Newbie: Buying a property for the equity

Hi Guys,

I am very interested to start investing in real estate. After trying to get my education first by reading Real Estate articles, hearing a lot of Bigger Pockets’ podcasts, blogs and a couple of Rich Dad’s audiobooks, I am very excited to start. My only problem is that I don’t have enough cash to put for the down payment on a property. Due to this situation, I am currently searching for REOs or foreclosure properties with minimal damage to invest.

Surprisingly, I found one property in a good neighborhood but not in a good location. This property is a penthouse on an apartment complex. The original price was around $270,000 a few years ago, current comps are about $170k ish and I found it for $60K. The unit is in good condition and only need minimal fixes. I think that with less than 5k I can get the unit in good condition. The only few things that it requires to do is clean, paint and to fix a couple of cabinets of the kitchen. I have the down payment and I am planning to make an offer of 50k because is being on the market for a while. For the rehab money, I am planning to get it from my net income and fix it within the next 3 months. I will love to flip it. But before I do that (and the market in my area is not that good), I will like to refinance, take the equity out and using it to buy other properties.

I did the numbers and if I rent this property, I can get around $50 monthly cash flow or get even. But the deal is that I will like to use around 75k (hopefully more) of the refinance equity cash out to use it as down payments to other properties that can get a better cash flow, offset the cash flow of this property and start building my portfolio.

What you think of my strategy? Please advise. I will like to start and not get stuck in analysis paralysis.

Thanks…

Island Newbie