You don't save that much by not paying principal by going IO, you lose in equity appreciation arguably more.

Some have more than $1 million in equity while others have less.4.

We've got $150k+ in equity and it just seems like there should be a way to pull enough of it out to put $85k down on the new house (mortgaging the remaining $65k) before we sell the current one.I'm guessing this is kind of how it would have to go...1) refinance home for $210k, leaving ~$95k cash2) $85k down on new home, finance $65k (9.5%?

This is unless you 1) have cash to spare and don't think you'll have an investment to put it into in the near future or 2) it just won't cash flow with debt (in which case, it better be in a really good area you think will appreciate, or you should probably flip it).But overall, OPM (other people's money) is one of the biggest advantages of real estate since you can earn a big return on a small investment and protect yourself from risk by buying right and getting built in equity.

Hi all,I am new to BP and just starting to research how to start becoming a buy and hold investor under extremely limiting circumstances and was hoping the BP community could shed some light on the best financing strategy to use for my first few properties.Current Financial SituationA little background on my current situation: I am 28yrs old working in television in NY ( making roughly 55-60k a year- yes it is brutal) I just bought my first primary home 2 years ago in Williamsburg, BK to lock in how much I’m paying for housing year over year in a place where incomes don’t increase as fast as rental prices (2 bd for 340k (this is an HDFC which is how I got a home for this price in an area where the median price is 1.5 million) ) so obviously my DTI is extremely high at almost 60% with no other debts besides my primary home (I also have a roommate who pays me $900 a month for her room which helps with about half my total monthly housing costs) (had a great mortgage broker that really helped me wiggle in to my first home)I now have about 75-80k in equity in the home and access to a family trust with a similar amount of money in it and was looking for the best way to turn buying an initial first property all cash into the ability to buy more properties( out of state of course- looking at different areas in the country from PA to TX to TN to FL).

I know we gained about $10,000 in equity in about 3 months just from the market going up.

Is it possible to refi into the LLC with $10k cash out leaving $20k in equity in the property?

There could be related party issues as well.Seems the trick would be converting the note (could have deferred payments) to the S-Corp to increase value.Without getting other entities involved, lending your money with interest income won't get to capital gains treatment.Probably the easiest way is to have him share in title and not make this a lending issue, you can devise a lot of strategies inside an operating agreement in an LLC and again, having a S-Corp as a member.Back on notes, I'm not a fan of sitting on the fence with one foot in equity and the other as a lender.

You will see lower cash flow in Martinez / Columbia but you will have the greatest opportunity for seeing gains in equity when the market fully restores.

The site is still a work in progress (I just have "portfolio" view now, but working on individual property views), but since the discussion came up...Real Life RentalsI also have some "non-turnkeys" for which I'm tracking the same way.To answer your question, the results look great for one property (built in equity and high cash flow, over 20% cash on cash return) and bad for another (no built in equity and major repair killing cash flow, negative return).