Home Buying in 94928>Question Details

Steve, Home Buyer in Boulder Creek, CA

Want to invest in a 270K - home in Cotati/RP area; how is rental demand? What is suggested down paymt to get cash flow with safty/maint buffer?

Asked by Steve, Boulder Creek, CA Sun Jan 9, 2011

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Hi Steve, Using your parameters, this is what we come up with:

Price $270,000 ... In today's market, in Rohnert Park, that would be a condo. Condo's, contrary to what some think, also make good rentals; that is how I started out. But in today's market, 3/27/2013, in Rohnert Park, the least expensive home listed on the MLS as available (active) is $315,000.

So back to the condos: In Rohnert Park, there are 6 between the prices of $175,000 and $248,500.

If you want the purchase price of $270,000, you have to wait, or go to another area.

But back to just purchasing a rental. We'll do some hypothetical numbers:

Purchase Price $270,000. So say a small single family dwelling with 3 bedrooms & 2 baths, about 1,300sqft. You can rent it for about $1,500 - 1,650 a month. (you can find this in Santa Rosa, so not just a 'made up price for a home').

If you put 20% down, your loan would be $270,000 x 20% =$54,000 down =$216,000 loan amount.

$216,000 at about 4.25 fixed rate 30 year loan = $1,094 for principal and interest a month.
Taxes and insurance would be another $270 + $50 a month = $320.
Total monthly Loan payment = $1,094.00 + $320.00 =$1,414.

Rentals have slightly higher interest rates than Owner Occupied homes, (and you can sometimes 'buy down' the interest rate); you should speak with a Real Estate Lender for interest rates today for an investment property.

So with 20% down, this scenario would work, as you would have a hundred dollars+ per month to put away for repairs, upgrades, and unrented months between tenants.

In today's market, rentals are rented quickly. Getting back to Rohnert Park: I found homes, both condos and single family, always rented quickly. I find that to be the case, in today’s market, throughout the Sonoma County area.

Rentals are a great way to prepare for retirement, but you need to have the right disposition to be able to put up with the 'downside' of rentals, OR use a property manager to help you manage your properties.

I would love to talk with you more about rentals. I have a number of them, and found them to be both rewarding and a times 'hair pulling' experiences! BUT, I would not be as prepared for retirement without them!

I do use a different scenario when I purchased most of my rentals, but I recommend that each person use what works best for them.

I hope this has helped answer your question. Please remember that I am using my experience to answer the question, and I am not giving you any legal advice. Attorneys, Tax experts, Lenders and Real Estate Agents work as a team, each with their own specialties.

Please give me an email or a call anytime,

SHER Miersemann 707-576-1234
Broker/Owner
Redwood Realty
RedwoodRealtyCA@aol.com

All answers in this forum (by me) are deemed to be reliable, but not guaranteed... Real Estate law and rules change frequently.
0 votes Thank Flag Link Wed Mar 27, 2013
You would need at least 20% down, I would imagine you could get a cash flow but we would really need to work the numbers out. I can offer you some of my time and best to meet up face to face. Love to help you out...

Taylor Mason
(707) 484-0295
taylormason@remax.net
http://www.taylor-mason.com
0 votes Thank Flag Link Tue Feb 15, 2011
My questions to you would include: why rohnert park? why 270k? what is "cash flow" to you? To me cash flow means I get positive cash income after ALL expenses, including "interest back to me" on my down payments. Why tie up good money for nothing? Doing that means eventually all my investment money will be NOT generating any income. I recommend you start following my blogs and articles. I'm a long time investor, now broker, with a great track record for both myself and my clients.
Web Reference: http://www.cjholmes.com
0 votes Thank Flag Link Mon Jan 10, 2011
Hi Steve,
20% down should do the trick. Call me I am the RealtyTrac Broker for 949028.
Thanks,
Pete Brocco
RealtyTrac Broker
(707) 571-8213
0 votes Thank Flag Link Mon Jan 10, 2011
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