Posted by MikeS on July 02, 2003 at 10:28:31:
I just went over this thread. You mentioned, to offer the cash that the seller needs. Where will that money come from ? Decor said something about having a high debt to ratio income.
Using equity from one property to buy another - Posted by Delor
Posted by Delor on February 26, 2002 at 07:09:02:
I have a two family that has a balance of 159,000 and is worth 176,000 ($368 positive cash flow) and a single family that I’m living in with a balance of $134,000 and it’s worth $154,000. How do I use the equity to purchase additional rental property (2-4 familys)? Keep in mind that my debt to income ratio is pretty high.
Re: Using equity from one property to buy another - Posted by Eric W.
Posted by Eric W. on February 26, 2002 at 20:29:01:
You should be looking for sellers who can finance your purchases. You can offer them a note colateralized by one of your other properties. If you need more money, you could leverage both properties to the hilt by splitting the note between both properties to max out your equity. Only do this if these properties are intended as long term holds, though.
Offer your seller the cash that they NEED (determine what they need to get out of this house and on to whatever is next), and have them take back the rest as a note secured by other property(s).
If you buy right, you will have equity in your new property on the day you close, and you can use it for your next aquisition.
Remember monopoly?
In pusuit of the dream,
Eric