Pay single family off or finance a unit?

[Kush Gulmatico]

Hello BP My wife and I️ need your advice, we have 138k to invest and we found 3 single family that we made offer. One is 60k which is rented out for 800 a month, the other two is 30k each which equals to 60k, 600 and 675 a month for rent. Last is 18k with generates 575 a month of rental. ALL CAN BE PAYED OFF CASH!!! Then we found an 18 unit complex for 495k which we could make a lower offer. But let just say 495k. So they are asking 100k down and finance the rest 395k. 15 of the units are rented for 575 and the other 3 for 650. Which route would you go for payed off or financed? Thank you BP

[Brent Coombs]

@Kush Gulmatico, how do those first three compare with sold comps in those areas? And how does the 18 unit complex compare to the market cap rate for that area?

You need to be able to answer those questions thoroughly and accurately before we can even begin to respond usefully. We also need to know: how did you arrive at those answers?

I tend to agree with Larry regarding the seeming randomness of your selections, which says to me that you're just itching to spend your money, on whatever looks cheap.

But, thanks for asking. You have found the right place fork these questions! Cheers...

[As a rule of thumb, using your cash as a 25% deposit, gets better ROI than paying all cash!]