am I crazy/stupid or smart?
I work in the inner-city. I've spent the past 15 years of my life there. I'm comfortable with the people and with the neighborhood. My first property I purchased for 17,000 and was rented a month later for $750. Taxes are 650 a year I'm only responsible for the water bill and my insurance is around 50 bucks a month. The property was never vacant and the only repairs I had to do was replace the kitchen faucet and sheet rock.
My second property I purchased was a foreclosure and the bank was asking 15,000. I Offered the bank 6000 and they accepted. My contractor estimates I will need about 3 to 5000 in total repairs to get the place rentable. A conservative estimate will have me all in at around 11,000 and the place will rent for 650. Taxes are 500 insurance will be around 50 and the water bill is going to be my responsibility but extremely inexpensive because it's only a two bedroom 890 ft.² row home. I used to super check for my credit card to acquire the house with 0% interest for 12 months. Even if my repair cost hit the $7000 mark I'm still all in for 13k and I should cash flow 450-500 month.
There is another property that I have the option to purchase. A gentleman bought the place but ran out of finances and he's willing to take 15k for the property but there still at least 10,000 worth of repairs needed. Even a 25k for the place will rent for 750 a month. I might use another super check to acquire this property and finance the repairs at my own schedule when my personal budget will allow.
Assuming there is no mortgage for people's investments at what point would you be turned off from a project that cash flows at 4 to 500 per month? I guess I mean what is the most amount of money you would come out of your pocket either to cash flow 4-500 month? Should I try to purchase this third rental? Would you use a credit card at 0% for a year just to take advantage of the promo rate and use the rental income to pay the bill? I will greatly go into my savings and probably only have a cushion of about eight months living expenses but I should be able to increase my household income in the long run. I guess I need validation for my approach to buy and holds. I would like to get it at some 15 properties cash flowing 500 per month. I own two properties free and clear I'm only 35 but the third one is right under my belt.