New Member from Michigan

[Amir Khan]

Hello All, I am looking into buy and hold investing single and multi family. How about buying first property free and clear(cash) Is it good idea ? or I should go with bank money(loan) with 25% down ? Please guide. Thanks Amir

[Josiah Kay]

Hi, Amir! Welcome to BiggerPockets! 

To answer your question, I'll give the old adage of "It depends." Originally, I had a very Dave Ramsey mindset in which I wanted to pursue buying homes free and clear with cash. To me, it was a very risk adverse and "comfy" path. However, once I found my "Why" and defined my goals, it became clear to me that buying free and clear was not going to get me where I needed to be to achieve my goals. For this reason, I switched mindsets and am now pursuing leveraged properties.

If you haven't already, I would recommend that you clearly define and write-down your goals. What do you want REI to do for you? Are you looking to supplement or replace your current income? If replace, how quickly do you want to replace it? Your goals should be what drives your decision on whether to leverage or not. Leverage will most definitely allow you to scale more quickly and increase your ROI, however, it can seem a bit more risky than just having a free and clear property that is cash flowing.