How to know how much cash to put down

[Pope Lake]

When you’re looking at buying a property for cash flow with a conventional mortgage loan, how do you know what cash amount to put down, if you’re looking for optimal RoI and cash flow?

For example, let’s say I’m looking to buy a property for $300k and I only have to put down 3.5% with an fha loan. I can put down the $10.5k (3.5%), but what if I can afford to put down more, lowering my mortgage cost?

Sure, I can have higher cash flow potentially if I put down more money up front, but what if I put down too much and waste my cash?

If I want the highest cash on cash RoI and highest cash flow, how do I know what the sweet spot is when considering a down payment?

[Jason D.]

@Pope Lake the "sweet spot" is a personal decision. Less down will provide a higher COC ROI, and more down will increase cashflow.

Personally, I want as little down payment as possible, because the cash I save will, hopefully, always make a better return that the interest rate of the mortgage.