First Rental Property - Wait to build cash reserves for positive cash flow?

[Mike Jaquith]

I am just starting out in my hunt for my first property. I live in the suburbs of Portland, OR.

On most properties I'm seeing, if I put 20% down, most, if not all, of these properties are negative cashflow in the amount of usually $200-300.

Should I wait to put down more like 30-40% to ensure positive cashflow or am I being too cautious?

[Matthew Kwan]

HI Mike,

It really comes down to what your long term goal on investing real estate. You want to invest just to have a place to live and potentially offsetting your mortgage payment by renting out the vacated rooms or having x amount of cashflow in the future? Looking into single family houses or multifamily, as there is an actual land that you own and potentially build ADU/DADU in the foreseeable future. However, if you build the ADU and not condomise it, they appraisal will only view it as a SFR and give you the rent as SFR at 75% if lease agreements is being used. If you want to maximize your max rents then if might be a good idea to condomise it so that you can get rents as two separate units. Since last year of November, Fannie and Freddie has allowed borrowers to put min 5% down for conventional loans and being able to invest multifamily up to 4units.

@Carlos Valencia @Albert Bui