Financing - Posted by mayababy1

Posted by CarolFL on April 25, 2007 at 07:12:43:

The short answer will probably be cash flow and resources. Overestimate everything - expenses, time to completion if there is work to do. Underestimate income (for your own purposes). Then add a ‘fudge factor’ to cover the things you haven’t thought of. There’s nothing wrong with using an asset to acquire and asset, as long as it’s part of a workable plan.
My .02.
PS Would HIGHLY suggest investing in Ray’s Dealmaker’s Guide to Commercial RE. Commercial is ‘another world’… great fun… but different game, different rules,and different language from residential.

Financing - Posted by mayababy1

Posted by mayababy1 on April 24, 2007 at 07:39:34:

I am new to real estate investing and have just begun the research (or learning) phase. My interest is in apartment buildings, and I was wondering if it would be a wise decision to take out a home equity loan (say $40,000) to cover the downpayment on a property around $200,000

Thank You

Re: Financing - Posted by Monica Villasenor

Posted by Monica Villasenor on May 30, 2007 at 02:22:24:

You are certainly on the right track. Home equity is how I purchased my first multifamily property. The key is that the cash flow much be large enough to cover the lender’s payment, plus the increase to your mortgage. If it does not, then it’s not a deal.

You should read my book-which is written especially for people like you-those who want to transition into commercial real estate. It is a whole different ball game than residential real estate investing.

Best of luck!