Re: Input on Plan of Action - Posted by LeonNC
Posted by LeonNC on March 14, 2001 at 21:13:56:
It sounds pretty good to me. That’s pretty much the way I will buy a house if the deal is good enough. I’d prefer to get the seller to hold the financing or buy it subject to the existing mortgage if possible. That way I only have to pay for the repairs before I get it refinanced.
I guess you can get the cash back for anything under the 80%LTV?
Here’s something I’ve been thinking about. I’m not sure which strategy would be better. Buying the lower end properties fixing them up or just working in the pretty houses. You are going to have holding costs and money going out. Repairs and holding costs with the fixers and mainly holding costs with the pretty houses. The fixers have got to be more work and management intensive than the pretty houses. But, there’s probably more risk in holding pretty houses. Meaning the amount of mortgage payments owes every month.
For me to be able to buy houses and do repairs I pretty much have to get a bank loan on the house after repairs. Regardless of how I buy it. I need the money back. With the pretty houses there’s not much time involved with repairs. Therefore a bank loan may not be required to hold the property. This is something I’ve been thinking about. I like the idea of controling property without ownership. That being said I’m still working in the lower end. I’m not sure rents will produce a positive cash flow in the pretty houses. Just bought my fifth house and it’s FMV is the highest so far…high 60’s.
It sounded like you were thinking along the same lines as I am so I thought I’d babble a little to tell you what I’ve been thinking.
In the Zone