My husband and I want to know what's the best way to start out our company. We have a little bit of money to invest and would like to know if its best, tax wise, to pay cash for a property or put 20% down and purchase a couple of properties?
Welcome. You are in the enviable position of being able to choose between leveraged and cash purchases. Traditional real estate investing wisdom says to go with debt, in the spirit of using OPM. Despite that, there is no universal truth, every investor is different... some considerations:
1) Debt can hurt when use speculatively
Taking out loans to purchase the dream property with poor tenant prospects and bad rent-value ratios can put you in a bad place. If you are using other peoples' money, make sure you have a plan, a backup plan, and backup-backup plan for how to pay it back.
2) (Contrarily) Debt can help to spread your risk.
Use debt to buy different kinds of properties in different neighborhoods. It actually makes a difference when you are not overly reliant a single tenant or class of tenants in the same neighborhood.
3) Take on only the debt that you can comfortably take.
If you are losing sleep at night, then you have taken on too much debt. Talk to your husband and family, running a few numbers along the way. Whatever feels comfortable is likely where you should be.