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Equity to debt ratio for real estate investing
Posted on 4/21/18 at 5:33 pm
Posted on 4/21/18 at 5:33 pm
What are y'all comfortable with, how do y'all mitigate risk? I think anything less than 1:1 is conservitive. 1:4 is ok as long as they are good cashflowing property, but am unsure.
Do you think worst case and make sure you can pay loans in an economic downturn, or have so many months of cash?
Do you think worst case and make sure you can pay loans in an economic downturn, or have so many months of cash?
2
Posted on 4/21/18 at 6:07 pm to Rust Cohle
Good questions.
The more you put down, the better the cash flow.
And yes, you should have some cash on the side for vacancies and fixups.
I use a line of credit for fixups at times.
The more you put down, the better the cash flow.
And yes, you should have some cash on the side for vacancies and fixups.
I use a line of credit for fixups at times.
Posted on 4/22/18 at 5:51 pm to ItzMe1972
I guess 5 is the norm, that's 20% down payment lending. Anything higher would involve cash out refi's, and lending with a lower down payment.
Posted on 4/22/18 at 10:18 pm to ItzMe1972
As far as doing conventional loans you must have at least 6 months cash reserves for each property on property 5 on upward. As well as 25% down. Or else they won’t lend. 20% for first 4. That’s on NOO residential loans.
Posted on 4/22/18 at 10:20 pm to Rust Cohle
That’s why you have reserves but also folllow the checklist I listed in my RE thread prior to investing to mitigate risk. It definitely helps if you can follow as much of it as possible.
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