Higher/Lower Down Payment Vs Holding Savings for Next Deal
Hello BP Family,
Does it make more sense to leave as little of a down payment possible (regardless of PMI) on your first deal (fha) so you can use your cash for the next deal?
If I put 20 percent down, it will prolong the time it will take to buy the next property. The lower down payment allows for potentially buying the next property 1-1.5 years later. the higher down payment will bring a higher cash flow but will take a few years before buying the next property.
Trying to find the best way to enter REI so that I can continue purchasing.
Thank you!
Most Popular Reply
#5 All Forums Contributor
- Plymouth, MI
Lower DP is ALWAYS advisable. YOUR total cost is only what comes out of your pocket. The rest is paid for from the rent money. As long as you have positive CF, the less that comes out of your pocket (DP), the less you are actually paying for the property....and the quicker you start making a profit since profits start only after you have recovered all of your costs.