Investors question down payment amounts
13 posts across 9 communities in the last 60 days; 15% from r/Homesteading.
“Yeah, I was just thinking, if anyone here could find anything for $350, we'd jump on it. It seems insanely cheap compared to what we're used to.”
“Good thing we know your financials and since Houston is such a small place, I’m sure we will be able to help guide you on which area to live.”
“More in the future if possible but as of right now I’m looking to get my foot in the door”
Multiple investors inquire about the down payment percentages used to acquire rental properties. One poster specifically asks if 25% was the down payment on all of them, and another mentions needing 25% down in Texas for properties between $200k-$300k.
SOURCES (33)
“Yeah, I was just thinking, if anyone here could find anything for $350, we'd jump on it. It seems insanely cheap compared to what we're used to.”
“Good thing we know your financials and since Houston is such a small place, I’m sure we will be able to help guide you on which area to live.”
“More in the future if possible but as of right now I’m looking to get my foot in the door”
With this one I’m looking to net 450-600 a month with a 60k investment
“$100 a night for 10 villas at 100% capacity all year is only $365k. You need 2-3 housekeepers, front desk staff, maintenance and that alone is most of your revenue.... Unless you plan on not paying them livable wage. Taxes is likely 50k+. Breakfast and other food is another 50k. Hotels work because of efficiency at scale. 1000 rooms can be ran with 10 staff. Housekeepers dont need to flip every room between 12-4 because most people show up later, but with only 10 rooms you need them all ready as”
“Curious how other Real Estate investors view their rental property in the broader context of total investment allocation. I personally view rentals at least mine (~$300K SFH paid for and cash flowing for several years) as similar to other stable assets like bonds. Therefore I feel more comfortable having less (actually zero) bonds in my investment portfolio. What say you? Is it reasonable to lower bond exposure and consider it offset by equity in rental real estate? What's your Chubby Opinio”
“Lennar. South Florida. New build and I bought one of the first properties of 50 home community. I think for another model they were offering 5.125%. Nothing else has sold yet in 6 weeks, but no models available.”
“Agree that $300k is ok. $150k is not really, though. Somehow. Sounds bananas to say it but $150k is not well-off in most of CA.”
Definitely sounds doable with that income and equity cushion.
Thank you! I appreciate the advice and will take it into account :)
“Sounds like a winner to me boss. Even if the cashflow is a little tight, your ROI on down payment vs what you’ll make when (if) you sell is huge. I’d buy this all day”
“Don’t need to know the city but curious on the state. I’m in MO & have a decent sized portfolio of single up to 4 unit properties. It’s done very well for me. No huge cash flows but amazing appreciation & debt pay down so the net worth & therefore return has been great.”
“Mind how I ask how you got started? Trying to be in the same position in 15 years.”
“You are counting on people to have saved up $35,000 for the down payment. That's not something most renters have set aside.”
“Where is this cash coming from? The good thing about the real estate is that the renters are funding the money.”
“I'll have plenty for a down payment when I sell my current home. Should be around 30-40%, depending on what my current house eventually sells for, and what house I end up buying.”
“It’s the ladder down pre pay. I’m patient and as long as rents don’t drastically go down I’ll be fine and can wait out a better time to refi”
“I own a few duplexes and 4plex and a ton of SFH. I’m hoping to buy a 20+ multi family property next.”
“If you're investing based on rough slide rules, you're probably an idiot. Every deal is unique. Every city is unique. You just need to calculate the numbers on the individual deal. I mean we're talking like a few minutes of spreadsheet work to consider hundreds of thousands - millions of dollars invested. Like, even going down a bit in scope: Maintenence. "Well, buildings of this form factor, and this age require x% maintenence" You should be drilling even deeper and be eva”
“My units are similar and yeah about half have adjusted to higher rates. One local bank readjusted to 9.35%!! Uhhhh No. I modified it down but still high.”
“Pure cash flow $400-500k. Wide range due to every year has different capex costs. But I also have over $200k and rising principle pay down yearly and appreciation (not guaranteed). Yes I self manage. I own another real estate related business as a day job.”
“just dmed you - really interested in chatting and learning more from your experience!”
“Doesn’t make much financial sense anymore TBH. Not when you look at the SP500 returns last few years in comparison. But I’m still buying because I’d rather have the units and believe rent will grow again……someday.”
are you a full-time REI at this point, or do you maintain your W-2 income?