Updated almost 3 years ago on . Most recent reply
Debt to equity ratio
What are y'all comfortable with?
I think anything less than 1:1 (100k debt, 100k equity)is conservitive, and 5:1 (500k debt 100k equity) is ok as long as they are good cash flowing properties,
Anything higher than 5:1 would involve cash out refi's and lending LTV greater than the norm of 20% down.
Do you think worst case, and make sure you can pay loans in an economic downturn, or have so many months of cash? I know it is often about goals. My goals are to grow my portfolio, and quit my job. That might mean taking more debt early on instead of slowly growing the business with more cash. It also might be easier to get into a larger loan with the double income that I have now.