Buying single family homes as investments

Last year I actually bought 6 single family homes as investments.

My goal was to mark them up 3 to 6% and then sell them in a year.

At first my plan worked well. I made almost everyone put $5000 down and I made 3% when I bought the home.

My cash flow on each home averaged $100 to $400 per month.

A year later, only one exercised their option and several of the renters moved out. I learned that I couldn't rent the home for what I was renting it for, so I lowered it down to my cost.

Currently I have 5 homes that are barely renting for my payment.

The moral of the story is, you can't buy a home that you plan on only making 6%, you need to make at least 20% or the deal isn't worth doing. 30% would be better, but the deals get harder and harder to find.

If you have a home that you are willing to just sell for what you have into it, give me a call. If there is enough equity in the home, I might be interested in putting it into my portfolio of homes.

I am looking for homes under $150,000 that are great wholesale deals.

Thanks Burke Bennett
http://www.seidahohomes.com/
208 589 5599
burkebennett@hotmail.com

Credit cards are a two-edged sword

Credit cards can be a tool or a vice that destroys you quickly. I have used them for both.

Once I wanted to build a home. The builder wanted $10,000 down.

I gave him $10,000 off a credit card I had that charged me $75 and zero percent interest.

He built the home for $162,000. I then had to get a loan and cash him out, and I used it to pay off the credit card before they started charging me interest.

This is truly a nothing down deal, and a credit card was a great tool. I currently have this home under contract to sell for $198,000. So basically I used $75 to make $27,000.

I have also had deals where I used a credit card to put my 10% down on a home. Six months go by and my client doesn't exercise his option. Now I am paying 9.99% interest while I hope he exercises his option.

It can be an expensive way to get a deal done, and really only works if the deal is short term.

I guess the best philosophy is that if you use credit cards to buy assets, you are usually ok. Just make sure your assets are liquid enough to pull the money out in time before the higher interest starts to eat you alive.

Thanks Burke Bennett
http://www.seidahohomes.com/
208 589 5599
burkebennett@hotmail.com