Help newbie - take this deal or leave it?

[Katherine T.]

Hello BP members,

 I am a newbie and have found a potential property in Birmingham, AL.  This will be my first if I choose to proceed.   

As far as I can tell the numbers look right from my calucations. Asking price is 33 K. House is presently rented to a section 58 lady so there is a steady check and she faithfully pays the difference of $200. The rent is $700.00. My issue is that the seller (FSBO) wants to sell quick and changed his mind from financing to cash only offer. I do have the funds though this was not my original plan. Looking at other properties this appears to be a great deal. I also like the fact that there is a section 8 renter whom I have met, keeps property in good condition and has no plans of moving soon.

My question is am I putting too much down for a starter.   My thinking is I can utilize the cash out strategy down the road and move on to other properties without being tied down for using a big chunk of my capital.  Thoughts please? Are there factors I am not considering if I go all cash on this deal? 

[Ron J.]

Katherine Theuri I purchased my first property last year for 17k cash. Put 13k in rehab, signed a 2 year lease with a section 8 tenant for 930 a month and did a cash out refinance for 33k with my bank immediately. All they asked for was a copy of my rental agreement and proof of income. I just used that money to purchase my second property for 20k.