Posted by Brandon on November 26, 2002 at 20:29:09:
I’ve been taught that cash should be used to buy “discounts,” and pay for reimbursable fees, not down payments. $300 a month on $35,000 is only around 10% ROI. I’d take the $700 per month cash flow and conserve the cash.
Losing Sleep - Posted by Ellen
Posted by Ellen on November 26, 2002 at 09:49:45:
This “problem” has kept me up for 2 nights. Sometimes you can’t see the forest for the trees, you know? I read the responses to the 1.5 million equity question. Mine is on a MUCH smaller scale. You guys are brilliant, and I need some input. The subject property is a 2 family and a single on one lot. Price - $94,000. Cash flow will be $700 (bank financing) or $1000+ if I use a line of credit I have on another property plus $35,000 cash. The question is, should I use my own cash? The bank wants 20% down, or 10% with PMI, plus the usual fees. ($$$) I could also do a cash out refi on another property, but I just transferred the title into an LLC, and I’d need to ask you even more questions about that! I know some people are trying to figure out how to buy their first property and wish they had my “problem”. I’ve been there, too. The whole “use other people"s money” thing has been burned into my brain. Your comments would be very much appreciated.