WWYD With This Property?
I just entered escrow on a new property. It's a 3/2.5 commonwall home in a bedroom community of large city. Properties in this town are VERY reasonably priced compared to the city, it's about 30 minutes commute on a little used highway, and I think this community is ripe for some "catch up" appreciation.
I'm paying $102k for the property, could resell now for $130k. Or, I could rent it for and cover a mortgage and I would have no funds (well, maybe a couple thou) tied up.
I am just starting out (this is my second property) and I'm trying to build up my cash funds. However, my city is appreciating rapidly and if I hold this for a couple of years I'll likely see another $20k on sale.
Any advice? TIA 
Sounds like a good candidate for a lease option. If the rent alone would cover the mortgage, then your rent plus your additional going towards sales price will increase your monthly cash flow nicely... Plus - after each year of your lease, if your tenant/buyer doesn't excercise his/her option - you can increase the price to take inflation into consideration.
Good Luck!
[addsig]
my opinion would be do the flip for the cash fund and buy another house in area. if in fact the area is due for catch up.
It all depends on your investing business plan. I would like to hold long term rentals but frankly I don't have much cash to put towards anything right now.
I decided that I was going to do some flips, rehabs, and some other short term investments to build up my cash reserve. From there I'll feel more comfortable tying my money up for long term.
If it were me, I'd resell for the cash but your investing strategy may be completely different. You should just look at what you are comfortable with.
GOOD LUCK
Thanks for the feedback. I think you make a good point frogger; it all depends on the investment strategy. I'm really trying to increase my cash funds right now so it's tempting to get a quick $20k infusion... but long term I do want to buy and hold some properties and it's not that easy to find ones that cash flow. This property is only 4 years old and in excellent condition, so it SHOULD be a low maintenance rental if I go that way.
Decisions, decisions... I guess these are nice kinds of choices to have though
There is always another deal to be had. And, other appreciation to be realized. If your current strategy is to build cash, stick with that strategy.
If you have other sources of getting cash. I would use those to buy more properties and keep them all. Why not ride that appreciation wave. On the other hand if you don't have other sources of cash you could sell and use the twenty thousand to leverage several more properties.
Lexis/nexis, costs a fortune.
Find a young and eager partner who has the time to run around and do these things at the courthouse for a piece of the action. Cheaper, S/He can also take pictures and check other things.
Use your good credit and cash from that nice full time job to make the deals happen.
Thank you Commercialking--I will look into that.
Does anyone have any other suggestions until I find a good person to do the research for me?
[ Edited by results_one on Date 09/09/2004 ]
Have you tried calling the County Recorder's Office (Or the equivalent where you are from) and asking them if the information is available to you online? Generally they are the place that has all of the records of liens, notices of default etc. If that information is available online where you are, then that's a bonus for you.
Good luck,
Jeff