Just backed out of a good deal!
My first and only rental consists of a property in a great area that didn't take hardly any work to get rented. It gives a decent return of 10% cash on cash. I am currently looking at another similar deal but I just backed out of it even though it met my previous "standards" and I got approved for the loan. I'm sure my realtor isn't thrilled.
The reason I backed out is that it leaves me low on cash. 35k would be the down-payment, closing costs, and minor repairs. At a 10% cash on cash return it would take me 10 years to get that money back, which I'm sure is obvious to most. I can't see my next step because all my money will be tied up in equity and that is not a good thing.
I have been reading a lot about BRRRR and being able to "recycle cash" and force appreciation. Even though my instincts want to buy I think it may be detrimental to my growth compared to learning to fix up a property to rent.
I feel as though it takes more skill to fix up a property to rent but is worth it in the long hall. It also allows for quicker growth. What are your thoughts on taking this approach?