Transitioning from from rehabber to holder

[Tony Nguyen]

Hey guys,

I am at a fork in the road and am not sure which way to go. Let's assume I have 200k to rehab houses. I want to buy an apartment that will require 100k down and the rest financed. If I do that, 50% of my rehab money is gone because I am holding an apartment.

If I DON'T buy the apartment, yes, I'll still be able to rehab many houses w/ the 200k, but then I don't have a long term plan in place ie: the apartment.

I was curious to know how you guys draw the line in your play book in order to do both; rehab + buy to hold. Any advice would be appreciated thanks!

[J Scott]

Tony -

If you have $200K in cash right now, and you want $100K to buy an apartment, why not use the $200K to flip 3-5 properties over the next 6-12 months, which should generate the $100K you need to buy the apartment -- AND allow you to retain the $200K.

Certainly easier said than done if you're not experienced at rehab, but I don't think it's unreasonable to return 50% on $200K in a year by rehabbing in this market.

Just an idea to consider...