Buying a 2nd IP question

[Nick_A]

Ok so I've read Michael yardneys book on the importance of capital growth & how it gives you the ability to buy more property by using the equity gained in your original property. A friend of mine told me in his experiences things have changed a bit now and banks may not rely soley on the capital gain but also the cash flow, and if the cash flow is quite poor the banks will then refuse to loan against that property. What are peoples experiences on
this?
Many thanks

 

[Bigtone]

Ok so I've read Michael yardneys book on the importance of capital growth & how it gives you the ability to buy more property by using the equity gained in your original property. A friend of mine told me in his experiences things have changed a bit now and banks may not rely soley on the capital gain but also the cash flow, and if the cash flow is quite poor the banks will then refuse to loan against that property. What are peoples experiences on
this?
Many thanks

Previously if u were strong in one area, equity or cashflow money was easy to get, now lenders want both. Still exceptions of course but as a rule they want both.

 

[gooram]

It depends, if you've got other income to support the negative income from a good growth asset, the banks will help you out. Nothing has changed here.