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From: Guy Wood


Hi all, I am after your thoughts on a couple of options.
Say one has access to a line of credit of about $170k from equity on home & IPs.
Option 1: Go look for a good deal & bargain hard cause you can 'write a cheque right now' for the property.
Option 2: Break the LOC up into say 3 lots of $50k & use each for deposit to establish 3 loans of $150k each, then buy 3 properties worth $200k each(or some similar combination).
Any advice/opinions??
Guy
 
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Reply: 1
From: Michael G


Guy,

Just an idea... do both.

First find a good broker, to discuss the idea with, because you want to one who can refinance quickly for the idea below.

Set up your $180k LOC. Start looking for deals (do your due dilligence), and offer cash purchase, with quick settlement. Make sure your getting an EXTREMELY good price.

Once the title is yours, mortgage the house. Say after a period of time, your broker will tell you how long you need to wait.

While you wait you start looking for your next deal.

Once the loan is settled the loan money goes back into your LOC, ready for your next deal.

In theory leverage you applied using all cash purchase should have reduced your costs.

Michael
 
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Reply: 1.1
From: Guy Wood


Thanx Michael,
I use say $150k to buy a property worth $200k
maybe do some cosmetics, have it revalued a shortish time later @ $220 & borrow against that. Inspiring.
Guy
 
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