Increasing Portfolio

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From: Mike .


Equity
From: Peter
Date: 1/3/00
Time: 8:37:31 AM

Hello & Happy New Year We bought a home and after 18 months & reading "The Book" we went out and bought another. We had gained about $70k equity in our home but after injecting more money & refinancing our own home as well, we now have 2 homes and about $140k equity. But we used equity to buy the second one!

We can't just keep using the same equity over & over can we? Am I wrong in believing it to be similar to a sort of Guarantor? If you use it to purchase a house do you have to build it up again before you buy your next one?
 
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Les

Reply: 1
From: Mike .


Re: Equity
From: Les
Date: 1/6/00
Time: 4:55:12 PM

G'day Peter,

Sorry, mate, I can't tell from the figures you've given just "what's going on". But, in essence, your last comment is correct - you can't use the same Equity twice without first replacing it. But, if you did a REALLY GOOD DEAL, you MIGHT have purchased a rental at a $70,000 discount, so when it is revalued (after doing it up?) you appear to be another $70,000 in front.

Why don't you put a bit more information in, so we can understand just what has happened with you. I hope it's like the example above :)

Les
 
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