In June, I mentioned that the real estate property I was looking at was back on the market after financing fell through for the initial buyer. In the last post, I mentioned that my real estate agent approached me and wanted to know if I wanted to continue and pursue this property. That night, I decided to go “all in”, and submitted a bid that was 7k lower than the winning bid. As it turns out, my offer was accepted!
That’s right, I’ve been under contract the past 30 days trying to close out this deal. After going through inspection, appraisal, and finally getting the loan (the part that took the longest), I officially became a homeowner today! Now that escrow has closed and I’ve received the keys, the real fun begins!
I’ve done a rough analysis, and figure that I can make more money renting out the entire property (as opposed to living there and renting out the other rooms). Besides, my commute would also increase, so I’ve decided to stay put. In the meantime, I’m hoping to rent out the place for ~ 2k a month. After factoring in mortgage, property taxes, insurance, property manager, etc., I’m looking to net $400 to $500 a month. This will bring in $4800 to $6000 a year (not factoring any unforeseen expenses). On the low end, this would amount to ~5.6% yield on the initial down payment.
If anything, I will be receiving positive cash flow to help me pay off my own monthly rent. In addition, I will also be able to pay down the interest and principal on a property that I will someday own outright.