This is not an article about tricks for 100% (no money down) financing. Even if you do take advantage of various no money down strategies from time to time, these strategies are not generally applicable when you begin investing systematically in multiple rental homes with the goal of making significant rental income.

This is because some of these strategies require a degree of deceit and careful timing, others require difficult-to-find pricing or seller situations, and others require sophisticated legal instruments and training, or a combination of all of the above. These complex strategies are good for selling mentoring programs, books and training courses.

However, none of these methods are practical, in our opinion, as a consistent practice for profitable and stress-free ethical investing. For a consistent winning program of investing, you want to be able to act quickly, repeatedly, openly and consistently, which will enable you to build up a portfolio of rental properties in a relatively short period of time.

It is therefore much more profitable and sensible in our opinion to play it safe and keep it simple. This means to focus on obtaining good investments from the point of view of future rental income and appreciation, and pay whatever down payment the banks require.

Simple as that. If you do this, you will be able to build up a portfolio of properties quickly.

You can still get very good loan deals by shopping around for financing, or by using an independent loan broker. Make sure your loan broker shops around on your behalf. Standard bank financing at good interest rates generally needs only a 5% to 10% down payment for investment property, which is not very much in the big picture.

Unless you are going to flip a property quickly, you probably want to maintain positive cash flow for most of the time you own a rental property. This is true even if you eventually plan to sell the property at a profit. After all, you never know how long you may have to hold the property before its value appreciates significantly, particularly if you have to survive the inevitable down turn in property values which can last a year or more. The only way to ensure you can comfortably hold the property as long as you need is to have positive cash flow each month.

To this end, consider the advantages of paying a full 20% to 25% down payment. This will allow you to qualify for the lowest interest rate programs. Lower interest rates mean lower monthly payments, which mean positive cash flow. In fact, with a 20% to 25% down, you may qualify for so-called "payment option loans" with minimum payment rates as low as 1%. With these loans, the minimum payment stays low for the first 5 years, with a payment increase cap each year of just 1.075 times the previous year