Buy and hold strategy question

[Jim Zatko]

I have 75K to spend. Lets say I buy in all cash a house at 50K at auction. I put 10K into it so I have 60K invested, so it's now worth 80K. Would the best thing to do is to is to cash out refinance for a 15 yr mortgage and get my 60K back out, and try to do it all over again? And basically keep doing this until I can no longer cash out? Is the minimum cash flow for rentals still $100? Just thinking through some things.

[Joe Villeneuve]

@Jim Zatko The answer is an emphatic "yes".  Based on what you just described I will ask you a few questions:

1 - How long will it take between houses...meaning how long between the time you buy the first house and buy the 2nd house with the refi cash from the first house?

2 - How many houses does your strategy (goals) require you to hold.

3 - Here's the big one.  Doing it this way, when you are done, how much did all those houses cost you?

First, if all you're getting is $100/month in Michigan, you're buying the wrong houses.  You should be getting no less than $300/month...w/ a property manager.

Second, you want the longest mortgage you can get...not the shortest.

Joe Villeneuve
REcapSystem
A2REIC