Tip: Build a Huge Cash Reserve.
Here is why:
1. You can buy with Larger Down Payment.
- Financing for investment properties will require a larger down payment than in the past (i.e. 20 - 30% down).
- There will be POSITIVE CASH FLOW.
- There will be EQUITY in property day 1.
2. Money will be set aside and available to manage the property vs using personal funds.
- Pay for maintenance and emergency repairs.
- Pay for Improvements (i.e. roof).
- Pay for Management Company (i.e. managment fees, evictions, and etc.).
- Pay mortgage when there is a vacancy.
I recommended putting down 25-30% when buying and having 6-9 months reserves set aside for management. This is extremely conservative.
Assuming you do your due diligence and you build a huge cash reserve for buying and managing your investment property, the likelihood of success is much higher. The chances of having a positive cash flow when the property occupied and be able to handle the maintenance, improvements, and emergency repairs that happen will not be a huge stress on your personal finances.
In addition, you will have sufficient equity in the property if you need to sell quickly or refinance and pull out cash.
Please note: More FORECLOSURES are coming and there is no better time than now to build cash reserves.
For more information on Buying a Home in Hanahan & Goose Creek, SC and Surrounding Areas contact Matt Naumann.
Web Link: Goose Creek & Hanahan News
Comments(0)