Posted by BillW on December 30, 2000 at 19:26:13:
What you’ve left out here is what sort of knowledge you have regarding doing rehabs.
Are you a contractor? Do you know contractors who will give you good deals? Have you done many rehabs?
Also, what type of work do you currently do and how much free time do you have?
Once you know what the answers to these questions are, along with what you feel comfortable doing, you’ll be closer to your answer. Also, you don’t mention what price range property you are comfortable dealing in at this time. Also, although you have some cash, you don’t mention cash flow.
If you’ve got plenty of cash flow, and you’re comfortable with your rentals, do another one. Use as little of your own cash as possible. Save your current cash for the unknown, which ALWAYS occurrs. If you have experience and ability rehabbing, why not try some. If little experience or spare time, you’re probably better off looking for better shape property that has owner problems rather than property needing rehab. Rehab is like fixing classic cars- best if done by someone in the business (with some exceptions of course). If you have low priced workers, if you can get materials at wholesale, if you know the subcontractors and so on, you can make profits in rehab. If not, can the budget on the project handle contractors charging at $50 to $75 per hour plus materials at retail?
Just my feelings on the subject.