Quote:
Originally Posted by mrbeverlyhills
6) Most rental calculators want a down payment %. I am using zero down payment and assuming a 100% mortgage. Even though I am paying cash now and will refi later. I think this is the most conservative approach as there is a cost of money regardless of where it comes from. Does this logic sound right? How can you be zero down AND paying cash? If you are assuming the seller's mortgage, make sure assumption is granted by the lender prior to close.
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I'm paying cash to purchase the property. Rental calculators factor in your mortgage interest when evaluating the cash flow of the property and when paying cash, everything looks great (from a cash flow perspective).
However, my cash is coming from my accounts that are currently earning and so I don't want to analyze the purchase as if the cash was free - it's not. So, to be conservative, I'm plugging in an "assumed" mortgage. I was just wondering how others do their due diligence.
Also, I'm not buying a duplex with a pool but I stated that any known routine, fixed, maintenance would be kept separate from "estimated" maintenance. Really wanted to know if 10% was a decent figure for estimated Maintenance. I'm only looking at decent properties and no slums.