Calling Investment home owners ... DB landlords...

[Hitman]

Asking for a friend...

Lets say it is 400K worth property. is it wise to buy the property cash down? in this scenario all the rental income after the Taxes/Insurances/HOA/Repairs can become profit and Owner get to pay Taxes on it.  Buyer savings up to $6,000 in closing costs. + perhaps a little leverage in negotiating the buying price. 

OR Take Mortgage, to write off the income with expenses added by interest payments? 

In general what DB landlords suggest?

@Konebhar6  @Sucker

Thanks in advance..

[Sucker]

13 minutes ago, Hitman said:

Asking for a friend...

Lets say it is 400K worth property. is it wise to buy the property cash down? in this scenario all the rental income after the Taxes/Insurances/HOA/Repairs can become profit and Owner get to pay Taxes on it.  Buyer savings up to $6,000 in closing costs. + perhaps a little leverage in negotiating the buying price. 

OR Take Mortgage, to write off the income with expenses added by interest payments? 

In general what DB landlords suggest?

@Konebhar6  @Sucker

Thanks in advance..

400K cash ante me vaadu middle class category anna.

[Hitman]

6 minutes ago, Sucker said:

400K cash ante me vaadu middle class category anna.

Edo chinna rental property. closing costs lu, 6.5% percent interest lu kattadam enduku ani.. kastapadutunnadu... 

[futureofandhra]

1 minute ago, Hitman said:

Edo chinna rental property. closing costs lu, 6.5% percent interest lu kattadam enduku ani.. kastapadutunnadu... 

Rental property ki demand vundha?

[Hitman]

Just now, futureofandhra said:

Rental property ki demand vundha?

$2300 ki desi poragallu untunnaru...

[Bitcoin_Baba9]

This suggestion is my personal opinion

Mottham unna $400K cash antha theeskelli oka rental property meedha pettadam aithe not a good idea. I always put only 25% (investment homes need minimum 20-25% down) on all my investment homes. Break even avuthadu on rent vs mortgage+taxes+insurance anukunte at max go for 30%. Migithadhi save hard cash for next deals or stock market idea unte akkada pettukodame. The purpose of investment homes is to someone need to pay your mortgage+market peruguthu illu value perigi repu refi cheskoni cashout cheskovali kaani unna cash antha dump cheyyoddhu okka property meedha.

[ManchamKodi]

buy for 400k in cash and rent to students .

you will save money on mortgage intrests

[Konebhar6]

39 minutes ago, Hitman said:

Asking for a friend...

Lets say it is 400K worth property. is it wise to buy the property cash down? in this scenario all the rental income after the Taxes/Insurances/HOA/Repairs can become profit and Owner get to pay Taxes on it.  Buyer savings up to $6,000 in closing costs. + perhaps a little leverage in negotiating the buying price. 

OR Take Mortgage, to write off the income with expenses added by interest payments? 

In general what DB landlords suggest?

@Konebhar6  @Sucker

Thanks in advance..

Cash is king. In this market uncertainity, better opportunities may come. MAY being the key word here. 

So I would buy the property even if its break even and put down only 25% (whatever necessary minimum % to buy rental property) and rest 75% I will keep in a High yield bond like HYDB. He does not have to worry about paying 6.5% interest rate. He is still making it with his rest of the cash. Problem Solved.

[phatposts]

400K ki 2300 rent is a very bad investment. 

Daaniki thodu all in cash is a horrible decision. 

Mothaniki idoka worst investment of his life avtadi

[Hitman]

15 minutes ago, Konebhar6 said:

Cash is king. In this market uncertainity, better opportunities may come. MAY being the key word here. 

So I would buy the property even if its break even and put down only 25% (whatever necessary minimum % to buy rental property) and rest 75% I will keep in a High yield bond like HYDB. He does not have to worry about paying 6.5% interest rate. He is still making it with his rest of the cash. Problem Solved.

Good info. is it better to buy HYDB instead keeping the money into Webull Cash management account which is only paying 4.3% daily interest?

i looked at the history - in the pandemic it came down 50.34 to 43. Didn't collapse as stocks. if i understood correctly, these bonds doesn't crash as fast as stock market right? unless the company's credit rating falls... 

[Hitman]

18 minutes ago, phatposts said:

400K ki 2300 rent is a very bad investment. 

Daaniki thodu all in cash is a horrible decision. 

Mothaniki idoka worst investment of his life avtadi

Correct, by all means it is not a Investment at this time.  The monthly yield also negative at this time.  it turns positive after 5 years of ownership. assuming the deposit interest rates go down, it can become better investment after 5 years.. 

[psycontr]

3 minutes ago, Hitman said:

Correct, by all means it is not a Investment at this time.  The monthly yield also negative at this time.  it turns positive after 5 years of ownership. assuming the deposit interest rates go down, it can become better investment after 5 years.. 

maintenance, vacant time, appliance replacement etc etc... will it be profitable ?

[Hitman]

9 minutes ago, psycontr said:

maintenance, vacant time, appliance replacement etc etc... will it be profitable ?

Breakdown Over Time for 10 year hold. The below calculator assuming Expenses and appreciation at 3% annual.  5% vacant time.

Total benefit after 10 year hold is 56%. 

Year	Annual Income	Mortgage	Expenses	Cash Flow	Cash on Cash Return	Equity Accumulated	If Sold at Year End
							Cash to Receive	Return (IRR)
Begin				-$406,000
1.	$27,360	$0	$15,100	$12,260	3.02%	$412,000	$379,040	-3.62%
2.	$28,181	$0	$15,553	$12,628	3.11%	$424,360	$390,411	1.16%
3.	$29,026	$0	$16,020	$13,007	3.20%	$437,091	$402,124	2.80%
4.	$29,897	$0	$16,500	$13,397	3.30%	$450,204	$414,187	3.63%
5.	$30,794	$0	$16,995	$13,799	3.40%	$463,710	$426,613	4.13%
6.	$31,718	$0	$17,505	$14,213	3.50%	$477,621	$439,411	4.47%
7.	$32,669	$0	$18,030	$14,639	3.61%	$491,950	$452,594	4.71%
8.	$33,649	$0	$18,571	$15,078	3.71%	$506,708	$466,171	4.89%
9.	$34,659	$0	$19,128	$15,531	3.83%	$521,909	$480,157	5.03%
10.	$35,699	$0	$19,702	$510,558	3.94%	$537,567	$494,561	5.14%
Total	$313,652	$0	$173,105	$229,108	56.43%

[Hitman]

https://www.calculator.net/rental-property-calculator.html?cprice=400%2C000&cuseloan=no&cdownpayment=20&cinterest=6&cloanterm=30&cothercost=6%2C000&cneedrepair=no&crepaircost=20%2C000&cafterrepairvalue=260%2C000&ctax=6%2C000&ctaxincrease=3&cinsurance=3%2C000&cinsuranceincrease=3&choa=3%2C600&choaincrease=3&cmaintenance=2%2C000&cmaintenanceincrease=3&cother=500&cotherincrease=3&crent=2%2C400&crentincrease=3&cotherincome=0&cotherincomeincrease=3&cvacancy=5&cmanagement=0&cknowsellprice=no&cappreciation=3&csellprice=400%2C000&cholding=10&csellcost=8&printit=0&x=Calculate

[Bulls_Rose]

Any lender that offer loan on land. Oka 10 acr land 1.2 mil undhi. Loan process ela untadi for land ki? 

Any thoughts