My Master Plan....Good, bad or Ugly.

Member since 2025 · 13 posts · 6 votes

Hello all.

I am looking to put down 50% on my first rental, not 25%. My thought is that this will achieve two things for the foundation of my master plan: to buy more properties. First, it will make it easier to obtain the next loan by showing property 1 with 50% equity plus $1,000 net income after ALL expenses. Secondly, it will generate revenue to cover the costs of my next few homes with 25% down. My current home is paid off, so I have HELOC and refinancing options available. Additionally, I have savings as I should, since I'm 62 and not one of the young ones on the forum with decades to build equity.

My ideas seem sound to me, but is it more of a waste not to buy two homes with minimal revenue, betting on appreciation? Or other better strategies with my senerio?

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Jaycee GreenePro Member
Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 726 votes
1y
Quote from @Tom Amon:

Hello all.
I am looking to put down 50% on my first rental, not 25%. My thought is that this will achieve two things for the foundation of my master plan: to buy more properties. First, it will make it easier to obtain the next loan by showing property 1 with 50% equity plus $1,000 net income after ALL expenses. Secondly, it will generate revenue to cover the costs of my next few homes with 25% down. My current home is paid off, so I have HELOC and refinancing options available. Additionally, I have savings as I should, since I'm 62 and not one of the young ones on the forum with decades to build equity.
My ideas seem sound to me, but is it more of a waste not to buy two homes with minimal revenue, betting on appreciation? Or other better strategies with my senerio?

Hey @Tom Amon, welcome to the BP Forum! If you put 50% down on the first rental, how much additional money will you have available (to pay for unexpected costs/repairs/etc.)?
What type of properties are you seeking, SFR, 2-4 MF, or 5+ MF? What is your price range/down payment amount? Are you looking for turn-key properties or something along the lines of a "fixer upper"?
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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
1y
Quote from @Tom Amon:

Hello all.

I am looking to put down 50% on my first rental, not 25%. My thought is that this will achieve two things for the foundation of my master plan: to buy more properties. First, it will make it easier to obtain the next loan by showing property 1 with 50% equity plus $1,000 net income after ALL expenses. Secondly, it will generate revenue to cover the costs of my next few homes with 25% down. My current home is paid off, so I have HELOC and refinancing options available. Additionally, I have savings as I should, since I'm 62 and not one of the young ones on the forum with decades to build equity.

My ideas seem sound to me, but is it more of a waste not to buy two homes with minimal revenue, betting on appreciation? Or other better strategies with my senerio?

I started off buying houses all cash. Eventually when I started using financing none of the banks I used cared a nickel that I had paid-off houses, other than just looking good on my asset sheet. They wanted to know how much cash reserves I had, how much loan to value I was looking for, and how much income outside of rentals I had available for my expenses and that of the rentals.
On your second question, never bet solely on appreciation. There are too many things that can work against you that you can't control. If a property can't generate at least enough cash flow to pay for itself (that includes reserves for capital expenses, maintenance and vacancies) you really should pass. Also - even at 7/8% - good rental properties should be profitable with or without a mortgage.
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Kerlous TadresBusiness Member
Realtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
1y
Your plan makes sense. Putting 50% down gives you strong equity, solid cash flow, and better loan terms for future deals. It’s lower risk and sets you up for sustainable growth. Buying two with 25% down adds risk and thinner cash flow, less ideal at this stage. You're building smart.
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