How much of funds to use with private investor
Hello - I have a bit of a spin on the age old question: To use all of your savings on your first property or not.
I have 10k I have saved in 6 months to put towards a property.
I have planned to use 5k of my own funds and a private money lender for the remaining 14k at 5% over 10 years.
My question is this: Should I use all 10k of my own funds and only borrow 9k (at 5%) so I don't have to pay as much interest to the private money lender as I would on the 14k?
My thinking has always been that if I have 10k to put 5k into one unit and then continue to save my net monthly cash flow from this unit (see below) + job savings on top of the other 5k I have left to buy a 2nd property by the beginning of summer '17.
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Property:
Listed at $105,000, PP: $95,000 (plus 4k seller credit), Rent history: $1,100 past 3 years. 20% down (19k) puts the loan amount at $76,000.
Monthly Income (rent): $1,100
Monthly expenses (including taxes, insurance, HOA, P&I): $810.15
Positive Cash Flow: $289.85
Monthly Private Money Lender expense: $148
Net Monthly Cash Flow: $141.85 (to go towards next unit)
Key words: rhode island, providence, savings, down payment, private money