How we bought our last property

Everybody's financial situation is different.  Not all of us have the 25% cash to put down on an investment property.  So, we did a bit of "creative financing" with our last duplex:

1. Our down payment consisted of 1/3 our own savings, 1/3 borrowed money (mom), and 1/3 HELOC.  We'd basically been saving half our income every year, ever since we started working.  So, saving a relatively large amount was not a problem.  But, it was still not enough for our very expensive city.

2. We researched extensively. Not only did we look at all the relevant data online, read through tons of forums, etc. But, we also drove and walked through the neighborhood, ate and drank in its restaurants, talked to successful landlord friends, etc, to make sure it was a good investment.

3. We built in contingency plans. We made sure the numbers would still favor us if one of the 2 tenants moved out, didn't pay us, if my wife lost her job or didn't get a bonus, etc.

4. We were very sure that my wife was going to get her bonus shortly after the purchase, which we used to pay off the entire HELOC.

5. If we couldn't pay off the HELOC with her bonus, we were prepared to stop contributing to our 401Ks, stop eating out, etc, until we paid it off. We were prepared to go lean for a couple years in order to get that done.

6. The house had to make money from the start. We aimed for 10% cash flow, and that's about what we got. That way, we could pay off a bit of our HELOC every month, pay our investor (mom) some dividends, and still put some money in our pockets.

Summary:

Some people would've borrowed more money, using OPP (other people's money). Others would've preferred to put more of their own money down, for added safety.

We chose something in between. Everybody's financial situation is different. But, that's how we came up with the down-payment for our last property.