Are there any situations under which you would buy a property with a negative cashflow?
May be if you know the rents will go up in the future... Then how long would you be willing to wait till the rents catches up with the mortgage? One year? 2 years?
(If lets say you would buy a property with the negative cash flow but you dont worry about the cash flow, because you will be flipping the property, what margin would you need in order to buy it if you know you cant rent it out as a back out strategy)...
Thank you!
I’ve made to use a scientific/financial term, I’ve made a “boatload” of money on a property with negative $80-/mo cash flow. And not even the easy way where you buy for way under market. (Who wouldn’t buy a negative cash flow property for $100m off?)
I go by actual profit. The principle portion was $1500+ the first month. So I was $700/mo to the good and only getting better. Add a couple hundred a month in rent increases every year and 10 years later I have a paid off $700k property. I put $100k down, an average of say $400/mo or $5k/yr. For 10 years. So another $50k. For $150k I have a paid off $700k property.
All of this was beyond tax free. I paid negative taxes after depreciation until the 7th or 8th year. Your wealth will not come from cash flow. Until a home is paid off all the real wealth will come from appreciation. (Especially when calculated not against it’s value but your cash in the deal.) I’ve said if before and I’ll say it again. If you NEED a property to cash flow $200 to afford it, you’re not ready for real estate. You just aren’t. One major repair, one long vacancy and all your “needed” cash flow is gone.
Treat these rental properties as investments like your retirement accounts. They don’t cash flow ever. But you’re still told by financial experts/advisors to stick hundreds of thousand in to them and pray for appreciation.
Cash flow is only one TINY way rentals make you money. I don’t know why there are only cash flow fanatics. No depreciation, loan pay down, tax advantage fanatics.
Good luck whatever you do but assume most people telling you not to do something haven’t done it themselves. It’s like when your friend says “Ferraris break down all the time…”. When you ask how many they’ve owned, how many their friends own, and how many they’ve repaired, or even seen broken down. You hear a sad little “zero”.
@Mary Jay generally, I'd only consider it if I knew that I could force cashflow.
For instance, years ago I bought a property that would have been negative cashflow as a rental. I lived in it, and while living there, I built an ADU and did some other improvements. I knew that the ADU and improvements would make it cashflow when I eventually moved out. After a couple years, I moved out, and (as expected) the property cashflowed very well right out of the gate.
There's a BIG difference between forcing cashflow and sitting around hoping that rents will eventually increase enough to create cashflow. I'm not interested in speculation or being dependent on the ups and downs of the rental market (which I can't control), but if I can force cashflow through value add strategies, then I'll consider buying the property.
@Mary Jay Real Estate Investing is a long-term investment. You really have to calculate what your return is over the life of the investment. If you only plan to hold it for a short time, I would never go with a negative cash-flowing property. But if you plan to hold it for 10, 20, 30 or more years, just project what you think you will be making. If you buy a property that is losing $100/month, that's $1,200/year or $12,000 over 10 years. If you look at the median home price over a 10-year period do you ever see where it dropped $12,000 over 10 years? Additionally, I don't think rents over a 10-year period have ever gone down, so your $100/month loss is probably less than that.
However, is that the best use of your money? Are you getting the best return you can get with your money? Generally I feel you could probably be doing better with your money and get a better return, but I don't know where you are investing.
Let me tell you a story of mine where I had a negative cash-flowing property. When I bought the property it was cash-flow positive, but the crash of 2008 hit and I was underwater on my loan and rent dropped so much I was negative cash-flow. Because I was underwater, and had the income to support paying the extra, I kept the property. I still have it today and provides almost more cash-flow than any other property I have. It's gone back up in value so much I pulled an equity line of credit from it that I use to fund repairs on my BRRRRs or flips. I looked at the property as a long-term investment and have done very well with it.
You always buy the best deal the market will allow you. Ideally you buy with some cash flow, if necessary with more downpayment to get to a 1.2 DSCR. It's all about the right balance. If you have a strong W2, you'll be better off buying a 350k property with slightly negative cash flow than a 150k property that meets the 1% "rule".
With the latter, you might look at 6k in cash flow, but also a new roof and new windows and you still have a 60 year old kitchen and bath. With the 350k property just your principal pay down alone provides double digit ROI, let appreciation help with the rest. And then compare after 10 years.
Cash flow has never been the real point of RE investing. Another Milwaukee investor asked me at a workshop on REI strategy what he did wrong. He is in his 60s now, has a portfolio in almost 50 doors in a cheap part of the city, which he managed himself for the last 30 years, he does his own handyman work to save money, his tenants drive him nuts and after 30 years he has almost no equity to show for. He had to take out financing to pay for larger capex items.
