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Updated about 4 years ago,

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4
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Brian Baller
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4
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About to close on a deal. Please help me choose btw 2 properties!

Brian Baller
Posted

Hello, my name is Brian and I am new here and this is my first post! Exciting stuff on my end as I am about to close on my first BRRR rental property. A new listing just popped up that has me scratching my head. Hoping you guys can help me out.

Property 1) Purchase Price = $540,000, ARV = $740,000, $0 left in the deal so Infinite Return, Cash Flow = $1000/month, 1st year Principle Paydown = $13,800. Total Return = $25,800. (This is the property I am about to buy).

Property 2) Purchase Price = $600,000, ARV = $720,000, $60,000 left in the deal, Cash Flow = $1750/month, 1st year principle paydown = $14,420, Total Return = $35,420

Situation: I have about $XXX,000 cash and a good paying full time job. my goal is to accumulate more real rental properties and do it as soon as possible (like many of you guys on here).

Does leaving $60k cash in the deal to get better cashflow/return the better way to go? It's roughly an extra net return of $10k per year going with the 2nd property. Over 30years, that's $300k difference all said and done. OR do I go with the 1st property and pull out all of my money? In my situation is liquid cash more valuable than extra cash flow? 

I am not needing the extra cash flow for my day to day needs, I just want to set myself up so that it is easier to borrow money moving forward.

Any feedback would be greatly appreciated.

Thanks a bunch! 

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