All Forum Posts by: Derrick E.

Correct. 

I agree with this method if the original poster was planning to put down $30,000 on a $100,000 home. 

It's hard to find financing for under $30,000, not impossible but a headache. 

Also, if someone doesn't pay rent, you now have to pay the mortgage yourself.

I prefer to remove a lot of that headache and pay cash for everything, but all I purchase are homes under $30,000. 

 He means putting down the minimum 20% and take out as many loans/or as much money as the bank will allow you to take out.

@Lucas Cole I respectfully disagree with Ethan. In some markets it makes sense to spread yourself thin in buy and hold.

In the low income houses, which is what I do, I think you are better going all cash, which is once again what I do.

I am about 2 hrs east of you. We have so many cheap houses and deals here that it only makes sense to pay cash. Plus the homes we are buying for $30,000 or less are not going to appreciate much if at all over the next 10 years. 

I'd go solo and just pay someone to do the repairs. Once again, this is how I do it. In our area you can find cheap work from posting an ad on Craigslist. Be picky about the tenants, save the rent money and look for the next deal.

It's also hard to find a bank who will finance something under 40k, so sellers are limited to all cash buyers and really opens up some deals.

My last house I just renovated I have a total of $18,000 in it and rent it out for $600/month. I did a lot of the work myself and contracted it out one job at a time with my handyman. 

I just bought another house yesterday for $7,000. I will put less than 3,000 in it and will rent it for $700-$750/month. 

With these types of deals why do you need to share your money with someone else? Why take on the stress of leveraging yourself? I don't have to rent to the worst ppl because it doesn't matter if it sits empty an extra month, returns are so good and I don't be have a mortgage payment. To me, going alll cash removes a ton of stress.

Once again, I am only speaking in terms of homes under $30,000 and low income buy and hold.

@Lauryn Meadows I am from the same area. I know the houses you are talking about and I think you can find much better deals in our market. I sent you a connection request. 

 I rent washer and dryers as well, but not like this. I just ask them if they have a washer and dryer. Most say no. I then offer to rent both to them for $25/month. 

Check CL and other places, you can find washers and dryers for around $100 and sometimes for free. 

They spend close to $25/month at the laundromat as well as having to drive there to do it. They can spend the same amount of money at the house whenever they feel like it, only catch is that they have to give that same $25 to me instead of the laundromat. 

That's what I am hoping for. Decent street but within walking distance of the elementary school. I'm going to try for $650 at first, but I've been running numbers for $600 just in case. $650 would be great. 

It was a For Sale By Owner situation and the guy didn't even list pictures of the place. He was asking $20,000, and the property had been listed for well over a month. 

I went and looked at the place. It's actually a pretty nice but small 2 BR house. After the repairs/upgrades I should be able to rent for a minimum of $600/month. Rentometer has 2 BRs in the immediate are going for an average of $628/month. He has been renting the place for $500/month.

After looking the place over and knowing he most likely didn't have a lot of serious interest and limited to all cash buyers, I made an offer of $12,000. After negotiating we settled on $14,000 all cash. I'm giving my self an all in budget of $20,000 ($6,000 for repairs and closing costs.)

Repairs/Upgrades

Replace a small section of sub floor in the bathroom

Put new laminate flooring throughout the 800 square foot house

Install heat pump unit

@Ron Rohrssen- People still use waterbeds in your area? If so, thats awesome. I'm getting all nostalgic after reading your rules on waterbeds.

If they are good tenants then work with them and raise the rents gradually. Would it be worth it to lose them, have to deal with the turnover, and then get stuck with a bad tenant?

I decided to look in my wife's home city area. There are 1200-1300 houses listed on Realtor.com, but not a single house was pending. Is this just something to do with the local RE people choosing not to list things as pending? Or does this mean no one is buying in the area? What does it mean if no one is buying?