@Steve K. - well said!
Thank you sir! Well said!
You're not a property collector, you're supposed to be a REI. That means you don't just buy the best deals you can make at any time. You only buy deals that work,...without rationalizing them. If a deal doesn't work to your pre-established needs, then don't buy it.
Great points made by everyone. I agree with Steve, Trevor and Matthew. I currently have 3 properties that negative cash flow. The first one is more my own doing, a Bay Area SFH that I rent out to family members so they are getting a great deal. I acquired this pre-2013 so not in this current market. Long story but if I get roommates in (they're open to this), I would be cash flowing $1500+ a month. My only truly cashing flowing property is a multi-unit in Bay Area, co-owned, acquired pre-2013. There's the CA appreciation at work.
The other two are Class C SFH in Indianapolis I closed on in 2023. On paper the SFH#1 was supposed to be cash flow at 6.99% interest rate but I've been losing $300 to $700 (the high amount so far) a month from repairs called in by the tenant. Right now it seems to have stabilized so I got a full month rent (minus PM fee). The second one is at 7.625%, not rented out yet but at best my rent will equal my monthly payment PITI. I was planning on appreciation and raising rents and re-financing later. I think I underwrote these deals incorrectly. All bought off the MLS - I don't have the time and stress level to buy off market and do BRRRR from 2000 miles away.
If I had to do it over again, I would have bought in Nevada or Arizona a year or two ago, not Indiana and if I was -$200 as a long term rental, using 20% down, would be ok with that and gone for appreciation. Property tax rates are lower in NV and AZ. My first Indiana property, Class A owned for 10 years, is positive CF but not for long with the property tax increases (17% the last assessment) and I'm in market rent range. Great suburb with low crime and excellent schools so I'm holding on for appreciation.
Might be doing a 1031 exchange with the Indy properties in the next couple of years to a DST (researching this) for less headache. I don't see how anyone is buying anything in 2023 or 2024 with positive CF now at 7% interest rates. If they are, let me know.
There are still cash flow opportunities it's the entry capital that has changed. Buy all cash and it cash flows right? There seems to be this fantasy on BP that has been peddled that if you you buy cash flowing properties with 5% down you can retire in 2 years from your W2 job. Since interest rates went up if a deal can break even or even cash flow $100 per month in an equity market that can be a good strategy right now for a 5-10 year exit. If rates go down refinance. In the Reno, NV market we are selling new builds to investors because the builders are offering lower interest rates and properties are cash flowing and they have already gained 30k in equity. That's a lot of in 2 months. It depends on your goals and strategy but there are still deals for those that want to build wealth through equity and have a lower cash flow expectation.
Great points made by everyone. I agree with Steve, Trevor and Matthew. I currently have 3 properties that negative cash flow. The first one is more my own doing, a Bay Area SFH that I rent out to family members so they are getting a great deal. I acquired this pre-2013 so not in this current market. Long story but if I get roommates in (they're open to this), I would be cash flowing $1500+ a month. My only truly cashing flowing property is a multi-unit in Bay Area, co-owned, acquired pre-2013. There's the CA appreciation at work.
The other two are Class C SFH in Indianapolis I closed on in 2023. On paper the SFH#1 was supposed to be cash flow at 6.99% interest rate but I've been losing $300 to $700 (the high amount so far) a month from repairs called in by the tenant. Right now it seems to have stabilized so I got a full month rent (minus PM fee). The second one is at 7.625%, not rented out yet but at best my rent will equal my monthly payment PITI. I was planning on appreciation and raising rents and re-financing later. I think I underwrote these deals incorrectly. All bought off the MLS - I don't have the time and stress level to buy off market and do BRRRR from 2000 miles away.
If I had to do it over again, I would have bought in Nevada or Arizona a year or two ago, not Indiana and if I was -$200 as a long term rental, using 20% down, would be ok with that and gone for appreciation. Property tax rates are lower in NV and AZ. My first Indiana property, Class A owned for 10 years, is positive CF but not for long with the property tax increases (17% the last assessment) and I'm in market rent range. Great suburb with low crime and excellent schools so I'm holding on for appreciation.
Might be doing a 1031 exchange with the Indy properties in the next couple of years to a DST (researching this) for less headache. I don't see how anyone is buying anything in 2023 or 2024 with positive CF now at 7% interest rates. If they are, let me know.
Becca F, This is a long term plan. Cash flow is not the plan. The plan is long term appreciation.
