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Which falls outside of the scope of defining what is investment vs. gambling - especially when talking about calculating cash flow on an investment purchase. :) As previously said in this thread, 105% is used to make it easy to compare apples with apples. Otherwise you can put a 90% deposit...

The same thing can happen even if you put in cash? In your eyes it would still be a gamble. Prices can go well below 80% of the price you pay, too.

Your net asset position still goes backwards making the purchase, even if you use cash. The idea is that if you have a property with an expectation of growth or related to this thread CF+, this will outstrip the reduction in asset position from the buy in costs.

You betcha. I think I've posted about these a fair bit on the forum. :) There are a few on the forum walking the same path, DT being an example. Calculate at 105% because this includes all funds placed into the deal. Otherwise you're not factoring in the equity loan used, or cash injected...

Very true. Most investors that I work with that are serious about purchasing CF+ properties, calculate their interest costs at 105% purchase price - as they are generally using equity to purchase than cash.

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