First time homebuyer down payment or no down payment?
Hello BP community! I'm brand new to this whole REI thing with a grand total of 0 investment properties...but looking to grow! I'm in the Air Force and will be stationed in Enid, OK for the next 3+ years. Looking to buy a few rental properties while I'm here to start building that asset column. I have some renovation experience so I was looking at doing some version of a live-in flip for a year (to take advantage of primary residence mortgages), move out and start renting the property, buy a new property, and repeat for 3 years - ideally with 3 cash flowing rental properties when I leave.
I have a home I'm looking at that my relator thinks we can get for $180,000 and based on similar listings can rent for around $1400/month...its a new-ish build so it won't need a ton of reno other than a few cosmetic upgrades (<$5,000). My question revolves around what type of mortgage should I use and what kind of down payment makes sense?
Option A: VA loan with $0 down. The property will cash flow around $125/month after I move out (conservative estimate)
Option B: Conventional Loan with 20% down ($36,000). The property will cash flow around $275/month because of the lower mortgage payment (again, conservative estimate)
I've had a ton of friends use the VA load with nothing down on primary residences turned rental properties and it seems like a good way to preserve capital - seems smart especially if I'm gonna be purchasing additional homes in the next year that may need $20,000+ in renovations. On the other hand, I've been told by my father-in-law as well as my relator that if I'm able, I should save my first time homebuyer VA benefits for when I buy a more expensive house in the future and put 20% down on a conventional loan to pay into this first home's equity, and lower the mortgage payment which ups the cash flow another couple hundred dollars...also seems smart. My biggest apprehension is that this $36,000 down payment is going to cut pretty deep into my cash reserves (pulling this out of the stock market) and only leave me with about $15,000 for future ventures (without dipping into emergency fund/savings).
Not sure what the right answer is here. Thanks in advance for the help!
-Alex