Rental Property Investor · Charleston, SC · Member since 2018 · 29 posts · 13 votes
Good evening, BP.
I will have a one-time cash inflow from a land sale in the near future.
Once deposited, I will have a myriad of decisions on investment types.
My first question will be: If I choose a single family home to rent, I can pay cash for one property and have a good cash flow with no P&I or I can use the money as a down payment on two or three properties (each with lower cash flow due to loan re-payment).
Rental Property Investor · Pompano beach, FL · Member since 2017 · 478 posts · 194 votes
8y
With interest rates still @ historic lowes, making money cheap, I like 15 or 30 yr fixed, utilizing leverage to buy several properties. Even when Feds raise rates this year, you are protected as long as your numbers are solid.
Rental Property Investor · Pompano beach, FL · Member since 2017 · 478 posts · 194 votes
8y
With interest rates still @ historic lowes, making money cheap, I like 15 or 30 yr fixed, utilizing leverage to buy several properties. Even when Feds raise rates this year, you are protected as long as your numbers are solid.
Lender · Miami, FL · Member since 2018 · 28 posts · 14 votes
8y
Patrick, do you remember playing the game 'Monopoly' as a kid? One of the great lessons in that game was how leveraging multiple properties in the beginning, or a higher priced property in a prime location, may not give you the same immediate return in the present, but paid off hugely in the long term. For investors, it really comes down to your preferences and priorities. Some people like to fix and flip because they want the immediate return, while others prefer to buy and hold for long-term equity and income. One is not necessarily better than the other, but using your money to leverage larger or multiple investments can definitely pay off. Either way, you have a good problem with good choices.
It sounds like you are in a good spot either way. It will really come down to your personal preference. i Agree with @George Griffith about the monopoly game, but dont make any moves that you might not be comfortable with. If you are still up in the air, could you put 20% down on 2 properties rather than three? You could keep any left over cash for reserves, and once you are feeling confident you are well on your way to rental number three. I have been in the game for a few years now, so if i had a large influx coming my way, i would be comfortable with leveraging it out on a few properties. You could always pay cash for the 1 property, and get us to the landlord process for a year or two, and once you feel like you are ready to grow your business, you could refi that property and buy a few more.
You have options, and that is all that matters. Do what you are comfortable with :)