How would you use $50k?

[Rob Kulp]

Hi everyone,

If you had $50k in cash to use to buy rental properties, how would you use it?  The area I'll be investing in has homes that can be bought for $25k on up.  Would you choose to buy one or two houses outright have no mortgage, or use that $50k to buy 4 or 5 houses with mortgages.

I know I'm not giving a ton a details, and I'm not adding in closing costs and commissions and all that... I just would like to hear some different opinions in general.  I'd love to hear any of your own real life examples of what you've done in similar situations.

And yes, I'm asking this because I have a friend that actually has $50k and wants to eventually get into rentals but is scared to take the first step and very unsure of how to go about it.  I'm just trying to help gather advice for him.   And no, I am not the friend.

Thanks!

[Tim Lindstrom]

Find a house that you can buy (and rehab), for 50K or less, that will have and ARV of 75K or more.

Do a cash out refi to get all your money (or more) back out. Even at 5% interest, your PITI should be below $400. If it rents for $800, your tenants pay the mortgage, and you get some cash flow. Plus you get to use that money to purchase another house.