Posted by Mark W-MD on July 06, 2002 at 10:04:35:
Hi James:
One thing you need to consider is that most lenders will only let you borrow to invest in 4 maybe 5 properties at once. Their logic is that what if your property (or properties) goes vacant. How will you cover all of your mortage payments?
One other suggestion is to not fixate on asking price of properties, you need to know FMV or appraised value of properties. Many times asking price has no correlation to FMV or appraised value. Once you know true value then you discount off from there.
One last suggestion is you need to get to know rental rates in the communities you are targeting. You obviously can’t charge $1,200 per month when other comp properties are only drawing $750 per month.
Good Luck & Success, Mark Williams