Spend more and leverage or spend less and use cash?

[Rita Oliva]

There are two scenarios below for a first purchase. What would you do? Let's say you could buy a turnkey property for a market value $67k that cash flows at $400 a month after all expenses. With a 20% down payment and closing costs, you are in it for $17k. You don't have much equity in the property but the acquisition cost is low and it cash flows immediately. You also could buy an equivalent property off market for $55k. It will only need about $1-2k to make it rent ready and once rented t will rent for the same amount as the property above. Since the purchase price is low, you would have to buy it will cash. You need $60k cash upfront to buy the property and get it rent ready. Let's say the ARV will be $67k. Which option would you choose if you only had $60k to invest and plan to build a portfolio of buy and hold properties?