Risks of Purchasing the Property with Full Cash

[Levi Wood]

Hello everyone,

I was wondering if there are any risks in buying a LTR property full in cash without any downpayment. For instance, if I want to invest in a 200,00 dollars property, it can be any type of house, multifamily, SFR or whatever, it is a good idea if I just pay the house at the full price? Are there any risks involved that I may not know? It is better to purchase a property with standard leverage, 20% downpayment?

[Caleb Brown]

It depends on your situation. Most would rather spread the 200K across multiple properties as a down payment. Often you'll have better returns by using it as a DP. You can also capture more appreciation with having more than 1 property. Cash is great because you have no mortgage, low risk. Just run the numbers weigh both options. You can always refi or do a HELOC down the road if you wanted to utilize the equity.