Should you use your cash or finance your next real estate transaction?
Monday Apr 05th, 2021
Financing is one of the fastest ways to grow your real estate portfolio.
Let's keep the numbers simple, for math sake and to really have an impact. You have 1 million dollars cash to spend on real estate investments. Take a look at the following 2 options - which would you choose?
Option 1 – You buy $1 million house in cash which brings in $72k in gross rent/year.
Option 2 – Divide your million into 5 separate $200k down payments, use financing for the rest, and buy 5 multiplexes bringing in $72k EACH.
Not everyone has a million dollars laying around. That’s not the point. Whether you have funds sitting as equity in your house, a HELOC on your property, or have savings sitting in the bank waiting for “the right moment” to get into the market – use your cash wisely!
This is not just for investment properties. Why pour all your cash into buying a house? If you have extra funds, put the smallest down payment possible (speak to a great mortgage broker), and keep your cash for improvements, other investments or that next down payment!
Let go of dated theories regarding mortgages + financing and use these tools to accelerate your growth. For more real estate tips, follow our instagram @buysellinvesttoronto