Does money down really make sense in the cash flow business?

[Felix Krull]

I am asking this honest question as a newbie, and I hope I will get some honest replies. I don't know a whole lot about REI, so I hope someone will correct me where my thinking is wrong. I am interested in buying my first rental property but don't really see the point in putting money down on it unless I'm treating it like a bond (i.e., I intend to recoup my principal at a later date).

Just to keep the math simple, let's say I buy a multi-family property for $100k, I put $20k down and I'm able to net $500/mo from the rent. It'll be 40 months before I recoup my initial investment. It seems to me that that is a long time just to break even on my initial capital outlay.

I understand the ideas of equity and capital gain from price appreciation on the underlying asset, but just from a sheer cash in the pocket standpoint wouldn't it make more sense to try to minimize the initial out-of-pocket acquistion cost on the investment?

Again, I'm new to the financial concepts of real estate. I'm a stock investor at heart so I'm accustomed to evaluating investments from a yield on cost perspective. Thank you for your insight in advance.