Self fund first property or get loan?

[Shawn Nofziger]

My wife and I are both six figure earners. We have the means to self fund two to four properties off the bat.  I know there are pros and cons to each side of this question but is it better to self fund your first deal or to put a down payment for a real estate investment loan? What seems to be the overall consensus on this question? And if the answer is well it depends, what does it depend on?

And my apologies I should have prefaced this by saying I am very new with all of this and am trying to put together a roadmap and plan for where I want to go with everything. I love that there is a forum for being able to ask questions like this in and get a great responses back. I really appreciate it

[JD Martin]

Congrats for having means to do it - that takes discipline and foresight.

I can't tell you what to do, but I bought my first 5 properties with cash outright. Eventually I figured out that if I sunk all of my cash into properties, I wouldn't be able to buy any more for a long time and starting using some leverage. But I started off really conservative because I lost a bundle of money on my first go-round. 

What you do depends on your long-term goal. If you only plan on owning 2-4 properties, then there's really no harm in self-funding them unless you know a better, safer way to make more than the going interest rate on that money (most investment mortgages right now are about 7%, maybe effectively 5.5-6% after taxes depending on your brackets and tax structure). If your plan is to own a lot of properties, then you are probably better off getting notes as you go. After my beginning I started using my cash to make outright offers then financing back out of them later, usually 6-12 months down the road. Even at that, all these years later I still have a lot of cash locked in properties.