Rehab property that I can get for $225. ARV of $300. Needs about 20K of work.
I have the funds for $100K down with money still left over for the rehab work, but have heard time and time again to go with 0 down. If I go 0 down and pay interest only, where I can have a lower payment by putting a large amount down…aren’t I letting the bank have some of my profits?
In a nutshell, is it still best to go 0 down, even if I have the funding?
Personally, the spread between ARV and purchase price (including repairs) is a little slim for my taste. But I guess we all do have our own requirements as far as what % we will pay of ARV. Did you equate holding costs or marketing costs in there as well?
Anywho, to your original question, leverage is the key to this business-for the most part. Like Keith said before, get in and get out, and take your check at the end. If you can qualify for zero down there is no reason you shouldnt do it. Watch for prepayment penalties. I think I too would go with an interest only mortgage.