Planning on buying a house but my husband is in the MIlitary so we will be renting....?

[vargasfam2008]

My husband is in the military and we are planning on buying a rancher that is priced so low that it's hard to let it slip through our hands. We will be renting it out to my in laws and a contract and all the right paper work so they know this is business. The only problem is the house needs some fixing up maybe about 30,000- 40,000 to renovate, so I guess my question is would this be a good investment. We always wanted to flip a house but since this isn't a seller's market right now we will keep this house and rent it and since it's my in-laws they have already agreed that they won't mind the renovation taking place while they are there. We don't have a house where we are stationed at and the house we are planning to buy is about a 3 1/2 hr. drive. We live on base housing so our rent and utilities are taken care off so we would be making a profit from this house. My thing is should we make the improvements over time and use money will have which wont be enough to cover the budget or should we do it months at a time with an added loan to the loan we will get for the house? And how would that work will they incorporate the improvement loan with the initial loan or do we need to have two separate loans....and yes we have good credit, minimum debt just a car and one credit card...so will this be a wise decision. We will not sell the house till the housing market gets good again, if that cuz it's a good location and it would be a nice house to come to when we visit from our duty stations.

The rancher was priced at 150,000 then lowered to 120,000 over the months. And We offered 100,000 with them paying the closing cost. It's a 3 bedroom 1 bath but a huge yard to expand!

 

[steveko777]

If you like it go for it ! The only problem may be doing the improvements without making the house un-livable.. small projects often turn into monsters..If you can afford it --I would do all the work now and its over with... Since you are over 3 hours away--it is very important you hire a top notch General Contractor to manage the project. You wont have time to run up their every other day to supervise tradesmen...

 

[acermill]

Your first issue is that you are not buying a primary residence at this time. You are purchasing an investment property, and that means you will need at least a twenty percent downpayment for a mortgage. Home equity loans are generally not available on such investment properties.

If you are being upfront with your mortgage lender, he/she will advise the situation regarding financing of such a purchase.

 

[Georganna V]

Sounds like a really good deal! You didn't say what kind of financing you are going for, is it through a first time home buyers program? The reason I ask is because your husband is military. If you are planning on using his guaranteed home loan through the VA you will not be able to do it this way. They have a stipulation that you must reside in the property for 90 days before you can rent it.

Anyway, to answer your question. Whatever the house appraises at is what any lender will lend you. If your offer is accepted, pay the $250 for the appraisal to be completed. No one will lend you money until the appraisal comes in anyway. See the amount of the appraisal, that's the amount you ask the bank/mortgage company to lend. You can purchase the home and have money to do some or all the repairs needed.

Last thought, a lot of military people make these kinds of investments through their careers. They let a management company rent and oversee it so repairs can be made, and keep it rented and taken care of. Buy one wherever you are stationed, rent them out when you leave. This will build your investment portfolio and give you some extra income. As long as it is your primary residence at tax time, your first two homes (all the interest, which is primarily what you will be paying less taxes) can be tax deductible.

Probably more information than you wanted. But hope it helps.