Cash out equity now or later?

2 Replies

I am currently about to buy my first two properties but have a question. The properties are being sold to me for a combine $92000 but the appraisal cane back at $150000. The bank has suggested I borrow the full 80% of the $150,000. This causes my note to increase a few hundred dollars a month but will not have to put money down for closing and instead leave with cash in hand. If that is the best route to take, do I turn around and buy a third property with the extra cash? Any help or suggestions is very appreciated. Thanks
@Jordan Ardoin Interesting situation and I look forward to the other comments! Jordan, did you only have to put a down payment based on $92k? I have to assume that there might be some work that needs to be done unless the seller really is that desperate to dump the properties at such a discount. Is it a situation where that extra cash in hand might be viewed as a rehab loan? Are the units rentable and/or already rented? In your opinion, if you do what’s necessary to have great rentable units how much cash is left over in hand? I’m just guessing that if you’re in a $90k price range or less then you should absolutely go for a 3rd property, just get the other 2 rented and get yourself comfortable but sounds to me like a marvelous opportunity to rapidly scale your investments!!! Assuming cash flow on the two and possibly a 3rd property you could rapidly be on your way to a 4th property in short order! Can you tell us more about these properties and how you made a deal and closed? Good Luck!

The properties were actually flipped by the seller so i am buying the houses move in ready and have renters lined up. Both houses have all new floors and walls. Renting in my area is high right now but the buying market is down.