Great discussion here! I have analyzed some properties in Southern Oregon that I can buy (with private money or Hard money) for $65,000, invest another $20,000 (out of my pocket or CC debt) into rehab, Rent them out for $1,000 month (1% rule = 1% of the value - right?), Refinance the property with an appraised value of $100,000, pull out $25,000 as a rental loan will allow up to 75% LTV, and cash flow after all expenses including prop mgmt. of $250/mo. Who's with me?
Besides finishing up a couple land developments, I have nothing holding me back from doing this. Even my wife is mostly 'on board'. I'd like to see the community in a better light, as there are some terrible properties with major drug and alcohol problems next door and surrounding these properties; not even sure I can see a 3% appreciation. Even so... in 3-5 years I should have enough equity, especially if I do 2-3 of these a year, I may have real equity to get going in commercial or multi-family and realize some serious cash flow.
