Hi Mustache People...
I will give you the short story. I'm 40 and should have retired 10 years ago. But no... due to years of financial mismanagement, this is not yet fesable. But now I am getting my act together and want to make up for lost time. I am fortunate to have a good job and income in an otherwise depressed backwater midwestern town.
When I was looking at properties for my residence about a year ago, one property in particular stood out. The place was an 800 sqft hovel in an odd location, but inhabitable, and (then) currently rented. I thought at the time, sheesh this place would make a good rental property, but I ain't buying it for myself it's just too small and dilapidated. I found out later this property had sold for UNDER $10K, I happen to know the exact amount. Now, it's on the market again for 3 times as much. I drove by and the owner has made some obvious cosmetic improvements, but nothing significant. I've also determined it also has a valid rental permit good for several more years. I speculate the owner might take $10-15K for the place if he wants to be out from under it for some personal reason, but haven't asked.
I've been saving some dough. I could lay my hands on that much cash and buy it outright, but it would pretty much deplete my entire savings, leaving me stuck should I need to do a major repair either to the rental or to my primary residence, and I owe $40K on my primary residence anyway (just bought it 6 mo ago).
So the questions are:
1) Should I even think about buying this place? Should I pay off my main house ($40K) and student loan ($60k) first instead? I can drop $2-3k without batting an eye for 20% down on a $10-15K loan if the owner would sell it for that. I know for certain what he paid for it, and he'd still be making money. Then I could leverage that $100-150/mo loan payment against $300-400 rental income per month for some cash flow, right?
2) I had a hard time getting a loan for $45K... I have superior 800+ credit, but I had difficulty securing a mortgage due to borrowing so *little* money! Most banks did not want to talk to me unless I was borrowing $50K or more. Can someone recommend a lender, or maybe a different *type* of loan for $10-15k?
thanks,
ed