Should you use your own money or a loan to buy a home you intend on fixing up and reselling?

Member

I know this is something plenty of people do. They buy homes really cheap, fix them up over a year or two and then resell them for a nice profit.


My question is, when doing something like this, is it better to use your own savings or to get a loan?

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May 3, 2020 9:15 PM

I think it is best two use both. Most people don't have enough cash laying around to cover both the cost of buying a home and repaired it. I would say to use the loan to buy the home and pay for the repairs out of your own pocket though so you can pace yourself.

May 5, 2020 2:57 PM

Both if possible. I agree with the comment above about using your own money for the repairs because you can always take time off from that, you can't take time off from paying off a house.

May 8, 2020 5:37 PM

Member

I'd also suggest both. Unless you have lots of money to spare, a loan makes sense.

As I'm sure you're aware, the more loans you pay back on time the better rates you'll get which only increases your profits further.

May 19, 2020 12:23 AM

Member

Why not both? You can use the loan to buy the home and use your own money to fix it up. I think that is the best way to go about doing this.

July 26, 2020 2:07 AM

Member

You could do whichever you like.


Use your own money if you can afford it. A loan has interest which cuts into your profits but they can be nice to take away some of the sting from a big investment.

July 27, 2020 1:22 AM