I was working some numbers the other day on an investment property that would hold it’s own with only 5% down. Seriously. That includes expenses…all of them. So I picked up the phone and asked a trusty local lender if there were any 5% down payment options for the Kansas City real estate investor.
The answer, not surprisingly, was “no”.
March 2007 represents, to me, the end of non-owner occupied loans that were easy to get with terms not favorable to the lenders. It all began to change rather quickly after that.
So as you are planning your next purchase for an investment property here in the Kansas City area you’ll need to plan on a minimum of 10% down. Don’t forget closing costs and reserves.
On a personal note, I’ve always thought it was better to have a minimum of 10% into your income properties, anyway. Just seems to make sense. If a property “breaks even” at 10% down it might even be good to go ahead and put 20% down for the extra safety/cash flow. (That sound you just heard was Jeff’s head exploding.)
It all depends on your risk tolerance and goals.
For all of your questions and comments regarding Kansas City real estate investing, feel free to contact me.