Put more then 20% down? - Posted by Brian

Posted by JPiper on April 04, 2000 at 12:39:21:

You don’t give many details about this 12-unit. But my attitude would be that you need to find a deal, which this doesn’t appear to be to me. Personally, I wouldn’t put 20% down to breakeven. Nor would I add to the downpayment to make the deal work. Your return is going to be extremely poor.

Chances are you’re paying full price. Go find a deal.

JPiper

Put more then 20% down? - Posted by Brian

Posted by Brian on April 04, 2000 at 11:22:13:

Soon I should be selling a property to a developer. I plan on taking the money from that sale and put it into another property(s)- basically a 1031 exchange.

I’m being very selective on which properties I buy, because I want to stay as close to home as possible. I’ve been talking with the owner of a 12 family which he owns free & clear, but it doesn’t sound like he would do much as far as financing is concerned. I can get this property for about $450-460K, meaing I would need about $90-92K for a 20% down payment. This in turn should leave me with a small negative cash flow that can be “absorbed” from the great cash flow I get from my rooming houses.

The question is…the sale of my above property should give me about $175K for re-investing in other properties for 1031 exchanges. Should I put more then the $90-92K down on the 12 family so there won’t be a negative cash flow, or go with just 20% down and use the rest for other property(s)?

Thanks