From: Tom Moschitz
What LVR to folks use when establishing whether a prospective IP is cashflow positive? Using an LVR of 110% as part of an aggressive strategy has a very different outcome to one of 80% as part of a more conservative strategy.
A recent discussion agreed that the most important figure when accessing a deal was pre-tax cash flow. If one is to leave the rat race obviously this figure needs to be in the black. At what stage it becomes black depends on the individual strategy. Using an accelerated no money down strategy means initial costs are much higher. The flip side of this is more equity in the future to pay down mortgages.
Any thoughts?
Cheers,
Tom
What LVR to folks use when establishing whether a prospective IP is cashflow positive? Using an LVR of 110% as part of an aggressive strategy has a very different outcome to one of 80% as part of a more conservative strategy.
A recent discussion agreed that the most important figure when accessing a deal was pre-tax cash flow. If one is to leave the rat race obviously this figure needs to be in the black. At what stage it becomes black depends on the individual strategy. Using an accelerated no money down strategy means initial costs are much higher. The flip side of this is more equity in the future to pay down mortgages.
Any thoughts?
Cheers,
Tom
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