Buying rental properties can be an effective way to build net worth and generate positive cash flow over time.
The minimum down payment requirement a for rental property purchases is 20%, unless one of the units is owner occupied. If one unit will be owner occupied, you can still purchase with as little as 5% down and regular mortgage insurance premiums apply.
Properties with more than four units fall outside regular residential mortgage insurance guidelines. Some lenders will finance buildings with more than four units, and some will allow commercial components as well. Underwriting guidelines are more strict and sizable down payments are required for these types of properties.