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Expensive Two-Family |
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Hello Edith,
I am 26 and I am looking to purchase newly constructed property (ocean front). I can only depend on my income without any additional support. The house is in Rockaway, Queens (NY). It is a two family. The rental unit has 3 bedrooms, two baths, high ceiling, lots of windows, a storage room and a terrace. The other unit has two bedrooms, two baths, big windows, a back porch and a garage. The price is $669,000. The house will not be ready until fall of 2009. The company is asking 10% down. I so far have $30,000, borrowed $30,000 from family and $10,000 from a friend at a 2.9% intrest rate that I will return within 4 months. I bring home after taxes, free and clear $4,400 a month. I was already pre-approved by chase bank. My question is: is there too much at stake? Will I be able to afford it? No one in my family has experience with this and they all say I am in over my head. I would like some expert advise or to see an expert to evaluate everything. If you cannot answer my question do you have anyone you can refer me too? I desperately need the advice! |
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I have no idea what such an apartment would rent for in that area, but you should certainly find out. It's a big question, because otherwise you are certanly not qualified to take on such an expensive property.
Have you investigated how much you can expect in rental income? You should be studying similar rental properties, reading ads, talking to real estate brokers. Has the bank actually approved you to borrow enough to buy the property? If they think you can afford that particular purchase, that should reassure you.
But as a real estate investor, you should have your own CPA, right from the start, before you buy anything, and that's the person to help analyze your finances and answer your questions now. You need your own real estate lawyer, too, and again you should talk to one before you sign on to buy anything or give the builder a deposit.
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Edith
Originally published on April 17, 2008 |
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