Buy It Fix It Keep It - Posted by ken in sc
Posted by ken in sc on October 04, 2004 at 07:13:20:
That’s how I did it. I used a commercial lender instead of hard money, but then refinanced like your plan. Call some small local banks and ask about this type of borrowing. You might be surprised.
Also, learn 1031 exchanging. It can help in accelerating your growth. For example, my first buy was a triplex for 68K, I spent 12K fixing it, got an appraisal for 100K, the refinanced all my money back out. Three year later, I sold for 135K. I then had roughly 60K and exchanged it into 2 houses, 30K down each, paying no taxes. Each of the 2 new houses I bought for about 20K below market. So, I wound up with 2 houses with 50K equity each, with no money invested. Then, 2 years later I did the same thing and wound up with 4 houses with 60K equity each.
One good initial buy, some exchanging, and in 5 years I had close to 250K equity and 4 nice rentals - just from the one. I did this with other properties as well, and achieved my goal of number of rentals faster than just buying and rehabbing.