Im currently looking at foreclosed homes to buy for an investment. Im told that since this is going to be my first deal that it would be better for me to hold on to it and rent it out. I was approved for 100% financing and my realtor says that he can get the seller to pay all closing costs so that i wouldnt have to put up alot of my own money, Now my question is whats the best way out? rent it normally or try to rent to own? Any ideas are greatly appreciated.
You need to evaluate it. You need to look at what a realistic market rent is and what your monthly costs will be. It may not even be profitable to rent it. You can also look at what it would cost you to flip it. You need to sort this out before you buy it. Just because it’s a foreclosed home doesn’t make it a good deal.
well. i have figured out that in the end ill have at least $150 positive cash flow. i plan on holdin it for a long term investment, so i can sell later, or is that just a waist of my time? And as far as flipping the property, the realtor said that i would be paying uncle sam a bunch of taxex if i were to sell it right away, is that true?
What does $150/mo cash flow include? Does it include taxes, insurance, vacancy, and maintenance?
If you flip right away then you pay regular income tax on the property. If you hold it then you have options such as paying lower capital gains tax or a 1031 exchange.