Posted by Matt on September 26, 2003 at 09:25:33:
Another option is to use some of that equity in purchasing another property. That way you still keep your equity and hopefully have a no money down purchase of another property…
Is $10,000 cash worth more than? - Posted by CTH
Posted by CTH on September 26, 2003 at 04:48:18:
I have a 3/2/2 that I could sell and net about $10,000 very quickly.
Or equity appraised in May 03 equals $20,000?
When attempting to finance a larger property is the cash better than the equity?
Currently has positive cash flow of $225.00 per month.
Property appraised at $97,000.
Re: Is $10,000 cash worth more than? - Posted by jasonrei
Posted by jasonrei on September 28, 2003 at 01:55:07:
Depends on what you would do with the $10k. If I had such a property (and assuming like a million other things) I’d hold it. $225/mo is a nice return with depreciation and potential appreciation to boot.
Re: Is $10,000 cash worth more than? - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on September 26, 2003 at 11:39:58:
CTH--------------------
It sounds to me as though you are sitting pretty here. You don’t have to move hastily. You can sit with the positive cash flow coming in and wait for some situation that suits you to a T.
One possibility would be to look for a more expensive rental property, such as a small multifamily 2-4 units. Then propose a 1031 tax-free exchange with an owner of such. You move your equity into a property which provides more value for appreciation and tax benefits, and perhaps more cash flow.
You might do mailings of purchase solicitation letters or postcards to the owners of such properties in areas in which you would be willing to own properties.
Good Investing*Ron Starr
Re: Is $10,000 cash worth more than? - Posted by Brent_IL
Posted by Brent_IL on September 26, 2003 at 10:16:30:
The loss-of-opportunity cost is 27%. While that may be nothing to write home about, income may increase as time goes on and many people do worse. I think Matt’s right that there is a better way. As he suggests, you could make a $20,000 note and use it as part of your next offer. You could make monthly payments of $225 and still own the property. Since the folks we negotiate with are somewhat motivated to sell, few folks will ask about the LTV.
Re: Is $10,000 cash worth more than? - Posted by ken in sc
Posted by ken in sc on September 26, 2003 at 07:35:26:
They are basically worth the same. If a house appraises for 100K and you owe 80K, then there appears to be 20K equity. But if you sell, it will be vacant a few months costing you money, and there will be some bargaining, closing costs, maybe broker fees, etc making you likely to net only 10K from the sale.
Your question is really should you sell. That will depend on your personal situation financially and your goal when purchasing the property. Did you want fast income of 10K or monthly cash flow plus equity build up and tax benefits? Only you can answer that. Either way it looks like this deal has paid off.
Ken