Mario, I think you're asking how much free equity to look for when purchasing via AFS? That is, what is the difference between the mortgage obligation and the market value of the property?
Thomas is right, the correct answer is "it depends".
At $10K equity on a $300K property, it's near enough to zero to consider the property 100% financed, without you having to qualify. That could be good if you have a solid exit plan in place and some decent cashflow or it could be disastrous if there's no exit, no cash flow, and no reserve. With little or no equity, the most critical element is going to be a solid exit strategy at the AFS expiry. Second is that there is some solid cash flow. You need a decent spread between your revenue and your income. That's really hard to do when financed 100%.
Thomas is right, the correct answer is "it depends".
At $10K equity on a $300K property, it's near enough to zero to consider the property 100% financed, without you having to qualify. That could be good if you have a solid exit plan in place and some decent cashflow or it could be disastrous if there's no exit, no cash flow, and no reserve. With little or no equity, the most critical element is going to be a solid exit strategy at the AFS expiry. Second is that there is some solid cash flow. You need a decent spread between your revenue and your income. That's really hard to do when financed 100%.
That's exactly what I mean Jim, free equity!
It's very hard to find sellers willing to give away more than $10,000 in free equity. However, most of the time they are almost 100% financed.
Ron mentions around 10-15% in free equity(no repairs) but it's really hard to find those types of deals!
Thank you!
Mario
It's very hard to find sellers willing to give away more than $10,000 in free equity. However, most of the time they are almost 100% financed.
Ron mentions around 10-15% in free equity(no repairs) but it's really hard to find those types of deals!
Thank you!
Mario