All Topics / General Property / Creating equity through positive cash flow property’s

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  • Profile photo of Lloyd2012Lloyd2012
    Member
    @lloyd2012
    Join Date: 2010
    Post Count: 4

    Hi, I am halfway through reading Steve's book so may be jumping the gun, but having read all the funadmentals of positive cashflow property, can someone tell me how it is that you create enough equity in these properties to borrow more to buy more? Given that in some circumstances the positive cashflow property might be in a low capital growth area. Surely bringing in $50 net cashflow a week isn't going to create a heck of alot of equity with the bank?

    Profile photo of CatalystCatalyst
    Participant
    @catalyst
    Join Date: 2008
    Post Count: 1,404

    You seem to be confusing terms. Equity is how much you have after paying the loan. Eg a house worth $350K with a $300K loan has equity of $50K.

    When you talk cashflow you are talking borrowing power.  Of course if your properties are CF+ the bank will lend you more than if they were CF-.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    https://www.propertyinvesting.com/forums/property-investing/help-needed/4333346?#comment-217307

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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