I'm debating what to do after selling a rental house.

[Mark K.]

Ok, I'm going to use numbers that should be close.

Let's say I have $50K after selling a local rental house that I have. I have various options.

1) One lender says best bang for my buck is to buy a distressed house, say for $25K-$30K, hire contractor who does $15K of work, house appraises for $60K, I refinance with him immediately for 75% and get $45K back.

Then, I repeat. I can have a max of 10 mortgages/refinances. I currently have 4 mortgages, but when I sell my house, I'm then down to just 3 mortgages. In theory then, I could potentially find up to 7 houses, one at a time, that I would buy cheap and then rehab.

2) Another option is to find a bank that will let me buy 3-4 houses, with 20% down, and give me mortgages for each, either indivually or a portfolio mortgage if the same seller is selling them. That same lender talked like this would be harder for me to do with him.

3) Or, I could pay cash for a $50K house. If I do this, I make more positive cash flow due to no mortgage. I then try to buy a more or less $50K house and get a mortgage on it. Then, I use something like Fund and Grow to buy a 3rd house. With Fund and Grow, if I'm approved, I could get X dollars at 0% interest for 12-18 months. I'd have to play a flat fee of around $3450 to get this money.

I should be able to do a 1031 exchange for option 2 and 3 (cash house). I don't think I can for option 1.

What do you think you would do if this was you?