Buy with cash. Mortgage Later?

[Christopher Nelson]

Hello everyone!

I know this questions may have been asked and I have looked on the forum, but some of the information I am gathering is well over 2 years old. I just want to make sure it is correct. 

I am starting to get into investing and I have a few backers to get the ball rolling. 

I want to do fix and flips as well as buy and holds. (I want to get it to where I can wing myself off of using their money)

A strategy I want to implement is to buy a cheap property, put in some sweat equity and get a mortgage on it down the road to essentially get all of my funds back out of the deal and then some  to fund my next deal. 

Is there a holding period before I can get a mortgage based on the new appraisal price from a cash sale? I seen it was 6 mos minimum, but I want to be sure.

Any other creative financing techniques are welcomed!

[Matt K.]

Usually it'll take 6-12 mo to be able to do a cash out at the ARV and you'll be limited to 70-80% of that value. If you don't go that route I believe you can get purchase price + repairs sooner than the 6-12 months, again limited to 70-80%.

Be forewarned that it takes money to make money and these cheap property might not be worth it. You might be taking on a ton of risk for very little reward. This could be because no one really wants to buy a cheap property (location likely biggest set back), rent will likely be difficult (if in bad area), or competition will drive prices down and make it hard for you to make any kind of profit. The team that  does this day in day out is likely more efficient then a new comber and could do these at a lower cost and still turn a profit vs someone just starting out.

What's your background in this flips always seem to be glamours because of all the exposure but if you don't have background in construction or managing contracts cost overruns can be the death of you.