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<blockquote data-quote="Jimi77" data-source="post: 8887676" data-attributes="member: 673702">It&#039;s not a deposit requirement.&nbsp; It&#039;s the amount of cash I calculated one would need to put down so the property would be cash flow neutral after you purchased it.&nbsp; IOW, IF you put down ~40% on these properties, you would have a cashflow neutral property; OTOH, if you put 20% down, the property would be cash flow negative.&nbsp; What do I think is driving it?&nbsp; I think (know?) that prices were driven up by artificially low interest rates, so the property might be cashflow neutral with 20% down at 4% interest, but at 8% it&#039;s cashflow negative. If you understand how bonds are discounted, this is a similar situation except except the property would need to be discounted.&nbsp; So now because of the of the underlying finance these properties are kinda frozen off the market.&nbsp; I can&#039;t imagine there are lots of people with ~$4-700k to put down on these properties and of that cohort, how many would be willing to put down that much when properties are no longer quickly appreciating and deal with the headaches that come with property management.&nbsp; It would make more sense to put that money into a dividend paying stock that may not appreciate quickly, but gives you cash flow and no headaches.</blockquote>

[QUOTE="Jimi77, post: 8887676, member: 673702"] It's not a deposit requirement. It's the amount of cash I calculated one would need to put down so the property would be cash flow neutral after you purchased it. IOW, IF you put down ~40% on these properties, you would have a cashflow neutral property; OTOH, if you put 20% down, the property would be cash flow negative. What do I think is driving it? I think (know?) that prices were driven up by artificially low interest rates, so the property might be cashflow neutral with 20% down at 4% interest, but at 8% it's cashflow negative. If you understand how bonds are discounted, this is a similar situation except except the property would need to be discounted. So now because of the of the underlying finance these properties are kinda frozen off the market. I can't imagine there are lots of people with ~$4-700k to put down on these properties and of that cohort, how many would be willing to put down that much when properties are no longer quickly appreciating and deal with the headaches that come with property management. It would make more sense to put that money into a dividend paying stock that may not appreciate quickly, but gives you cash flow and no headaches. [/QUOTE]

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