## I want to buy a house within 12 months (March 1st, 2014)

As of the launch of this blog (3/1/13) I have spent **$23,550** in rent. I’m not okay with that.

The plan is to buy a multi family home, live in one section, and rent out everything else.

*These numbers will change as I get closer to my goal and this plan becomes a reality.*

## A three family home for $600,000

That’s a pretty good ballpark estimate for Astoria, Queens (where I have rented since 2011).

An FHA loan only requires **3.5%** down, which is **$21,000**.

So I need a loan for **$579,000**.

## Let’s add up the numbers:

Today’s estimated mortgage rate: **3.625%**

*as of 3/1/13 via Wells Fargo*

A 30 year mortgage with **$21,000** down will cost **$2,640.54** per month (according to this mortgage calculator).

A one bedroom apartment in Astoria can easily generate **$1,400 **per month (I know because that is what I’m currently paying in rent).

So I occupy one section, I rent out the other two sections at **$1,400 **each (I can charge more if one section is a two bedroom) .

I pay the bank **$2,640.54** per month. My tenants pay me **$2,800 **per month ($1,400 x 2 = $2,800).

## I live rent free in NYC and I put $159.46 in my pocket each month

But I’m not naive. That’s assuming a 100% occupancy rate. It’s better to calculate an 80% occupancy rate. It’s also important to account for repairs, taxes, etc.

So let’s just say that one year’s rent at 100% occupancy would be **$33,600 **(12 x $2,800 = $33,600). In this scenario, I put **$1,913.52** in my pocket (12 x $159.46 = $1,913.52).

But a more realistic scenario is an 80% occupancy rate, which is **$26,880** ($33,600 x .8 = $26,880). That changes things a bit.

If I pay the bank **$31,686.48 **per year ($2,640.54 x 12 = $31,686.48) and I am collecting **$26,880** per year, that means I will pay **$4,806.48** per year to live in NYC.

So “technically” I won’t be living rent free, but that’s only **$400.54 **per month! That’s unheard of in NYC.

It’s still a good deal.

*I need to learn my market well enough to spot a good deal in an instant. If I can get a discount price…the financial difference can be exponential.*

## So how do I get $21,000?

*I know I must also factor in the FHA insurance premium, closing costs, and operating expenses while finding first tenants, etc.*

I currently have two jobs as an interactive designer (web/front end designer & graphic designer). I am also actively freelancing. Combine that with being a newlywed (I got married in September) and there’s not much time for anything else.

Mathematically, I should be there within nine months. But life always has its unexpected turns…so I’m giving myself **12 months** to save up **$21,000**.

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