i am looking into purchasing properties that are in the 30k to 60k range i will be purchasing these properties cash but i cant figure out how to free up my money to purchase more. what will be the best route to take ?
thanks
b :banghead
Why do you want to pay cash? Real estate is no better than any other investment except for leverage. You may as well buy stocks.
If you buy a house for $100,000 cash and it appreciates 10% it is now worth $110,000 and you have made $10,000. That is 10% on the money you have invested.
If you buy that same house and put $10,000 cash into the house and borrow the other $90,000 and it appreciates the same 10% and is now worth $110,000.you still only made $10,000 but because you only have $10,000 invested you have made 100% on your money. You also have $90,000 available to invest in 9 more houses. So for the $100,000 you could have 10 houses and be officially declared a real estate mogul. Or you can have a house and be a landlord. Which is best?
the reason i say cash because i will be purchasing some of the properties from sheriff sales …can i refi on a home that cost 30k ? my goal is to rent these properties out and pay down on some of the principle from the rent roll … i know there is hard money but are intrest only.
Yes, you can refinance them. If you’re buying a house for $30K, it should certainly be worth a significant amount more, such as $50K. Therefore, when you refi, you will only need a LTV of 60% (of $50K) to get your $30K back. The other issue is seasoning. Many banks will want you to own the property for 6 months or a year before they will do the refi.
Mike
Sounds like an awesome plan. What I am not sure of is the hard money fees, interest and a stack of papers 3 foot tall for those 10 houses on loans?
hardf money lenders require little or NO Paperwork but hi interest and ltv of 60 or 70 %. and lots of points. leaves little room to still make $$ unless you are buying really low . if you pay 30k for a house worth 50k then prob. ok …but if its 30k because it needs 20k in repairs then its no bargain since its arv is the same 50k you actually paid!!(30k + 20k repairs + interest + points = no profit for you !!)