The Short Answer: 0% to 30%
The actual down payment depends on loan type, property type, and your profile. Here's the real breakdown:
| Loan Type | Min Down | Best For |
|---|---|---|
| FHA (owner-occupied 2-4 units) | 3.5% | House-hackers |
| VA (owner-occupied) | 0% | Veterans |
| Conventional (1 unit) | 15% | W-2 borrowers |
| Conventional (2-4 units) | 20% | Small multifamily |
| DSCR Loan | 20% | Self-employed investors |
| Hard Money | 10-20% | Fix-and-flip |
| Commercial (5+ units) | 25-30% | Apartment buildings |
How Down Payment Affects Your Returns
Using a $250,000 rental at $1,800/month rent, 7% rate:
| Down Payment | Monthly Cash Flow | DSCR | Cash-on-Cash |
|---|---|---|---|
| 15% ($37,500) | $11 | 1.01 | 0.4% |
| 20% ($50,000) | $94 | 1.06 | 2.3% |
| 25% ($62,500) | $178 | 1.11 | 3.4% |
| 30% ($75,000) | $261 | 1.17 | 4.2% |
At 15% down, cash flow is $11/month — one repair bill and you're in the red.
The Real Cost: Down Payment + Everything Else
Budget 25-32% of purchase price total:
- Down payment (20-25%)
- Closing costs (2-4%)
- Prepaid taxes & insurance
- Reserves (3-6 months PITI)
For a $250K property at 20% down, total cash needed: $62,000-$79,000.
Strategies to Reduce Your Down Payment
- House hack with FHA — 3.5% down on a duplex/triplex
- BRRRR — use hard money, rehab, refinance, recover capital
- Seller concessions — ask seller to cover 2-6% of closing costs
- Partner up — split the down payment with another investor
Run Your Numbers
I use the free calculators at ArvCalc to model different down payment scenarios:
The right down payment isn't the lowest one — it's the one that gives you positive cash flow with enough reserves to sleep at night.
Top comments (0)