Capital down or cash reserves

5 Replies

I have been through the grueling awesome process of selling my house to buy apartments. 4 plex $375k 5% down (18750) 2bd 2bath $3250 total income $2350total debt service $300 total utiltes and misc cash flow $600 month. My question to you wise experienced investors. I will owner occupy and the offer at 5% down I will live there rent free but pay $300 a month in utilities. I have enough capital to pay down the debt service to 12% ($45k) so I can live there 100% free. Should I take advantage of the low down opportunity with no rent and hold on to the capital or use the capital to pay down the debt service and raise cash flow?

Use the 45K and additional savings to buy another property.

@Brandon Thomas  Having cash reserves is way more important than avoiding a $300 per month utility bill. Keep at least 6 months PITI plus some extra for capex in a bank account, and sleep better at night. Use what's leftover toward your next property.

@Ron Averill  @Eric Taylor thanks for the reply. With three units paying for the debt service leaving me with the 300 a month in utilities at 5% down, does this sound like a deal worth doing? 

Where do you get your  misc cash flow $600 month? 

sorry cash flow is $600 per month. Utilities and misc are $300 per month 

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