How much $ SHOULD I put down?

Question

I am wanting to buy a 4 plex as an investment property. I have about 75-100k cash. Properties are about 200k. How much should I put down? Enough to make it cash flow? The minimum and keep as much cash as I can?

Theresa Harris · Answer

If you plan to buy other rentals, then putting the minimum amount down will leave you money to buy another investment property.  Don't forget to keep money for repairs and vacancies.

Joe Villeneuve · Answer

Put down as little as you can, based on what the lender says...and still cash flow.  If you put down more than you need, you're wasting your money.

Scott P. · Answer

Put down enough to avoid PMI.  (I'm not sure if PMI is even an option on a 4Plex.)

I think that except for once, I always put down the minimum but enough so that the lender didn't escrow property tax and insurance.  That may not be possible now-a-days if your loan is being sold a a GSE.

You can always make extra payments if you'd like to build equity in a particular property sooner.

Good luck!

Thomas S. · Answer

The minimum amount allowed. Having the least amount of equity in a property will produce the maximum return on investment and allow you to own multiple properties sooner. Leverage is your best friend when growing your investments. Paying down a mortgage does not increase cash flow on the property it buys cash flow while reducing your ROI.

Tim Johnson · Answer

If I was you I would house hack this thing, but 10% down and make double payments.  I'm not a huge fan of Leverage in RE.  I understand it very well, but I don't use it.

How much $ SHOULD I put down?

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