All Forum Posts by: Danny McGreevy

@Steffen Cushing - in this scenario, I’m talking about a singular deal.

To help with clarity, I’m only viewing the initial 20% down payment.  Let’s use a 200,000 house as an example.  I have $40,000 available.  Interest rates are 10% in this scenario, and there is also a theoretical index fund that will yield 10%.

option 1) put down 20% aka $40k and avoid 10% interest rates for any portion of the $40k

option 2) put down 10% aka $20k and put the other 20% in the 10% returns index fund

My question is, do both scenarios have the same outcome?

 

@Henry Clark- I’ll try to word it more simply.

Do the two scenarios get the same outcome?  No points involved 

1) put 20% down at 10% interest rate

2) put 10% down at 10% interest rate and invest the money saved on down payment in a fund that grows at a rate of 10%

Does that make sense?

I’m not interested in a personal situation answer, im interested in a pure numbers answer.  

I hope I can phrase this in a clear way.

Scenario: 

1) Is it better to avoid mortgage interest and put say 20% down or 

2) is it better to put down 10% to pay more mortgage interest if you can make the same returns on the money not put down? For argument sake, say that the mortgage interest rate is 10% and the returns of the money not put down are also 10% in the market

or is it the same result?

Don't consider PMI for this scenario

Sorry, I don't see anything linked @Ryan Thomson

Thank you @Ryan Thomson I needed this clear cut decision.  I have had issue with the added interest + pmi when I could afford to put down more, but pointing out that I could put less down, pay more in pmi+ interest, and have more capital easily liquadable but balance out those expenses is very helpful

thanks @Andrew Bosco! I am in NH as well. Are you seeing anything of simply 10% vs 20%? FHA aside

Okay, so my best might be 10% conventional loan IF I can put the money to better use elsewhere? With rates being high and having PMI, this is what pushed me to lean 20% vs. 5% or 10% because I would get much higher cash flow, and seemingly CAC returns as well. But, that means it makes it harder to get a subsequent property.

My internal debate is it is better to get one single higher CAC returns property and focus on that fourplex initially vs. lower CAC return on two different properties and spread myself over more doors.

Am I assessing this correctly?

Hi BP Fam!

I purchased a property recently with 20% down.  If I end up needing more capital for another rental property, I may wish that I put 10% down so that I can have more capital available for another downpayment.

In this event, are there benefits to cash out refi + downpayment on my next property, i.e. only one total of closing costs since only using one lender for a new total transaction, or will there still be closing costs on each mortgage?  

I am trying to understand if that extra 10% that I put into my property is going to be efficient to take out to put towards another property, or if is it going to be expensive now that I've already locked it up in that house and I'd be better off seeing if I can pull the capital from elsewhere.

Thank you as always

Is this how that scenario could be possible?

I own a fourplex, owner-occupied.  I took out a conventional loan for this property and put down 20%.

If I found another investment property that I really liked, would I be able to refi into an FHA loan to take back out 15% to only have 5% equity in my property to use the 15%'s value towards a down payment on an investment property?

Thank you!