All Forum Posts by: Brett Hannon

I am looking to purchase a house I have been renting/house hacking from a family member. The house was in very rough shape so I renovated it prior to moving in seven years ago. Through the last seven years I have significantly increased the value of the home by adding a small addition, 400 sq. ft. cedar deck, large garage etc..

I have a verbal agreement to purchase the property for $140,000 and estimate the conservative current market value to be around $240,000. My question to BP is can I use the equity in the house to reduce/eliminate the down payment for the mortgage? The seller is willing to assist me in any way. Also, what is the most cost effective way to transfer the property.

Thanks in advance

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Originally posted by @Brian G.:

It affects all of the above. Equity gives you flexibility and multiple exit strategies. If positioned well maybe you only put little or no money out of your pocket. The $140k offer you are talking about is for a property value of $250k. Depending on repairs this could potentially have over $100k in equity. When you secure such a smoking deal money will follow. And finding financing for $140k would not be difficult at all. Tons of lenders will throw money at you to attach their priority security position in the property. If you miss your payment they would love to take the property from you.

@Brett Hannon

Thanks for the response Brian but I don't believe we are talking about the same equity. I am inquiring about the amount of equity the homeowner has in their property before the investor purchases. Not the amount of equity the investor has in the property after they purchase, if that makes sense.

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I have been listening to the podcasts and reviewing the forums and keep hearing the importance of equity when evaluating a deal. I don't understand why this is important to the invester when they are looking to purchase. If the investor offers $140k for the property and its excepted what difference does it make how much equity they have? Does the equity only affect certain types of investing i.e. flippers, wholesalers, or buy and hold? What am I missing here?

Any assistance would be appreciated.

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Good luck @Asif Gill

Are you renting this house or flipping? What area?

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@Paul Timmins @Larry Fried

Thanks for the information I'll look into them.

@Greg Behan @Kevin Delaney

Are either of you involved in any local networking groups?

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Hello everyone, I am a newbie from the philly burbs area specifically lower bucks county. I am soaking up all the information on the bigger pockets website and look forward to sharing my ideas and experiences with everyone.

Currently I am looking for my first fix and flip deal. I have extensive construction experience and hope this can carry me through my first deal. I just wanted to introduce myself and hopefully start networking with some like minded people.

Thanks for your time and I look forward to the meeting some new people.

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All Forum Posts by: Brett Hannon

Brett Hannon has started 5 posts and replied 26 times.

Post: Purchasing a home from a family member

Post: Can someone explain the importance of a homeowners equity when trying to purchase their home.

Post: Can someone explain the importance of a homeowners equity when trying to purchase their home.

Post: My first rehab/flip project in Philadelphia

Post: Newbie Philly Burbs

Post: Newbie Philly Burbs