Looks great but is it?

[Gustavo Figueiredo]

Hi everyone! I am a new investor and I am in a situation that I don't know what to do. I found an apartment 2/2 900+ sf for 35k. Its in S Florida. It rents for $1000-$1150 and the HOA is 330. Tax is just $800. The catch is that the community has code violations. This propriety is on the market for a long time and seems like no one touches it. I know that it would have no liquidity and would not appreciate much but as a rental it looks superb. What to do???? Thanks in advance

[Art G.]

My pleasure :) Also, try shopping around for what kind of loan you can get on it. Even a 50% LTV would greatly drop your risk and free up cash to buy a second unit.

Look at the math like this: 

Cash for a 100k home that makes 1k per month. you make 12k a year.

Use that same 100k cash to put 20k down on 5 homes with five 80k loans. Mortgage is $500/mo or 6k per year, times 5 = 30k annual mortgage but you are also profiting 30k per year from the remaining 500 off each  units monthly rent ($500x12mo.x5units=30k).  Obviously there are other expenses and issues to factor, but this was just a quick way to show you that leveraging your cash with loans is the way to acquire more units and thus more profits.