Cash on cash return

[Justin Mitchell]

I am buying a property and when I do the math is shows that I will have a higher return rate on my downpayment if I go FHA vs Conventional even though the conventional terms are better. Do I go with the higher return rate and use the extra money I'm saving in investing into more properties or stick with conventional?

[Steve K.]

@Justin Mitchell

....are you saying merely that you're cash on cash return is higher, because you put in a smaller down payment with the FHA?

That's not surprising. The more leverage you use, you'll on paper have higher cash on cash return on the equity invested......higher debt isn't for everyone, but many REI's employ higher leverage. Have you read about BRRRRR ?