Houston texas LU article on owning 22 properties at $12k down payment for one

[Kelechi Okoronkwo]

this is the link to the artlice

http://www.lifestylesunlimited.com/how-22-rent-pro...

my question is 

With $12,000 down payment. say you need $2000 for upgrades to increase home value nd for miscellaneous fees, you are left with $10,000. For a 20% down payment you are looking at purchasing a house for $50,000. can you find a single family home for $70,000 in my situation in Houston Tx in a good neighborhood This is assuming you have captured 20k as the article describes?
secondly, I have done the calculation, with a 5% interest rate for a 30 year loan and 3% property tax including 1k a year insurance and an HOA of $30 a month your monthly mortgage payment including tax, insurance and HOA is $453 a month.Iin your article, you mention $100 maintenance and vacancy reserve so that is a total of $553 in order to be cash flow positive of $420 you will want to charge $973 for rent.

So my question is can you charge $973 a month for rent for a single family home worth $70,000 in Houston??

[Eric Tait]

David has it correct, we use hard money loans to accomplish this. 

Let's take a home that is worth 100K. 

We would ideally like to get it under contract for around 65K. 

A hard money lender will lend us up to 75K to purchase and rehab the property. 

If you can rehab the property for 8 K you are all in at 73K, if you are using fannie mae financing you can get a refinance for 80% LTV on the property.

So after your rehab and refi you are all in for 80K and this would be a deal where you had no money out of pocket to purchase the home.  (assuming closing costs ran around 8K).

If your rehab costs more than 8K, then whatever additional money it costs over 8K is what you would have put in the project. 

This was easier to do 2-3 years ago, but you can still find properties to do this with for less than 20K out of pocket. 

As for homes at 70K renting for 1K a month, yes, that happens all the time in Houston. If you look on MLS for 3/2/2's that are at least 1200 sq. ft for rent, you are going to find very few below 1K in rent.