Buying rentals with cash or mortgage?

Question

I have 8 single family homes that I have purchased cash after I spend whatever amount of time saving with a good deal of success, but feel I am not moving at the pace I would like to achieve my goals. For people in similar situations did/would you continue to save and buy properties cash so you have no mortgages or start taking out loans?

Also, on top of this I manage 30 units for other investors.

Thanks

Also, on top of this I manage 30 units for other investors.

Thanks

Nathan Gesner · Answer

CLICK HERE for an article that explains the benefits of leverage.

Bill Hampton · Answer

Take out mortgages. Use leverage. Interest rates are low. You can get more properties using mortgages vs. paying cash.

Dennis M. · Answer

Refi the houses you own and double your portfolio

Frank Geiger · Answer

Sounds like you need to get mortgages for more properties. 8 free and clear is great! If you want more units, get more units. It’s okay to have a small cash portfolio but if you want to scale debt is an awesome way to do it.

Al Pat · Answer

I did the same but now I am buying more using mortgage and down payment. This helps you scale faster. I realized it little late but not a deal breaker.

Nicholas Eakin · Answer

@Scott Weaner A lot of people say the same thing, but I look at more in terms of being able to leave my full time job after I hit a certain income per month or year to live off of and not depend on another income.

Scott Weaner · Answer

I still can't understand investing in rental real estate using cash. What kind of % returns are you able to get? It must be less than investing in much easier products like stocks or mutual funds.
I would rather allow my tenants to actually buy the property for me!

Jerry Padilla · Answer

@Nicholas Eakin

Cashing out on these 8 properties would allow you to purchase many more and overall should greatly increase your cash flow.

If they are in your personal name with conventional, you could get an LTV of 75% on a Single unit and an LTV of 70% for a Multi-family residence. Conventional does limit you to 10 financed properties, but after that you can go portfolio.

Buying rentals with cash or mortgage?

Buying rentals with cash or mortgage?

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