Your cash to close is not a fixed number
Most investors treat the cash they bring to closing as a fixed cost of the property. It isn't. The same house, bought by the same borrower, can need very different amounts of cash depending on how you structure the deal.
This is something I wasn't taught. I just figured it out along the way over the last 10 years by playing around with the numbers on over 120 of my own US rental property purchases. With that said, I'm going to "teach" it to you now.
When you're figuring out your financing strategy, there are two levers you can pull. One is cutting costs, which is almost pure upside. The other is adjusting leverage, which definitely helps but also carries risk.
The "art" is knowing which to reach for first, and how far to push. Let me show you both on a real deal, the same one from my breakdown of what a foreign national DSCR loan actually costs.
The deal we started with
To refresh you, the property is a $190,000 Midwest rental. The buyer is a foreign-national with no US credit. The best terms I found were from a direct specialist lender at 6.875%, 70% loan to value, no points, with three months of reserves. That worked out to about $69,600 in cash to close, roughly $965 a month in cash flow (rent minus total PITIA mortgage payment), and a cash-on-cash return around 16.6%. A pretty good deal as it stood.
Then one of the brokers I was shopping flagged something that allowed us to put a completely different option on the table.
Move one: the seller credit
The first move, and the safe one, was a seller credit.
A seller credit is money the seller contributes toward your closing costs at settlement. A few rules matter: it goes only toward closing costs and prepaids, never the down payment, it can't be taken as cash back, and it can't exceed your actual closing costs. It's normally structured as a slightly higher contract price with the credit handed back, so the value nets out the same.
For this, we would re-write the purchase contract to a purchase price of $200,000, with a $10,000 seller credit, which nets to the same $190,000 of value.
That $10,000 credit covers the roughly $10,000 of closing costs at 5%, so my client no longer has any closing costs to pay. That's huge, and that's the beauty of pulling this lever: it removes a cost, it doesn't touch your equity or add risk. It's just all upside.
One quiet advantage for DSCR borrowers: DSCR lenders set their own limit on the amount of seller credit. This one in particular allows up to 6%. Conventional loans on investment property are far stingier, often capping seller credits at just 2%. So this move is easier on a DSCR loan than most investors realize.
Move two: the bigger-loan rate tier
The second move is leverage, not cost, so this is where we need to act more cautiously.
That broker had access to a lender offering better rates at larger loan balances. This is a real quirk of the market: small loans often price higher, because the lender's margin on them is thin, so nudging the loan size up can unlock a better rate tier. Taking the loan from 70% ($133,000) up to 75% ($150,000) crossed into that better tier at 7.25%, and it carried the broker's two points.
This is why we had to increase the purchase price. 75% of $200,000 is the perfect price point to hit the lender's $150,000 loan balance at 75% LTV.
That's genuine extra leverage, and I want to be honest that it's a different kind of lever from the seller credit. It helps the cash number, but it also raises your borrowing. Hold that thought, because this is where the upside can reverse if you push it too far.
The two structures, side by side
So, how does this play out for my investor? Here are the two versions of the exact same purchase side by side.
Rent is $2,000 a month, taxes and insurance about $161 a month, 30-year fixed, cash flow shown before management, vacancy, and maintenance.
The same $190,000 purchase, two ways (30-year fixed, before management, vacancy, and maintenance) | Standard (the best deal from last time) | Restructured |
|---|
| Contract price | $190,000 | $200,000 with $10,000 seller credit |
| LTV / loan | 70% / $133,000 | 75% / $150,000 |
| Rate | 6.875% | 7.25% |
| Points | none | +2 (~$3,000) |
| Down payment | $57,000 | $50,000 |
| Closing costs (5%) | ~$9,500 | ~$10,000, covered by the seller credit |
| Reserves | 3 months (~$3,100) | 6 months (~$7,100) |
| Monthly cash flow | ~$965 | ~$815 |
| Cash to close | ~$69,600 | ~$60,100 |
| Cash-on-cash | ~16.6% | ~16.3% |
What actually happened to the numbers
The cash to close dropped by about $9,500, from roughly $69,600 to $60,100.
Monthly cash flow fell about $150, because the loan is bigger and the rate is higher. But the cash-on-cash return barely moved, from about 16.6% to about 16.3%.
Read that carefully, because it's the honest heart of this. You do not always get a higher return by restructuring. Cash-on-cash actually dipped a hair. What you get is roughly the same return while tying up about $9,500 less of your own money.
That freed-up capital is the prize, because across a portfolio it allows you to keep that cash in an interest-bearing reserve account to cover emergencies. And after purchasing and managing more than 120 of my own US rentals I can tell you one thing for certain: there WILL be emergencies, and you will be VERY glad of having that extra free cash available.
The line you shouldn't cross
Here's where I have to be straight with you, because this is exactly where I went wrong when I was scaling my own portfolio.
Reducing the cash you put in feels great, and the temptation is to keep pushing: borrow more, put in less, chase the lowest possible cash to close. In fact, many investors push the "no money down" deal as the ultimate unicorn to aim for.
But there's a hard limit. Push leverage too far and your cash-flow margins get thin, your equity cushion shrinks, and a dip in the market can tip you into negative equity. Worse, thin margins leave you unable to build the reserves you'll need when the roof goes, the furnace dies, a tenant turns over, a unit sits vacant, or an eviction drags on. Those things aren't an "if or a maybe", they're a "when and how much".
The one thing to remember: cut costs first, add leverage last. A seller credit lowers your cash to close by removing fees, with no real downside. Extra leverage lowers it by increasing risk. Use the first freely, use the second sparingly, and never so far that you can't still build reserves.
I learned this the hard way. Early on, every time I refinanced a property my single goal was to borrow the maximum and pull out as much cash as I could. It felt like winning, because I had tax-free cash and was doing exactly what all the gurus were preaching.
Then reality showed up all at once, repairs, turnovers, capital expenditure, vacancies, and evictions, and my margins were so thin from servicing all that debt that I'd never built the reserves to handle it. I didn't have enough cushion at the exact moment I needed one most. That's the difference between a portfolio that rides out a rough patch and one that gets forced into fire sales.
How to think about it
The order is everything. First, cut costs: negotiate a seller credit to cover your closing costs. That's close to pure upside.
Second, and only within sensible limits, look at whether a modest change in loan size or structure unlocks a better tier, as long as it leaves your cash-flow margin and your reserves healthy. Never reduce your cash-in by borrowing to the hilt.
You can model your own version, both structures, on my free DSCR loan calculator, and the wider picture of qualifying as a foreign national is in my foreign national DSCR loan guide. The broker who spotted this tier is a reminder that a good one earns their keep, which I get into in my piece on choosing a DSCR lender.
The bottom line
Your cash to close is negotiable, and restructuring the same deal can free up serious capital, about $9,500 in this case, with almost no change to your return. But the order matters more than the trick. Cut costs with a seller credit first, because that's free. Treat added leverage as a careful, bounded lever. And protect your reserves above everything, because that cushion is what keeps you in the game.
Remember, this is a game of probabilities. Free up capital where you can, but never trade away the margin of safety that turns a good property into one you actually get to keep. When you're ready to run your own numbers, start with the free tools in my foreign investor starter kit.
This article is general information, not legal, tax, or financial advice. Cashflow Rentals is a real estate consultancy, not a lender or mortgage broker. Loan terms, rates, seller-credit caps, and reserve requirements vary by lender, borrower, and property, and change over time. The figures here are from a real deal and are illustrative, current as of July 2026. Always confirm your own numbers with a qualified mortgage professional.
