offers. what would be agood offer?


This is a tuff one. You first would have to look and see if you would qualify for financing. FHA requires 3.5% down. The other issue is the underwriter will not look at the potential income the property will produce, they will look at the income you have now.

In order to use all the income you would have to have all 3 people on the deed and on the loan. Which means all 3 would have to have a credit score above 620. The other issue is you only have 3400 monthly income between the 3 of you. I ran some quick numbers. 500K purchase price. The down payment required would be 17500. The mortgage payment alone would be 2590 per month at a rate of 5% on a 30 year fixed. That would put your debt to income ratio at 76%. You wouldn't qualify because the debt to income ratio is too high.

Given the circumstances I would say this wouldn't be something you should invest in.

I hope that helps.


Submitted by sassy_lil_brandy on Fri, 05/08/2009 - 06:45

sassy_lil_brandy

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as a current investment property owner, i'd like to comment here..up's far exceed the downs on this one..as long as you can make the morgage and break even and live there, its a good investment. however, unfamiliar w/your locale, you must consider down time. how many of the units MUST be rented to break even(meaning tennants pay your morgage)? is this obtainable in that locale? you will definately enjoy the taxes on this property, EVERYTHING you pay for will be itemized from water/sewage to the nuts and bolts for the screen doors..if you can get the loan, it would be a nice investment..short term but much better long term investment..i lived in one of our duplexes for 10 years and NEVER paid the morgage out of my monthly income. i lived for free and got to good credit paid as agree and someone else paid for it! awesome opportunity if you can get financed..


Submitted by on Fri, 05/15/2009 - 20:49

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