Should I take a DSCR loan or pay cash on a 210K property?

[David Rosenfield]

Hi all. First time poster here but really need some advice. I'm under K on a 2 BR/1 bath condo in Myrtle Beach that I've spent several months looking for. It's a good deal: 210K and I'll at worst break even in 8-9 months (and be able to use it the other 3-4) but potentially could make $$ depending on whether I pay cash or take a loan. To that end, I'm not eligible for a conventional loan so I applied (and was approved) for a DSCR loan at 8.375% with a 3/2/1 prepayment penalty. I'd almost surely refinance or pay it off in year 2 or 3 but in those 2-3 years I'll have paid approx. 13K/year in interest alone plus another approx. 5K in appraisal/closing cost/prepayment penalty fees. I have the 210K cash but it represents approx. 1/3-1/2 of my liquid net worth, with the other half being illiquid. If I pay cash my COC return will be approx. 8%. If I take the loan it goes down to approx. 2.5-3%. The ONLY reason I'd take the loan is to save some "dry powder" for my next purchase as I'd like to get 2-3 more properties in the next few years. But the thought of paying a lender 8.5% when I have the money sitting in stocks/bonds which almost surely will not go up 8.5%/year over the next several years (and potentially could go down a lot) is very unsettling. Curious what others would do in my position and also if I pay cash, how feasible would it be to get a mortgage after the fact and/or a HELOC loan in the event I wanted to raise capital for my next purchase? Thanks for any thoughts/advice and greatly appreciated.

Slight update: I've since realized I put 50% down and my rate with a 3/2/1 prepayment goes down to 8%.  Or at 50% down with a 1 year prepayment penalty the rate is 8.375%.  I'm inclined to go this route with the 1 year prepayment option.  But curious to hear others' thoughts.  Thanks much all!