Firstly, what a great forum. I’ve spent the past two hours devouring all of the great information on here. I do have a question, though.
I am getting ready for my first deal. It is an $85k 1br, and I plan on making an offer of $70.
But my real issue is about how much to put down. If I put down 20%, I can avoid having to pay PMI. However, in my reading tonight, I’ve read that you should put down the minimum so as to keep cash available for other deals.
Both are correct. If its a rural property you may be able to get a USDA RD loan, these have no PMI. I don’t know what you’re gonig to do with property, but if multiple properties is what you want look for seller financed homes. Herbster
It would depend on what you plan on doing with the property. Are you going to wholesale it? keep it as a rental? or rehab it and resell it? Answering that might help giving you a better answer.
I agree with Mike. Use other people’s money to make you money. Don’t use your own (or much of it). By putting 10% down you may be paying $50 in PMI but you will have $8k to put as 10% down on your next property which will net you way more than the $100 ($50 on two properties). OR you can put that $8k into renovations that will create more than that in equity and possibly increase your rental income. Whatever you can do to reduce your total upfront costs will increase your Return on Investment and that is ALWAYS good.