Deal analysis - Figuring out the first investment

2 Replies

Hey BP, so I'm fairly new to the real estate game but I am extremely eager to learn any and all information possible. I am having trouble seeing the big picture when it comes to deal analysis so any help would be much appreciated. I am currently in a situation where one of the markets/areas I am looking in, I have enough cash (private lending/line of credit) to purchase properties with all cash offers. This area is not necessarily the nicest area but it does have success as rental property. Another area I am interested in, a little bit more up scale, has great sfr and multi-family duplexs, however, these deals are looking like they would be more of the conventional 20% down situation due to the higher priced market. My goal right now is to generate a long term portfolio of Rental properties so I am trying to decide if it's better to do an all cash purchase, which could lead to potential BRRRR style growth, verses going the traditional route with the possibility of house hacking as an option with the duplexes. Any advise is welcomed and if more details are needed I can provide those, thanks!

@Cameron Chapin House hacking is a great place to start.  It can be a great initial investment that can have your tenants paying off your mortgage.  

Whether to buy a house in cash or get a 20% down loan is a matter of investment strategy.  If you want to build quicker then you may use debt, if you want to have paid off houses then you may decide to use all cash.  With the interest rates as low as they are right now, I would encourage using debt to leverage and acquiring a few rather than just getting one paid off.  Also, I would encourage you to meet with a mentor in your area to help you analyze the deal first.  Many people make mistakes on their first property (or first few properties) because of lack of experience.  Getting help with analyzing deals at the beginning may save you lots of money in the long run.

Hello guys I'm new as well and I've been asking myself a similar question should I pay cash or use conventional financing; cash is a quicker process overall you buy add value then refi; you hold all the equity. Conventional you have to wait to build/gains equity you refi on what you may have gained; however your getting recieveing rental income. Yet this true for both. What I'm asking is which way can scale more deliberate and still not sacrifice net worth..??

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