Posted by Ronald * Starr(in No CA) on July 15, 2003 at 14:34:46:
Andy M--------------
Nice to meet you.
Unless you buy a very expensive property with a huge loan on it, it is unlikely that you will tie up all of your “borrowing power.” If you are buying for long term rental holding, my advice is to buy in as low-cost of a neighborhood as you can stomach. The ratio of rent to property value is better the lower the market value of the property, in general.
If you buy and rehab, you are probably going to want to use a line of credit rather than a standard long-term loan. You might have that secured against your house. Again, you probably will not tie up all your borrowing power. You can still probably go out and get a standard mortgage secured by a property that you are buying for long-term holding. Especially if you follow my advice and go for low-priced houses.
Anyway, when you start out, resist the temptation to be doing several different deals at the same time. Especially if you do a rehab job. Let one project absorb you entirely. Only when you are virtually finished with it start looking for something else. You have a lot to learn and trying to take on too much too soon is one of the major errors of beginning investors. I discuss this in my post for beginners, found by putting “beginners success” into the search function a the top of this main board of this CREONLINE.COM website.
Good InvestingRon Starr