A little advice on financing, (please)...


I just wanted to send out a general thank you…I’ve found the posters on this website to be very informative this past month or so.

2 months ago I was “hell bent” on the prospect of doing new construction and building an 8-plex in my high property tax state of New York.

Then after talking with a contrator who has some realistic projections on material costs…and doing my own research on recurring property taxes…that idea, (the 8-plex in NYS), is off collecting dust somewhere.

I then retracted to considering the purchase of something like a triplex or 4-plex, (something maybe 20 years old), in a different state that has much lower property taxes.

My plan is to move to this state…sometime this Winter.

With the different suggestions I’ve read, (mainly here on REI club), I don’t even think I’m ready for this whole triplex or 4-plex type of deal.

So now I’m at the more exciting prospect… :wink: of just starting with a SFH in this new locality. And…it would first just be occupied by my small family. Not the most progressive plan for real estate investing…but realistic. I just don’t want to go hogwild into something I really don’t know much about.

My attempt would be to purchase this first SFH at 30% below retail. I’ve voiced these concerns to a realtor in the area and hopefully he can see my rationale for LT hunting like this.

Even though this first move doesn’t generate any cash flow because of it not being rented out, (I’d still like to find it on the cheap).

Likewise I’d like to continue along this path, (finding a 2nd, 3rd SFH), using this same approach.

My question, (at least in this post), gets down to financing the first SFH. My understanding is that a lender typically wants something like 5% down.

Would I better off putting down more than 5% down. Again, this first SFH is not rentable, (at least not in the immediate short term, as it would be my own residence in this new locality).

I guess right now I’m weighing the leverage factor of OPM and/or having a larger equity position.

I could really use some advice here.

Let’s just say that I had an immediate short term goal of acquiring (5) SFH in the first 1.5 years of initiating this plan. Again, the first is needed for my own residence…the others are for rental income.

I want to conserve my cash position as best as possible for the long term but is it ever wiser to put more equity down…as in the case I have described where the initial SFH is for my own residence?

Any thoughts on how to approach this?

Also, I’m open to any other general suggestions that relate to the move and real estate plan as I have described it.

Thank you,