I am trying to develop a repeatable strategy that lets us put cash into a deal and within a few months get the cash back and use it for the next property. (WITHOUT de-stabilizing the original investment)
- Purchase a fixer upper far below market value
This is a general scenario I have seen in a neighborhood I am looking at:
$10K - cost of property
$25K - rehab
$35K - total investment
$60K - Market Value of fixed up property
$825-$900- monthly rent of fixed up property
I know there are seasoning issues right now, so my thought is I will pay cash for the property and rehab, rent it out, then obtain a mortgage once it is completed based on the market value of the fixed up property. This scenario would leave about $25k (or 40%) in equity in the house and would let me purchase another.
What do you think? Will banks lend on properties like this? Anything I am not considering that could be a deal breaker?
Thanks in advance - Jessica
- Purchase a fixer upper far below market value
This is a general scenario I have seen in a neighborhood I am looking at:
$10K - cost of property
$25K - rehab
$35K - total investment
$60K - Market Value of fixed up property
$825-$900- monthly rent of fixed up property
I know there are seasoning issues right now, so my thought is I will pay cash for the property and rehab, rent it out, then obtain a mortgage once it is completed based on the market value of the fixed up property. This scenario would leave about $25k (or 40%) in equity in the house and would let me purchase another.
What do you think? Will banks lend on properties like this? Anything I am not considering that could be a deal breaker?
Thanks in advance - Jessica
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