To Down BIG or Not to Down Big(... fha): Financing for Newbies

[Emil Pinlac]

Hello All - 

Quick Question for the Forum: 

Should a NEW investor proceed in purchasing a property based exclusively on the merits of the DEAL (Cashflows 200-300 per month, good CACR) even WITHOUT 15-20% down and without a rehab budget on a property? (Assuming they have great credit, and can qualify for an FHA of 3.5-5% down/ or utilize private money loans?)

OR.

Should a NEW investor instead exercise caution in purchasing a property UNTIL they have at least 15-20% down and additional funds for a rehab budget, regardless of the merits of the deal (so long that the deal cash flows). 

Keep in mind, this scenario is for newbies.Let's assume this is for a small (2-4) multifamily property in a HCOL area, and the investor was willing to house-hack. (I guess he/she has to, in order to qualify for better financing, right?). 


What are everyone's thoughts?