The house with squatters may need a whole lot of cash infusion.

The car expense ate up most of his cash flow.  

Around here, you'd probably usually cash flow better with a duplex-- but do the math for these particular deals and buy the property that will make you the most money.

A 24-month loan would be preferred so you can build up the last 12 months of cash flow for the property. 

After that, I do another cash-out refinance on the $120,000 property at 80% LTV to get $96,000 in cash.

It'll be tough to get into a pure investment in your area for 35k but here are a few options:- partner on the second deal- if the numbers make sense and you could get more cashflow then you could look at a higher price point but my guess is this will be difficult to find- Buy your first property as planned, and save the 35k as reserves and/or just keep it for the next down payment on another FHA after a year- find a place that needs some work where you can use that money to fix up and force appreciation to the propertyPersonally, I would look at those last 2 options where you have the cash on hand ready to deploy for the next down payment or rehab costs if needed.

Purchase price: $74,000 Cash invested: $30,000 Beautifully renovated 4-bedroom split-level home that features a new galley style kitchen with 42" soft close cabinets, stainless steel appliances, recessed lights, updated baths with modern vanities and fixtures, large living room that leads to separate dining room off kitchen, three spacious bedrooms on 2nd level with modern decor, large lower-level family room with ceramic tile flooring with well-placed laundry cove, and recently laid sod in front and rear of property.

Purchase price: $443,000 Cash invested: $60,000 I've included the mortgage, a 5% rental vacancy rate, and a 5% capex reserve.

There is plenty of opportunity in your area to buy properties that have low interest rates, that cash flow and get you to where you want to go for retirement.

A cash out mortgage includes any capital to the borrower beyond the existing mortgage lien, such as funds to recuperate capital investment into the property or consolidation.