Dumb Question Number One

I always hear about the twenty % down and hard money lenders and such but is there anything fundamentally wrong with cash for property and renovations? I’m planning on spending only something like 30-40,000 dollars total for property and then rent out. Is this dumb? Are there safer places to keep money these days?

Leveraging your money will allow you to control more properties and have more cash flow. The key is to not get in over your head. You can buy one place with cash and rent it for a certain amount per month or you can use your 40k and buy four or five properties and have four or five times the money coming in.
Buying a property or two for cash and renting them out is a hobby. Buying multiple properties could establish a life changing cash flow for you.

With all due respect justin and I say this knowing you have far more experience than me on the subject…Doesnt leverage/exposure to more properties increase your risk because of more repairs…more tenant issues…more water bills…more taxes…more vacancies…more maintenance…I agree that you leverage your money but you are a hands on owner…And that is the way to be and I commend you for it…But a landlord like myself who counts on a good property manager,leverage could be a recipe for disaster…Now a PM can rip you off on 5 houses instead 2…Now a PM can put bad tenants in 5 houses instead of 2…Now you couple those issues with 5 mortgages vs 2…just my 2 cents…

It’s all risk vs reward, just as I’m sure you could compare it to making a large play on a stock. You increase your exposure and you could crash and burn on a larger scale, but done right you can make a lot more money with leveraging over several properties.
Our business is much like Propertymanager’s (from what I can tell by reading his posts), but I think his tenants were another couple notches down the scale.
Seems like there are never really any “good” property management stories when people use a so called professional property management company. We do all repairs ourselves or I call my friend. I got a referral from our Realtor here for a plumber when we started in MS. The guy is a licensed plumber and electrician. He and his guys basically do anything we need. We’ve developed a good friendship. We give him a good amount of business, but he does everything way cheaper than anyone else.
It would be really rough is someone was getting charged $100 every time a repair man had to go out and do a silly little job.
We have about 1/2 of our units on Sect 8. Some of those tenants have to pay a portion of the rent; others pay none and the gov’t pays everything. Good part is we get our money on time. About 80-85% of the tenants are pretty good overall and most of them keep the houses fairly clean (even the sect 8 people). A lot of times PM companies will just throw whoever in there. We screen everyone as best we can.

In the end, I agree with you that the risk is greater. Our goal is to get all our properties paid off and keep them free and clear. We’re just trying to accelerate our wealth-building by leveraging over several properties. I really believe it’s all in how the business is run as to a LL’s success or failure.

Maybe I should reword my question. Are there any tax breaks etc… or such that I will be missing out on if I pay cash. Is mortgage insurance deductible at tax time for rentals as it is for ones personal home? Also I should say that this is my first jump into real estate investing and I thought I should get to know the problems and pop-ups involved without the added pressure of having monthly bank payments.
Thanks for all the input. Everything is appreciated.