Experienced Investors Please..

[Greg P.]

Hello, this is a strategy I was thinking about and I would like to hear opinions and/or advice from the experienced members here. This would be all cash strategy though I would consider refinancing.

Here's the breakdown:

Buy 2 houses to rehab a month
Buy 2 houses for rental a month

The 2 houses for rehab would cost approx on average $250k for both houses and this includes rehab costs.

The 2 houses for rental would cost around $140k for both houses rehabbed.

So I figure that for the 2 houses that I would rehab would net $70k for the month.

And, for the rentals using the 50% rule should cash flow for 2 houses I would net approx $1200 per month

Now, for the year, it would be 24 houses rehabbed and sold and would net $840k

And for rentals by the end of year 1 there would be $14,400 (50% rule) cash flow coming per month which would equal to approx $172k year 1.

After 3 years, the cashflow would be tremendous and would have enough cash from the rehabbed houses to buy these rentals.

2 houses per month to rehab and 2 houses per month for rental it doesn't seem too much does it?

[Phillip Dwyer]

Check your math. It looks like you may be giving a full year worth of rent collection to properties you added to the portfolio after month 1.