I found a property I am interested in purchasing. I would rather not pay cash. Can I get a mortgage for less than 25K, or does it have to be a minimum amount to be worth a lender's time and money?
@William A. Usually has to be above 25k. The closing costs are too high compared to the 25k loan principle.
@Jack B That is what I was thinking. I wonder if I paid cash, and then bought another 25k property would I be able to get a 50K loan?
@William A. If you completely owned the first property I would just take out a line of credit on it to buy the 2nd one. You'd only have to pay $5-$10k more in cash and that can be put on a no interest credit card.
I would use cash on the first one, fix and flip. Use the money from the first one to buy the second. If you don't have the cash, just get a personal loan to buy it and repay the loan when it sells. If you don't have the cash or the credit for a loan, you probably should stick to wholesaling until you build up some cash.
@William A. this is the kind of market I buy and sell in a lot ... don't be afraid of finding a loan if that works best for your structure. I have a private money guy who doesn't care if it is 10k or 100k ... you pay a little higher interest rate but WHO CARES! If the deal works, the deal works.
Second, its awesome to approach the bank in a year or two with an asset you own, owe 10k -20k on it, and its worth $50k and cash flowing. You can pull the 10-20k out of it and go buy your next property.
Thanks everyone. I am filling better about using cash.
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