How much downpayment is too much?

[Dan Fendius]

My wife and I are close to being under contract on a single family home with a MIL suite. We are planning on renting out the MIL suite to a travel nurse or possibly putting it on AIRBnB (we live close to the beach). We have the ability to put up to $100k down. This is very enticing after seeing what we would roughly owe on the monthly mortgage even if we are conservative and say we will only make $1,000 a month income from the MIL suite (I think we could easily get $1,500).

Purchase Price: $380k

Taxes/Insurance: $9,300 yearly (estimated)

Downpayment: Up to $100k

My vision for the next 1-2 years is to live in the house and use the MIL suite income to pay most of the mortgage while saving enough for another down payment on another home that would become our primary residence. I am planning on turning the house above into 2 rentals now and pulling out the $100k (refi or heloc) to put down in addition to the amount we saved over the year or two on the new house.

Is it worth putting this much down if I am planning to pull it out in 1-2 years and put on another property?

Thanks in advance!

[Kerry Baird]

I'm also in the "put less down" and keep some back for emergency or down payment for the next property. If you can do this move in and rent out part strategy a few times, even up to 4 plexus that can be owner occupied, you will be out of the rat race faster and with fewer transactions than if you save up to buy one non-owner-occupied NOO SFR and then another and then another.

Yes, that means moving once every 12-24 months, but for a short and intense period of time. 

Food for thought.