The Return on Investment on Extra Down Payments
Manage episode 379749762 series 3467349
The Return on Investment on Extra Down Payments
You’re buying a rental property. You have more than you need for a down payment, closing costs and reserves. One option you’re considering is putting more down.
Putting more down will often improve cash flow and Cash on Cash Return on Investment. The dollar amount of returns from Appreciation and Depreciation remain unchanged but, it can also lower your overall return on investment from Appreciation and Depreciation because your investment amount has changed. And putting more down changes how much debt you pay down and the amount you invested lowering your return on investment from debt paydown.
In this mini-class, James will look at how putting more down changes your return on investment so you can make an educated decision as to whether it makes sense or not to put more down and see improved cash flow.
Check out the video from this class here:
The Return on Investment on Extra Down Payments - Video
In this class, James discusses:
- James Orr's Return Quadrants™: Return in Dollars Quadrant™, Return on Investment Quadrant™ and Return on Equity Quadrant™
- Loan Comparison Spreadsheet
- The returns in dollars for Nomad™ with 5% down
- The return on investment for Nomad with 5% down
- The returns and ROI for 15% down
- How 5% Nomad™ compares to 15% down and the return on the extra down payment
- Similar comparisons for 20%, 25%, 30% and 40% down payment options
- Cash on Cash Return on Investment approaches Cap Rate
- Plus much more...
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