$10k Cash


Hi Guys. About 15 years ago, I spent half of my life on these forums and learned SO much! Life happened, and here I am back again. I’ve had rental homes in the interim, and was successful with them (yay me!)

NOW I have an opportunity to put my love of creative real estate investing to work.

~I have a debt of $30k (a loan in my mom’s name) that requires $1k/month payment.

~I have $10k - $13k in cash. This is about a year’s worth of payments, and is my security ‘blanket’.

~~~How is the best way to leverage my cash to pay this debt off?! ~~~
The ideas I’ve had are:
Buy a property from a desperate seller (how do I find one quickly?) with $30k automatic equity
Buy a property with little to no fix up required, owner financing with my $10k down payment, that nets me $1000 per month to make payment.

Thanks y’all. I know y’all will have a great idea! And much faster than I would!



Investing $10K cash in a rental

If your’re paying $12k/year on a 30k loan, that a very high interest rate, unless you’re also paying off principal. Then if you’re dropping everything you’ve got into a rental, no reserves, you’re only asking for trouble, big trouble, if the tenant doesn’t pay the rent.

I own rentals for over 30 years, and you can probably pick up a property somewhere for 100K, with 10K down, $1,500/month rent, if you can get a 90K mortgage at the best rates, around 4%, you’ll net close t $1,000 give or take. Keep in mind you’ll have taxes, repairs, vacancies and so on that can get you into trouble.

I don’t know how good your credit is, where you are located, so what I’m saying is that it’s borderline even under the best circumstances.


Thank you Frank. The interest rate is actually in the 5 range, and minimum payments are around $850, but I always pay an even $1000. So yes, principal is being depleted.

I see your point about the slim margins. I appreciate your spelling it out. I will look, though, for a foreclosure or something with lots of equity. Might be hard to do… our market here in the SE is fairly strong right now.

I appreciate your time.


Investing in Foreclosures

I dabbled around with foreclosures, but I will only do it at the bottom of the real estate cycles. Currently, as you pointed out, it is not.

The home I live in was a bank foreclosure, which I picked up at auction, at the bottom of the last cycle here in 1993 for 210K. FMV back then was 310K. Market peaked here in 2007 and FMV rose to 850K. Someone bought a house 2 doors down from me in 1994 for 310K, after 2 flippers made good money on it between 1993 and 1994, going from $150K to 310K in a period of 10 months. He sold it for 850K in 2007.

In 2008, the market crashed here and FMV for my home went down to 630K, then recovered last several years. It currently stands at a bit over $1MM.

Bought 2 more condos out of state foreclosures in 1992 in MA. In 1992-1993, the real estate section in the NY Times has 2 pages each week full of foreclosures. I went to foreclosure auctions weekly, sometimes several a day. Sometimes you luck out where you’re the only bidder showing up. I was at several.

The best story I heard was at the MA condo I owned. One unit was sold at a bank foreclosure auction, held on site, and the owner’s brother was the only one showing up out of curiosity. These condos originally sold for 110K new. For this auction, highest bidder wins, seller cannot back out, and his bid was only 8K. So this guy bid for the fun of it, was shocked his bid was accepted because he was the only one there, and he paid the 8K via his credit card.

So yes, foreclosures can be profitable if timed right.


Spend it on marketing

Spending your last 10k on a down payment is a terrible idea.

Spend half of it on marketing. Postcards, letters, etc. That would undoubtedly find you 1/2 dozen good deals that don’t require much money down (or maybe the 5k you have left, for quick paint and carpet, which you’ll recoup on resale). Wholesale the properties you get from this first mailing, and you’ll easily have 50k before you know it.