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Newbie Investor needs advice on "making this work"

I am going to purchase an investment property with cash and don't have enough to fix it up so that I can rent it out. I will get a part time job to fund the fixes if I have to, does anyone have a better idea?
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May 22 2009 - Aberdeen
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Answers (9)

Best Answer
My advice.  Don't put all your eggs in one basket.
Use the leverage of your cash to purchase the property with a Mortgage.  

Then take a portion of the cash to make neccessary repairs and set aside a reserve fund for vacancies and future repairs(they both will come).

That's my two cents......  ;)

Bob
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May 22 2009
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Tubal Waite, this poster is in South Dakota and that is pretty far from Georgia last time I checked. Self promotion is not generally allowed on the board you might take a look at the policy here. and this thread here has good information on marketing yourself and your business on Zillow. You can always answer the posters question and then can direct people to your profile for more info. I always look at profile pages. Hope the links are useful.
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July 15 2009
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July 15 2009
In a Market such as this - perhaps there are better properties out there that don't need as much "fix-up" - so you can cosmetically get it in good enough shape to rent out within a month or two of closing. Don't be sucked in to the "cheapest fixer"  - take your time and zero in on that better-shape property that you CAN afford to fix and rent- or you might be offering it back for foreclosure down the road. Think before you leap. Also remember - a renter looks after a rental property that is in good shape far better than one that is "crappy" to start with............well, in most cases, anyway! :)
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May 25 2009
This is a tough one. If the home is priced right, in a great area and you have done your homework on whether or not you'll have a positive cash flow, it might be a good idea to invest.

My grandfather during the great depression purchase buildings  one by one in Boston. He paid cash, because he didn't trust banks. Yes it's a different era now, but the family struggled and he made it work.

Not putting all your eggs in one basket is sound advice, because we really don't know where the economy is going.

Sunny's Idea about an FHA 201K rehab loan may be the answer, but I do believe it must be your primary residence. That loan was created to re-vitalize neighborhoods that were hit hardest by the foreclosure fiasco.

Mike is right too, Maybe getting a loan and having enough $ to do repairs may be the best way. tenants HAVE become more picky to the condition of the rentals out there because there are so many.

Bottom line is this, If I were 20 years younger I would do whatever I could to invest in income property.
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May 24 2009
Sure buy an investment property that can be rentable upon closing. Ask the sellers to make it useable at least. Now is your time you have plenty of properties to choose from. I have seen brand new homes go as rentals in this bad sellers market!
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May 23 2009
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I think this was it here. I don't know if it would fit your situation, but it might be worth a look.
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May 22 2009
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I think there may be an FHA rehab type loan to get extra money for repairs at close of escrow, but I am not sure if you would be able to use it for investment property. I just read something about it yesterday. If I can find the link again, I will post it here.
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May 22 2009
My guess is you don't have a lot of cash to make the deal. And homes that are inexpensive are also usually 'as is' with a lot of deferred maintenance issues. And if you have never owned rental property you will soon find that renters are some of the pickiest people on earth. They want it perfect and they don't want to pay for perfection.

Follow Bobs advice, get a mortgage and save some cash for repairs. And even then you have to count on the property being vacant at least 10-15 percent of the time, plus spending 15 percent of the income making future repairs.
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May 22 2009
 
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Newbie Investor needs advice on "making this work"
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July 15 2009 | 9 answers
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