Author Topic: Where to save 1st rental down payment / purchase?  (Read 571 times)

singletrack13

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Where to save 1st rental down payment / purchase?
« on: May 05, 2017, 03:04:10 PM »
I'm one month away from paying off all of my debt (ex mortgage) and establishing my emergency fund. As I turn my focus towards retirement what investment account would you use for a 1st rental property down payment or outright purchase? Note, this saving would be any excess amount above 401k up to employer match and 2 (wife and I) max Roth IRAs. I'm thinking a taxable account but since until I accumulate enough it will be a rather large time horizon 4-8 years. Any guidance would be appreciated.


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valsecito

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Re: Where to save 1st rental down payment / purchase?
« Reply #1 on: May 05, 2017, 05:01:20 PM »
The fact that you are asking this question means you have a lot of studywork to do still, so coming here to ask about it was definitely a good idea! The financial and fiscal optimum for growing your real estate investment quickly is to leverage it using borrowed capital.

Do understand that leverage involves some risk. Read up on how to manage that risk by doing things like focusing on cash flow. There are some really nice books in the sticky recommendation topic. I learned a lot from them myself too!

Then think deep and hard if you are comfortable with leverage. It makes some people nervous. I will admit that it makes _me_ a bit nervous too, but I chose to take the risk anyway!