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Updated almost 9 years ago,

User Stats

112
Posts
34
Votes
Geo Tan
  • Real Estate Broker
  • Los Angeles, CA
34
Votes |
112
Posts

Higher Down For More Cash Flow?

Geo Tan
  • Real Estate Broker
  • Los Angeles, CA
Posted

Hello Bigger Pockets Community,

I was just wondering since LA is such an expensive market, what would be the pros and cons of paying a higher down in a well appreciating area to stay afloat with positive cash flow in places like Los Angeles.

For example, my biggest struggle right now is finding a property in the greater Los Angeles area that will provide cash flow but at the same time not fall behind on appreciation in comparison to major urban areas like Koreatown or Downtown LA. 

I know that it is important to use OPM to gain max returns on the investments but there is no way I can pay close to a thousand out of my own pocket per month to make the money back and then some with appreciation. So what if I paid 40% or 50% down on a property to allow positive cash flow while reaping in the benefits of appreciation as well. Besides greater risk by using more of your own money than loans, what downsides are there to doing this as my initial investment to start my portfolio?

Once again I apologize if this is a horrible idea or if I'm ignoring some basics in real estate investing.

Thanks in advance!

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