Making our first purchase
My husband and are making a bid on our first property. The house will have a market value round $75,000 after improvements. Purchase price is going to be $30,000 and the property needs around $10,000 in improvements. My question is should we buy with cash or just put 20% down and take out a loan.
Adam, This is our first investment so most of our cash will be tight up for a couple of months. I plan on renting out this home and taking out a mortgage on the property after rehad to get our cash and profit out and move onto the next propery.
Originally posted by @Denise Duffy:
My husband and are making a bid on our first property. The house will have a market value round $75,000 after improvements. Purchase price is going to be $30,000 and the property needs around $10,000 in improvements. My question is should we buy with cash or just put 20% down and take out a loan.
Hey Denise, congrats on making a move on your 1st property. If I was in your shoes and your ARV is conservative I would make a cash offer.
1. You will have a very quick closing. And potentially be more competitive depending on the sellers motivation. Could you even offer a lower amount?
2. If this will strap you for cash consider getting a partner in the deal. This could reduce the stress of putting it all on your shoulders.
3. While your doing the rehab you could start applying for loans to do a cash out refi. Which would be a good idea to start calling your local banks and get a feel for what they would be looking for.
If you have done the analysis don't get paralysis :-). Hope it turns out well. Keep us posted on what you decide and how it turns out!