Welcome to passive real estate investing, the show where busy people like you learn

how to build substantial passive income while creating wealth for the long term.

And now here's your host, Marco Santorelli.

Hello and welcome to another episode. Now here's your host, Marco Santorelli.

Hello and welcome to another episode of Ask Marco,

where I answer your investing related questions.

So today's question is an interesting one from Jeff, and it's about financing the down payment on the purchase of a rental property and he says hey Marco really enjoy the show thank you for all you do

what are your thoughts on financing the 20% to 25% down payment

to buy rental property? In my case I have access to $80,000 at 3.5% and this is based on a 30 year term.

Would love to hear the pros and cons.

Thank you.

Jeff, thanks for the question.

It's a good one.

We get asked this from time to time.

There are many people who consider this option and it actually does make sense in some situations. It really depends on what it is you're trying to achieve and the conditions of the investment.

Now I don't necessarily recommend investing in properties

that generate negative cash flow

because then you're putting money in every month.

But there are situations where it does make sense, and we're going to talk about that briefly here in a minute.

I want to start off by giving you an actual example, a hypothetical example, but to show you the numbers and illustrate the impact of doing this.

And then from there we can talk about, you know, when does it actually make sense to go with higher

leverage or no down payment at all.

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