My goal of purchasing two properties per year to use as rentals is under performing right now. I have made a few offers, but most properties aren't cash-flow positive with only 10% down.
Let's take for example, a $200,000 home (below median home value in Utah). If I were to pay 10% down I'll be financing $180k. At 7.5% (a normal non-owner occupied investment property rate), my 30 year fixed payment is $1259 which does not include taxes and escrow. A quick search of the MLS shows 4 homes listed exactly at $200k today and all of them are 3 bedroom. There are several pages of homes for rent that have 3 bedrooms in the Daily Herald and the price range is significant. The 20 that I looked at had rents from $700 to $1450, with an average price around $1100. This means I am $159 negative cash flow per month without considering escrow, vacancies, and repairs. If I go with an interest only loan, my payment would go down to $1125/month which in the end still means negative cash flow.
Utah has become a market where you have to get a really good deal on a property, or pay 20% or more down, before you can produce a positive cash flow.
~Happy Investing
Friday, June 29, 2007
Friday, June 08, 2007
Prosper.com
I have been a lender and borrower at prosper.com for several months and am very impressed with their offering. I took out a loan for myself of $1000 and because of my AA rating received a rate of only 7%. I then re-invested this money back into prosper.com to lend out to other higher-risk borrowers at an average rate of 20%. I realize there will be several borrowers who will not repay these loans so I expect my actual returns will be 10-15%, but this is extra play money that I am willing to take a higher risk in order for potential higher returns.
If you are in need of a loan, I would love to assist you in setting up your loan request and getting it funded. Prosper collects 1% from all loans in order to run it's business. I receive a small referral bonus directly from prosper so I am motivated to help you get your loan. Follow the link below to sign up.
Otherwise, if you would like to lend money out in order to receive much higher returns than your bank is able to offer then the link below is for you. You and I both receive a $25 referral bonus when you are approved as a lender.
See you on prosper!
Please ask if you have any questions.
Tim
http://tmellor.com
If you are in need of a loan, I would love to assist you in setting up your loan request and getting it funded. Prosper collects 1% from all loans in order to run it's business. I receive a small referral bonus directly from prosper so I am motivated to help you get your loan. Follow the link below to sign up.
Otherwise, if you would like to lend money out in order to receive much higher returns than your bank is able to offer then the link below is for you. You and I both receive a $25 referral bonus when you are approved as a lender.
See you on prosper!
Please ask if you have any questions.
Tim
http://tmellor.com
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