How Much Should You Put Down on Your First Rental?
August 26, 2026
AI Summary
5 min readHow Much Should You Put Down on Your First Rental?
On this episode of the BiggerPockets Real Estate Podcast, Dave Meyer and Henry Washington answer forum questions from investors navigating first deals, house hacks, 1031 exchanges, and exit strategies. The through-line is consistent: in today's market, conservatism beats optimization, and staying in the game matters more than maximizing any single transaction.
The First Deal: Don't Swing for the Fences
Justin from California has $100,000 saved and wants to buy multi-family units in Ohio, Michigan, or Wisconsin. His question: should he put as little down as possible to buy multiple cheap properties, or put 20% down on fewer units?
Henry Washington's answer is blunt: "Your number one goal in your first deal is do not lose. Just don't lose your shirt." The properties Justin is eyeing—$120,000 to $150,000 multi-family units—are cheap for a reason. They come with deferred maintenance, management challenges, and tenant problems that are brutal for an out-of-state first-time buyer with no local team.
Dave Meyer agrees, but adds a structural constraint most first-timers miss: investor loans for out-of-state purchases typically require 25% down, not 20%. So Justin's math is already off.
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What you'll learn
- 1 (00:00) **Introduction: The Core Tension of Your First Deal** - Dave and Henry frame the debate between maximizing returns and playing it safe on a first rental property.
- 2 (01:15) **Question 1: Justin’s Down Payment Dilemma** - A California investor with $100k asks whether to buy multiple cheap multifamily units with minimal down or fewer units with 20% down in the Midwest.
- 3 (03:17) **The "First Deal" Strategy: Buy One Good Property** - Henry and Dave agree: buy one higher-quality multifamily with 25% down to build a team and gain experience.
- 4 (06:27) **Break & Advertisements** - A series of sponsor messages for WeShare Health, Steadily landlord insurance, Fundrise, and Rent to Retirement.
- 5 (10:04) **Question 2: Trent’s House Hack Math** - A future Florida resident asks if a duplex with $2,400 in rent and a $2,200 mortgage is a good FHA house hack.
- 6 (13:54) **Should You Underwrite Future Rent Increases?** - Trent asks whether to base numbers on current rents or factor in future growth.
- 7 (14:38) **Question 3: Angela’s 1031 Exchange on a Flip** - A flipper asks if she can use a 1031 exchange to roll $80-100k profit into 2-3 long-term rentals.
+ Full timestamped outline available in the app
Guests on this episode
Show Notes
You’ve saved up some money and are ready to buy your first rental property. Now comes the question: How much do you put down? Do you buy multiple cheaper properties or splurge and put the entire down payment into one bigger, arguably more stable rental? Should you start to scale from the jump or test the real estate investing waters before committing more money? After buying dozens of rental units, Dave and Henry have a clear opinion.
We’re back with your questions from the BiggerPockets Forums! A real estate rookie is wondering whether they should spend $100K on one down payment or split it up into multiple, cheaper rental properties. Another is planning on putting very little money down on his first house hack, but do the numbers add up in this not-so-stable housing market? If you’re ready for your first deal, both of these answers could give you peace of mind.
You’re about to sell a house flip for some serious profit—can you move that money (tax-free) into rental properties via a 1031 exchange? And if so, is the 1031 exchange worth the headache that comes with the timeline? Finally, a landlord is fed up with their rental and wants to sell. She has two choices: sell for cash and break even, or fix it up and potentially realize a five-figure profit. Would Henry, the renovation expert, make that bet?
Ask Your Question on the BiggerPockets Forums!
In This Episode We Cover
How much you should put down on each rental property you buy
What a solid first house hack actually looks like (mortgage, rent, etc.)
Why we don’t factor in rent growth (most of the time) when analyzing rental properties
Can you use a 1031 exchange to turn a More from this podcast