Question by MNNNN: Fix credit score, I want to buy a house…help please?
Fix credit score, I want to buy a house…help please?
Ok, so I got my income tax, 8k
I have a 90k (sales) a year job and my wife has a 55k (Paralegal) a year job… and since we want to joint purchase the property, we have a 145k a year salary combined
Before we got stable as how we are now, we were in pretty bad shape. We are looking to buy an apartment building that cost 500k, we already have 50k saved up… but we have HORRIBLE credit scores from stuff we did about 5 years ago… credit cards never payed, had my car reposes, phone, cell phone tv and light bill in collection…. in total, its about 11k in collection
We kinda let the bills go to hell since we justed figured we were making enough to pay everything off and would not need our credit, ever.
Well, we wanna buy this apartment building, with 6 apartment inside from a friend of mine, it gives a revenue of almost 60k a year… needs some work here and there, but I really want it, and he gave me that great price (Valued at 550k)
Here is my question: can we pay small amounts of monthly installments and have our credit score improve little by little over a period of time (we want to buy the apartment in about 6 months), or do I have to pay it ALL off?
what can I do? whats the best way to go about buying that apartment building/raising credit score?
thanks a bunch
Fast Credit Repair
Best answer:
Answer by real estate guy
first you MUST pay off the judgments or NO one will loan you the money.
2nd, you will need at least 20% down, which you do not have. This is an investment property and you will need an investment loan. It may in fact be as much as 30% down.
Now, lets look at numbers.
550,000 cost, 440,000 loan It will cost you around 3800 a month in mortgage payments or 45,600 a year. This means that your total mortgage payment equals 75% of your total income. Assuming that the apartments are rented 100% of the time.
Do you pay any of the heating, electric, etc? If so, there is a huge expense (especially for heating).
As a rule of thumb, for every 10 years old the property is, figure 3% of the total income for repairs and upkeep (this on top of a regular 5%). So if the building is 50 years old, figure an expense of 25% of the total income = $ 1,000 a month or 12,000 a year.
I recommend that you DO NOT DO THIS. Apartment buildings are HARD to resell. If you really want to get into investment real estate, purchase separate units that can be sold off as needed.
What do you think? Answer below!
