Twenty-five percent down on the fourplex, or the minimum down and keep the cash

Two ways to buy the same three or four unit building and I've watched people argue this without either side moving.

More down: smaller payment, more monthly cushion, and the building carries itself even if a unit sits. On a 500k fourplex the gap between 5 percent down and 25 percent down is a hundred thousand dollars of your money and several hundred a month of payment. Terms available on owner-occupied versus investor purchases differ, and they change, so anything specific here should come from your own lender in writing rather than from a forum.

Less down: you keep the hundred thousand. That covers the water heaters, the year a tenant stops paying, and possibly the next building. The argument is that cash on hand is the thing that keeps you solvent, and equity in a building you can't sell in a week is not.

The counter I take seriously is that a thin payment cushion on a building with four aging systems means every capex event becomes a decision about whether you can afford it, and that's how people sell at the wrong time.

The chapter for this room makes the point that residential financing is the structural edge at this size. Both of these are ways of using that edge and they point opposite directions.