Put More Money Down to Breakeven or Take Short-Term Loss until Possible Refinance

[Dorothy Y Yang]

Hi All,

Grateful to be part of this community. I'm buying my first out-of-state rental property. Given interest rates (even though they are coming down), generating cash flow seems to be challenging without doing a rehab, which I don't want to do for my first out-of-state investment property. One way to get to breakeven or generate more cash flow is to more than 25% down. However, I'm hearing from some lenders that there could be interest rate drops in the coming year or so and I can refinance. That said, no one can say for sure if and when that might happen.

Thoughts on if it's better to put a larger downpayment now to at least breakeven vs. taking a short-term loss on cash flow and take a gamble on being able to refinance sooner rather than later? For context, I feel grateful that I don't necessarily need the cash flow right now and can afford taking a short-term loss, if it indeed will be short-term.

Thanks and Happy Thanksgiving!