I'm looking at the different advantages of purchasing properties cash vs mortgage. Obviously I like the lack of risk with purchasing cash but I also like the leverage of purchasing with a mortgage. IE buying 5 50k properties vs buying 1 with 50k cash.
What are your thoughts on the risks vs rewards? Which do you prefer and why?
Matt Cramer, Cramer Properties - Keller Williams Realty | 269‑290‑3317 | http://www.prospectingrealestateagent.com | MI Agent # 650137
I would rather maximize financing and have more money in the bank and for reserves. I prefer a consistent mortgage payment and getting more properties. Here in NY property taxes are high and I hate to hand out thousands and thousands in one sitting.
I buy mostly in cash and get short term <5 year loans from private investors, occasionally hard money. You will get passionate answers from both sides on this site. Both strategies have made people wealthy :)
Every situation is different and depends on your niche and strategy. I'm like you. I would rather use leverage to purchase more property rather than using up all my cash on one deal. My first deal I did owner finance on a 5 year note. I'm going to do a cash out refi on that property and use the cash to purchase more properties and just keep on leveraging.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!