My Current RE Plan

[John Chan]

Currently, I have two houses under contract that I will pay 100% cash. I am currently looking at foreclosures ONLY in the Cincinnati area.

One of the houses I have a 50/50 partner. I will pay for the house 9.5k, and he will rehab (est. $5-6k rehab) and manage.

The other house, 20k, (3 units, 2 bds each) is 95% rent-ready. Out of the 50 forclosures I've seen, this was the best condition for a foreclosure. This needs a door replaced and some cleanup, that's it.

Both houses have approx 50% ROI when rented out and paying cash (modest estimated, I've even factored in 5% vacancy and 5% rent collection loss)

I check out a lot of foreclosures (I've seen about 50 this month from various sources), and I put out a lot of cash offers. So far I only have two accepted.

So far, this is my plan. Pay cash for a multi-family, rent out, then either wait to get my return on investment or sell for decent profit, and then repeat the process to buy more multi-fams. The downside is that I don't have much cash left to buy more houses. I cannot get a loan from a traditional bank because my credit is relatively new (I'm a college student) and I don't know any hard money lenders that would lend only 10 or 15k. Also, I'd like to try subject-to but don't understand the technicalities of it, such as what happens if the bank calls the loan due?

What do you guys think of my plan? I just want to get some advice on something I could be doing better.