Ask a newer investor what it costs to buy a $1.5M rental and they'll say $375,000 — 25% down. Ask an experienced one and they'll give you a different number, because they count everything the acquisition actually consumes: the down payment, closing costs, immediate repairs, lender and carrying reserves, and representation costs. The gap between those two numbers is where first deals go wrong.
The full stack
- Down payment — typically 20 to 30 percent for investor loans, with pricing that improves at 25% and above.
- Closing costs — loan origination or points, appraisal, title, escrow, recording, and prepaid taxes and insurance. On investor loans, 2 to 3 percent of price is a realistic planning figure, and points can push it higher.
- Immediate capital — repairs and rehab required to reach rentable condition, plus furnishing for short-term rentals.
- Reserves — many DSCR and portfolio lenders require several months of payments in verified reserves after closing.
- Opportunity cost — capital locked in one acquisition is capital that can't close the next one.
Why the total matters more than any line item
Returns are computed on total cash invested, not on the down payment alone. A deal projecting an 8% cash-on-cash return on the down payment might deliver 6% on the full check — still fine, but only if you knew the real number going in. Investors who model total acquisition capital also make better portfolio decisions: two deals with lower individual returns can beat one deal that traps all available capital.
The levers that actually reduce it
Three levers move acquisition capital in a meaningful way. First, price — every dollar negotiated off the price reduces the down payment and most closing costs proportionally. Second, loan structure — trading rate for points changes the cash-to-close and the monthly payment in opposite directions, and the right answer depends on your hold period. Third, closing credits — a credit applied at closing returns capital to your basis directly.
On the third lever, one detail matters for investor borrowers: how a credit is treated depends on the loan program and lender. Confirm with your loan officer how any credit will be applied before you build it into your cash-to-close plan.
You don't make money on the return you projected. You make it on the capital you actually had to commit.Zeego investor principle
How Zeego changes the math
Zeego represents investor buyers for a 0.75% fee and credits up to 1.75% of the purchase price back at closing — $26,250 on a $1.5M acquisition, applied to your closing per your lender's rules. The Deal Analyzer computes your cash invested both with and without the rebate so you can see the effect on cash-on-cash return before you write the offer. Because you source your own deals, you never pay for property search you don't need — and the model repeats cleanly on acquisition two, three, and ten.