Which is a better use of $15,000?

[Jessica G.]

I am so new at this. Please tell me, If you have $15,000 to invest...

Is it better to buy (with cash) a Section 8 1-bedroom condo that will cashflow at least $350 per month (after all expenses, including HOA)?

Or to put 20 percent down on a $75,000 house (let's assume minimal rehab, possibly also Section 8) that will cashflow about $100 per month, but the renters are paying down the mortgage for you?

[Jeff Kehl]

Hi Jessica,

I would agree with those urging you to stay away from the condo. I hate HOA fees because you have very little control of what will happen to them in the future. Also inexpensive 1 brs are like asking for a lot of tenant headaches.

One of the beautiful things about REI for newer investors is being able to get a 30 year fixed rate loan and let your tenant slowly pay it off for you.

One suggestion on looking for a house to buy. Atlanta is a lot like Dallas just a bit behind. The days of good deals on buy and hold houses in good areas here are gone.

But in my town which is about an hour from Atlanta the market has heated up but there are still quite a few good deals around. Follow the major commuting highways out of Dallas 1-1.5 hours and find a small town.

Look for towns with regional universities/colleges, hospitals, expanding manufacturing.

I see some turn-key operators here in Atlanta following that strategy.