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Nina Said:

How do you make money with a rental?

We Answered:

Investing in a rental will take a while to make money; it's one of those buy and hold investments. You will take a loss for a few years but once you break even you are good to go and after a few years you will start to get some cash flow. The biggest advantage is that you will enjoy the appreciation of the property and can use the equity to finance others. It really depends on what area you are in. If you buy in a good location such as NYC in 10yrs your property will easily double to triple the value.

Myrtle Said:

About how much would our mortgage payments be?

We Answered:

There is a 2.25% vendee fee for VA loans (essentially because the terms are so good) but this can be added into the loan. There are also a range of other fees, so I'll bet the loan runs to about $127,000 when all is said and done (this includes a few 1000 for an escrow account).

$127,000 at 5% for 30 yrs is $680 per month. About $110 for taxes and maybe $40 per month for insurance. There is no PMI on this loan.

So, all total you are looking at about $830/ month.


Best luck.

Phyllis Said:

How long will it take me to pay off my mortgage?

We Answered:

21 years 3 months there abouts

Peggy Said:

Questions about buying a house from my parents?

We Answered:

Your parents can give you a "gift of equity" that can pretty much take the place of the downpayment.

You cannot borrow more than the purchase price. In fact for the first year, you will have to use the purchase price for the value. If you get $X in a gift of equity, they will lend you the difference between that and the purchase price.

Call a lender. What you need is a lender and a title company, unless the state you live in requires a lawyer for closing a purchase of real estate. As a loan originator, I did several loans like this with a family member selling another property. Between your loan officer (I'm not talking about a broker, but the person at the bank or mortgage company) and the title officer, they'll know what to do.

Another option is your parents could carry the loan, unless they need the cash or you aren't comfortable doing that.

Audrey Said:

What advice would you give to a young person contemplating buying her first home?

We Answered:

Well, Palo Alto has an extremely expensive market. A standard 3 bedroom, 2 bath, 1300 sqt home in a decent neighborhood in Palo Alto can range anywhere between 850k to 1.2 mil.
http://www.coldwellbanker.com/servlet/Se…

Even the tiniest least desirable homes are in the neighborhood of 900k -1 mil. This house listing is a prime example. http://www.coldwellbanker.com/servlet/Pr…

I don't have any background in really estate (so you should probably not take my advice too seriously) but assuming you decide to purchase a decent 900k home -- Let's say you put a down payment of around 180k and get a standard 30 year fixed mortgage with a 6% interest. You would need to make monthly payments of about $,4,400 a month - Which is about $53,000 per year. Most 3 bedroom rental units in the Stanford-greater bay area are in the $2,750-$3,500 range -as per craigslist. The average house room rental for single family homes in Palo Alto is around $650...so you would have to get at least 7 roommates to get a profit if your monthly mortgage fixed at $4,400. So, you could potentially end up with a pretty hefty monthly difference even after you rent out all of the rooms...which could then lead down the road of miss payments and eventually foreclosure.

As far as acquiring a loan is concerned, the most important criterion that most lenders look for is usually the ability for you to make the payments. ...So net worth, stable income, credit history, FICO scores, and employment record. They would probably also require a minimum employment status from a single employer for a give time range (let's assume 3-4 years) ---just to give validity to the borrower's claim of repayment. I don't know if acting/modeling would be considered a stable income...just because the industry is almost exclusively based on vanity...I'm not saying that you will break a leg or something and not be able model or act but even the modeling industry has trends. For instance, the early 2000s-present time have been very good from African models and models with very distinct ethnic-racially ambiguous features (Alek Wek, Liya Kabeda) ...they could easily be old news several years from now...and East Asian models might be the next new thing...or women with square jaws..or some other "different" feature...and they might also put into account your status as a full time student and how that would play a role is your ability to pay your mortgage.

I think that you should definitely invest your money when you go off to college but real estate is a VERY serious investment. It would probably not be wise to invest 800k or so of your savings at such a young age. I personally wouldn't invest more than 5k. College is a GREAT place to exercise your entrepreneurship skills and there are MANY business endeavors that you could get it.

Eg.
You could invest in a screen printing machine and design/print shirts for college clubs/interest groups/frats/sororities/events. College organizations LOVE shirts and you could make a TON of money printing shirts.

You could tie some of your passions with your investments. For instance, you could partner with a non profit in Mexico or Cali and sell your own bottled water in the campus (It's actually not hard to find a natural spring and a company that can purify the water and bottle it ----lol, with your own logo --a portion of the profits could go to your favorite charity and most college aged kids would not mind supporting such a cause-biz).

You could start a college-high school tutoring biz. My sister gathered a few friends and recently started a h.s tutoring biz for h.s kids in NYC. Parents are MORE than willing to pay college kids (especially those who attend high ranking schools) to tutor their kids. My sister pays her friend a fixed wage ($6/hr) to tutor h.s kids (Algebra, SATs, Chemistry, Biology, general college prep e.t.c) --the parents/kids pay her $18/hour so my sister actually ends up making a VERY nice profit. The more friends/college students she recruits to tutor her clients --- the more money she makes.

The point is, there are MANY innovative ways to invest-make money in college. Real estate (even now) is not always the best investment....and chances are, it would be very difficult for you to get a loan so keep your eyes open for any business opportunities that come your way.