20 or 25% down on your SFR rentals?

[James Park]

I just received an investor's rate quote from the bank yesterday. 4.6% with 20% and 4.125% with 25% 30 year conventional.

For those you who manage mutiple single family home rentals, do you take the lower rate by putting down 25% or take the higher rate with only 20% down.

I am starting small and looking to invest in a 3/2 or 4/2.5 SFR near where i live.

Thanks

[Ned Carey]

There are a lot of factors you haven't mentioned.

As Mike Jakobczak mentioned what would you do with that other 5% if you didn't put it into the rental? What kind of reserves do you have? Putting every last penny into a rental is risky but if you have other reserves putting more down is less risky.

How do you feel about risk? What is your long term plan? Do you want to grow as fast as possible with some added risk, put less down. Are you content to grow your portfolio over a period of years? Put more down.

Also what kind of deal are you getting? How much I put down might vary based on how good the deal is. Am I getting this for 25 cents on the dollar, 50 cents, or paying full retail.

I know I haven't answered your question but I hope I have given you some things to think about.

Good Luck - Ned