Financing
Down Payment %
Share of the purchase price you pay in cash. Investment-property lenders typically require 20-25% down for conventional loans.
Example
On a $400,000 property at 25% down, you bring $100,000 to closing (before closing costs).
Why Down Payment % matters
Down payment is the inverse of LTV and the biggest driver of capital efficiency. Lower down = higher leverage = more deals = more risk. The sweet spot for most investors is 20-25% down on stable markets, 25-30% on higher-risk plays.
Related terms
LTV (Loan-to-Value)
Loan amount divided by property value. Most cash-out refi lenders cap LTV at 75% for investment prop…
Cash-on-Cash Return
Annual cash flow ÷ total cash invested (down payment + closing + rehab). Tells you how hard your mon…
Closing Costs
Lender fees, title, escrow, insurance prepay, etc. Typically 2-4% of purchase price for investment p…