I have been here a little over six months or so. My wife was all for REI. So we jumped in. On the 17th of September after going through a roller coaster ride with the bank who owned the house, we FINALLY closed the deal! Total cash invested is somewhere around $52k. The property is in Central NJ. Great safe area, flood zone. We are starting the rehab soon. The house is in great shape so $12k rehab budget should do it. Believe it or not we closed this deal with power of attorney, since we are in Europe. I was actually enjoying a beer while the deal was closing. Greatest feeling in the world! All thanks to BP! :)
As you can imagine we are both hooked. We need ideas though. The property was bought with cash. After rehab it should be worth at a MINIMUM $140k. This truly was a steal and we did our homework on it. As soon as we are done rehabbing we want to jump into another deal. So what are our options? What would you all recommend? We plan to keep this house as a rental. The goal is to create passive income, and before you say it- I know, REI is not as passive as the infomercials make it seem :)
Congratulations on pulling the trigger. I hope it's a bullseye. Keep us posted, with before and after photos.
Congratulations @Jake Recz ! I believe you can put a mortgage on the property to pull your cash out. You then repeat the process. I have read about this method but I haven't been able to make it work.
Sounds like you did well with the purchase, how did you find the property?
If cash flow is what you guys are looking for, you'll want to talk to your lender about putting a Fannie Mae or Freddie Mac mortgage on it at a 30 yr amortization and get your money back (assuming you need it). That'll most likely be your lowest interest rate option, too.
As far as your options, I would recommend trying to replicate what you just did/are doing. If that is a winning strategy for you, stick to it. It will probably be slow going at first, as it is for most of us, but the more deals you do, the more efficient you become, which will increase your rate of acquisition.
@Kenneth B. I was just reading about that. Seems like it could be a great strategy if I could make the numbers work. If I could get $100k out of it that would enable me to buy at least two properties out of state and keep moving forward. NJ is too expensive for the long run. I found this property on the MLS. The bank was trying really hard to get rid of it. The house is in a flood zone and since the town got hit really hard during Irene, a lot of people were staying away from that area. I took that as an opportunity. Back in 2008 the houses there were going for $250k+.
@Scott England Thank you for the advice. If I could get a 30 year mortgage on this house and get my money out I'd be in great shape. I'm already keeping an eye out for my second investment. If I could repeat exactly what I just did it would be great. Unfortunately the NJ market is too expensive. Cashing out on this deal would give me a nice chunk of money to invest out of state.
@Jake Recz Congratulations on your success! i cant wait until I'm able to do my first fix n' flip Since you might be looking for a potential flip reach out to me if interested I just put a property under contract last week in Elizabeth, since I'm new i actually wrote a post about it with the property details.
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