? for PM or anyone else that has a large rental portfolio....

Mike or anyone else that cares to answer…

Do you purchase your properties cash and than refi them? Mike Ive read alot of your posts and you always preach buying them at 70% to the ARV so you dont have to put any or little money down on your properties. Conventional thinking tells me in order to move fast enought to get a house at 70% to its ARV you need to be able to move fast with your own cash…fact?

Thanks everyone,


If you’ve got the cash to buy and then refi, then that is an excellent strategy. Most banks will not loan more than 70% of the appraised value if you are going to be getting cash back, so you’ll have to buy considerably lower than 70% if you need money for fix up, etc.

However, at least here in Ohio, there is no rush to find good deals. The real estate fad is over in most of the country and competition for deals is almost non-existent. In a boom market, all of the guru hyped marketing might be a necessity, but certainly not in this environment.

To answer your question directly, I have purchased my properties in just about every way possible. I’ve paid cash and then refinanced; bought sub 2; bought with owner financing; bought with conventional bank financing; and bought using a lease-option. Whatever works!

Good Luck,


Thanks Mike…I live in San Antonio Tx so the real estate fad and market is on fire here…to get the good deals cash is almost a must. Hope it cools of a little bit so all the “bandwagon riders” get scared off and go do somthing else but I dont think that TX will slow down much at all over the next few years.

Thanks again

I get 90% loan to value with fix up cash in the loan. I still won’t buy unless it is 70% or the deal really doesn’t work even if the bank will finance it.

i always finance (banks and sometimes seller carryback) unless it a flip and then I’ve done cash. I always do full doc on property I intend to hold so I can have a lowest cost-basis going forward. I usually stage my improvements out over 1-2 years as units turn over; that allows for a manageable cash flow, up the rents when a unit is clean and freshen up. I usually load some of those cost in “capital” improvement when I work up my analysis PRIOR to buying.

Its not the most glamous strategy, but it works well and keep the risk low. I tend to take on problem properties that are “rough around the edges” as they fit this model well. I avoid complete dumps as I don’t do this full-time. I leave those to someone else.