Buying with cash vs financing

[Robert Quiroz]

Hello All,

I will have around $1M in capital that I'm looking to generate 8-10% CoC returns for the purpose of replacing active income. I've decided to go the financing route to protect the value of that $1M against inflation over the next 40 years. However I wanted to get people's opinions here for discussion. I've listed some considerations below for financing vs buying in cash for multifamily home. I'm looking at MFH $450k and up in the Ohio markets (Dayton, Cleveland and Columbus).

Cash:

- Higher CoC returns

- No risk to being having negative cash flow with a loan (excluding capex)

- Buying/negotiating power with speed of transaction 

- No interest payments

- No risk of foreclosure

Financed:

- Possible exponential equity growth 

- Growth of initial investment is leveraged ~4x and most likely beat inflation in a decent area

- Mortgage interest tax deductions 

- Better financial efficiency from more doors

- Better diversification across more properties 

Are there other considerations I'm missing?  The ultimate goal here is to retire as soon as possible and not wait to grow equity over 5-10 years to be able to retire.