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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308881  
Subject: Re: New here! Have questions! Date: 5/6/2013 9:29 PM
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i just got a promotion that starts in a few weeks.

Congratulations.

i will make about $500 more, net, per month. which is where the extra will come from.

That's an additional $500/month, net of retirement fund contributions (especially if you get a match, you are contributing to a 401(k), 403(b) or other retirement account, right?) - we'll say 6%; SS/Medicare tax - 7.65% and additional withholding at your marginal rate? - probably either 15% or 25% on the Federal level, plus state income tax, if applicable. So, your raise is for at least $820/month, assuming a 25% federal bracket and no state income tax?

Even then $500/month is only going to put $6,000 per year into your savings account. You need to save for emergency funds (both for your family and the investment property), the down payment, the closing costs, AND the fix up costs - all separately.

and i was just reading that a 20 to 25% downpayment was just fine. i guess i'll have to ask my bank.

For an investment property that is only worth $30k and needs repairs to someone who has a fairly recent BK? Or for someone who has stellar credit, could afford to pay cash and is buying a $200k invesement property? Higher risk = Higher down payment and higher interest rate.

i do agree, tho, i need to thouroughly figure out how much i can save. perhaps it will take 18months.

$500/month for 18 months is $9000. Assuming you can get a 20% down loan on a $30k property, that would require $6,000, which would leave $3000.

Does $3000 cover 6 months of expenses (including the new property monthly costs), closing costs and fix up costs?

Again, I think you are geting way ahead of yourself.

AJ
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