Cash for 1 home or buy 4 homes with 20% down on each for 139000

[Trenton Custard]

I asked AI should I pay Cash for 1 home then refi or buy 4 homes with 20% down on each home for 139000 3b ed 2 baths then im stuck a 4 home till i get another 20% down there answer was 

When deciding between paying cash for one home and refinancing later or buying multiple homes with 20% down, there are several factors to consider. Here are some pros and cons of each approach to help you decide:

Paying Cash for One Home and Refinancing Later

Pros:

1. No Mortgage Payments: You won't have monthly mortgage payments initially, which can reduce financial stress.
2. Equity: You own the home outright, giving you full equity which can be used for refinancing.
3. Lower Costs: No interest payments and possibly lower closing costs compared to having a mortgage.
4. Better Negotiation Power: Cash buyers often have more negotiating power and can close deals faster.

Cons:

1. Opportunity Cost: Your cash is tied up in one property, potentially limiting your ability to invest in other opportunities.
2. Refinancing Risks: Future interest rates may be higher, making refinancing more expensive.
3. Market Fluctuations: Property values might decrease, affecting the amount you can refinance.

Buying Four Homes with 20% Down on Each

Pros:

1. Diversification: Owning multiple properties diversifies your investment, reducing risk.
2. Rental Income: Potential rental income from multiple properties can generate cash flow.
3. Appreciation: You benefit from the appreciation of multiple properties.
4. Leverage: Using mortgages allows you to leverage your investments, potentially increasing your return on investment.

Cons:

1. Higher Debt: You'll have multiple mortgage payments, increasing your debt and financial obligations.
2. Management: Managing multiple properties can be more complex and time-consuming.
3. Market Risks: Market downturns can affect all properties, amplifying risks.
4. Cash Flow: If rental income is not enough to cover mortgage payments, you could face cash flow issues.

Considerations:

• Financial Stability: Assess your current financial stability and ability to handle mortgage payments and potential vacancies.
• Market Conditions: Consider current and projected real estate market conditions and interest rates.
• Investment Goals: Align your decision with your long-term investment goals and risk tolerance.
• Professional Advice: Consult with a financial advisor or real estate professional to get personalized advice based on your specific situation.

If you prioritize lower risk and less debt, paying cash for one home might be the better option. If you aim for higher returns and can manage the risks and responsibilities, buying multiple homes with 20% down could be more beneficial.

Has anyone had this come up when buying properties? Just trying to figure out best options