To leverage or not to leverage

[Kevin H.]

Hello all,

I have been looking in the northern NJ market for a multi family house to use as a rental property. It has been almost 2 years and I was able to submit a handful of offers and in 2 occasions was close to being an accepted offer. (The close offers were a tad shy from the highest bid)

I learned that 20% offers are way more attractive then 5% offers when in a highest bid war. Which if this is the case, I can’t leverage because I will simply not win on any of my 5-10% offers. What should I do? Do I continue with 5-10% offers until I luckily land something or try with 20% down?

Returns are way greater with leveraging but here in NJ, when the “perfect” homes pops up in the market, the number of bids is ridiculous which make it so hard for my 5-10% offer to stand out. I can continue this route but it has been about 2 years now and I really would like to have at least 1 property under my portfolio instead of saving all my capital and not do anything with it.

What should I do?