Balancing Down Payment with Solo 401k Loan Repayment

[Veronica Ivy]

Hi experts. I have a property under contract. I'm going to use funds from my Solo 401k for the down payment, repaying it at 4.25% over 5 years (the interest goes back to me, which is the great thing about Solo 401k loans; also there are no admin fees, origination fees, etc etc for such loans since I'm both the applicant and the one approving it).

The question is: how much down payment makes the most sense?

Purchase Price: $191,000

Annual Rent: $1750x12 = $21,000

15% down: $30,000. 5yr 4.25% annual repayment: $6,600. Annual PITI w/ PMI: $14,812.00

20% down: $40,000.5yr 4.25% annual repayment: $8,900. Annual PITI: $13,156.00

25% down: $50,000. 5yr 4.25% annual repayment: $11,100. Annual PITI: $12,472.00

(I'm rounding up the 401k loan to the nearest 10k for simplicity).

With reasonable vacancy and repair annual costs, the annual cash flow looks like for the first 5 years only:

15% down: -$4,312.00 After 5yrs: $2,348.00.

20% down: -$4,888.00 After 5yrs: $4,004.00

25% down: -$6,424.00 After 5yrs: $4,688.00

It seems to me that 20% down is the sweet spot. Considering the 5yr cost of the down payment and what the subsequent 5yrs look like seems to bear this out even more. Thoughts?