Investor delima - 3 options to invest $100k

[Fouad J.]

I've been thinking about this as I continue my journey in real-estate investing, and I welcome input from the seasoned investors on here.

Basically, say you have $100k in cash available to you for investment and you're looking to establish an ongoing monthly renting income. Do you:

a) Use the $100k to buy a rundown/foreclosed condo around $80k, then renovate for rental around $10~20k, to end up with about $400~$500 net in pocket monthly (after taxes, HOA...etc). A year later refinance to get your money out (assuming 15% profit from appreciation) and repeat the process to upgrade to bigger property/better rental income. Assume the rental income is enough to cover the refinanced

b) Use the $100k as down payment on a loan to buy 2~3 rundown/foreclosed condos for around $300k ($60k down) then renovate all for rental with the leftover $30~40k, assuming you end up with about $600~$700 net in pocket monthly. This time, wait till renters move out then sell each to get your money out and repeat the process.

c) Use the $100k as down payment on a loan to buy a larger house for around $350k ($70k) then renovate for rental using leftover $30k, assuming you end up with about $800~$1000 net in pocket monthly. Again, wait till renters move out then sell to get your money out (+$50k profit from appreciation) and repeat the process.

I know it's long and has a lot of numbers, but I'm looking for advise regarding the pros/cons of each. As for background, I'm in the Dallas-Fort Worth Metroplex and all 3 scenarios are a possibility.

[Laura Williams]

With all else being equal I would go for a house over condos. The fees and potential assessments could eat into your profits. Also these love to have "rules" which can be annoying. And if too many renters living there it could make it hard to get financing when you buy or sell. Just something to think about & ask around before you buy a condo.