Is this smart?

[Maher Bateh]

I do not like to borrow money.Is that so wrong. I feel comfortable paying cash for my properties and then hope to sell for a 15/25% margin within 4 months. Spending about 50-80k per house including rehab. Many people tell me that its not good use of my money. Thoughts are appreciated?

[Jay Nalker]

If you have the cash I think its a great idea. you can get a better deal if you can offer a quick closing with cash. your paying no interest if it take a little longer to rehab and sell.

[George P.]

cash is slightly more attractive to sellers. it's much more attractive when a property has no water heater, cabinets, toilets. cause noone can get a mortgage if those things are missing.

but i have a question.... how long does it take you to gather/save $80k? one year?

i can get 2-3 homes in that time with mortgages.

what happens if in 1 yr (time it takes you), the properties jump to 100k? you'd miss out on 2 additional homes.

i will hang up and listen now..

[J Scott]

Originally posted by Maher Bateh:
I do not like to borrow money.Is that so wrong. I feel comfortable paying cash for my properties and then hope to sell for a 15/25% margin within 4 months. Spending about 50-80k per house including rehab. Many people tell me that its not good use of my money. Thoughts are appreciated?

If you're getting 15-25% returns in 4 months and can turn that money over at least twice per year, that's a 30-50% return.

If someone is telling you that it's not good use of your money, then clearly they have a way to generate better returns than that. Have you asked them what THEIR strategy is for returning more than 30-50% annually?

They may mean that it's not a good use of your TIME, not money. But, that's another discussion, and it really depends on the time you're spending and the amount your earning.

[Bill Gulley]

If you are doing the work, you probably can't rehab 4 houses at the same time. If you can get'r done and sell in 120 days, three deals a year, you're fine IMO. You get better deals, probably with cash offers as J. points out. Use of funds should be scaled to the size and scope of the business, you're doing just fine! :)

[Hunter Kenihan]

Originally posted by Bill Gulley:
If you are doing the work, you probably can't rehab 4 houses at the same time. If you can get'r done and sell in 120 days, three deals a year, you're fine IMO. You get better deals, probably with cash offers as J. points out. Use of funds should be scaled to the size and scope of the business, you're doing just fine! :)

Exactly what I was going to say.