All Cash Purchase Opportunity

[Kimberly Wood]

Hello! Inaugural post of a time lurker and podcast fan. I’m living in the DC area and looking at the possibility of investing in either Jacksonville, FL or Tampa, FL since I’m in the military and there is a good chance I might be headed there next. When I originally joined the site my focus was on financed buy & hold deals; however, the below opportunity recently presented itself and now I’m starting to change gears. Interested to know if I’m missing anything; right now it sounds like a great opportunity to get my feet wet as an investor.

The plan:

-2-3 partners purchase relatively new single family or townhome (no rehab required) for ~$250k

-Some of our potential properties are located in gated neighborhoods/communities, so I acknowledge that they’ll likely not increase in value too much

-Pay full cost with cash payment

-Rent property for cash flow

-One partner located in local area and agreed to manage the property

-One of the partners is set on paying all cash so financing isn’t really an option

My background/thoughts:

-Have cash to spare

-Rental income would provide great return on investment

-Not looking for another deal for another 2-3 years, so immediate return is not a priority

-Purchasing a new-ish property will minimize risk of running into major repairs & would allow time to build up a maintenance fund (we can cover these costs now...but would likely use rental income to build a separate/shred pot of cash for this purpose)

Looking forward to hearing from you all!

Kim

[Linda Wright]

@Kimberly Wood

I agree with Jonathan, I think it would be better to keep yourselves liquid in case you find another really great deal and could double your equity for the same cash output, but that really wasn't your question, I don't think. If the 50-80K you put up still leave you other money to do other deals then maybe the deal is ok, but if it is all you have and you want to invest in other deals, possibly not. I think it depends on your goals.