Yes, the downpayment was taken from a property here in California. However, I will be using the cash flow from the new property to pay back the downpayment so it is not a big deal.
(A lot of people spend the cash flow or use it to augment their salaries. My household runs a surplus on its own so we just use the cash flow to pay down the borrowed downpayments).
See above post with the “cash on cash” discussion. Important thing: if you are borrowing money to buy a real estate investment property, you have to look at the “cash on cash” value and decide if it is high enough. Since this property’s cash on cash number is 18%, much higher than my requirement of 9%, the property is a good enough deal to borrow money to purchase.
If the cash on cash number is at 9% or less, it is not a good candidate for borrowed money.