Great points made by everyone. I agree with Steve, Trevor and Matthew. I currently have 3 properties that negative cash flow. The first one is more my own doing, a Bay Area SFH that I rent out to family members so they are getting a great deal. I acquired this pre-2013 so not in this current market. Long story but if I get roommates in (they're open to this), I would be cash flowing $1500+ a month. My only truly cashing flowing property is a multi-unit in Bay Area, co-owned, acquired pre-2013. There's the CA appreciation at work.
The other two are Class C SFH in Indianapolis I closed on in 2023. On paper the SFH#1 was supposed to be cash flow at 6.99% interest rate but I've been losing $300 to $700 (the high amount so far) a month from repairs called in by the tenant. Right now it seems to have stabilized so I got a full month rent (minus PM fee). The second one is at 7.625%, not rented out yet but at best my rent will equal my monthly payment PITI. I was planning on appreciation and raising rents and re-financing later. I think I underwrote these deals incorrectly. All bought off the MLS - I don't have the time and stress level to buy off market and do BRRRR from 2000 miles away.
If I had to do it over again, I would have bought in Nevada or Arizona a year or two ago, not Indiana and if I was -$200 as a long term rental, using 20% down, would be ok with that and gone for appreciation. Property tax rates are lower in NV and AZ. My first Indiana property, Class A owned for 10 years, is positive CF but not for long with the property tax increases (17% the last assessment) and I'm in market rent range. Great suburb with low crime and excellent schools so I'm holding on for appreciation.
Might be doing a 1031 exchange with the Indy properties in the next couple of years to a DST (researching this) for less headache. I don't see how anyone is buying anything in 2023 or 2024 with positive CF now at 7% interest rates. If they are, let me know.
I dislike these long threads within a thread. To clarify, I lived in the Bay Area SFH and the Class A Indy suburb SFH. They weren't intended initially to be a investment properties. I left CA and moved to Indiana and returned (long story). The Bay Area SFH has a reasonable property tax that goes up a max of 2% a year (Prop 13 in CA) and lots of equity - I didn't rent it out for 10 years to family members, only been rented out to them for less than 2 years.
I kept the Class A Indy home since it's appreciated quite a bit for the Midwest and have great tenants with 3.875% interest rate (still positive CF but the amount goes down every year). Rent is in market rate range, maybe slightly under, don't want to scare off tenant with huge rent increases.
With Indy Class C#1 it was supposed to cash flow $176 at 6.99%, so just barely. I underwrote without capital expenses (for first 5 years) since it was renovated (by the seller not me). Indy Class C#2 well I ask myself that I everyday, should have just left money in HYSA. I listened to a lot of RE agents and investors to buy before there's more competition if rates decrease and I could refinance later and raise rents. I learned a huge lesson here - don't buy "renovated" 100 year old inexpensive homes, especially OOS and sometimes it is just better not to do a deal.
Never,...ever.
I see people who invest in linear markets say "Never"... At the same time, the rents in the linear markets dont grow very well, plus the price of the RE is linear... I am not sure how people make money with all breaks/fixing/non paying tenants... Untill the property is paid off... Of course if a person can fix everything himself, then it probably is easier
You always talk about strategies, and they are all smart... but Ive never heard you give an example of your deal. May be I just overlooked...Can you please give an example of your buy and hold (like how much did you buy for, what is your cash flow on it when you bought it, when did you buy it, at what interest, what are the rents on it back then and now, what is your cashflow now on it)...
Sort of like what Bill did earlier, he gave us an example of his scenario...
I own in linear, hybrid and cyclical markets... I can tell they all are very different. I personally prefer cyclical or hybrids because with linear there is not much of cashflow and not much of appreciation...But would be interesting to hear your deal
If you could provide an example of a recent deal you made with a positive cash flow that would be great. Something like Bill Brand does... Something like: bought in 2024 for such price, interest is such and such, rent is such and such... If you provide numbers for a recent deal (2024 or the end of 2023) that would be helpful! Thank you
Never,...ever.
I see people who invest in linear markets say "Never"... At the same time, the rents in the linear markets dont grow very well, plus the price of the RE is linear... I am not sure how people make money with all breaks/fixing/non paying tenants... Untill the property is paid off... Of course if a person can fix everything himself, then it probably is easier
You always talk about strategies, and they are all smart... but Ive never heard you give an example of your deal. May be I just overlooked...Can you please give an example of your buy and hold (like how much did you buy for, what is your cash flow on it when you bought it, when did you buy it, at what interest, what are the rents on it back then and now, what is your cashflow now on it)...
Sort of like what Bill did earlier, he gave us an example of his scenario...
I own in linear, hybrid and cyclical markets... I can tell they all are very different. I personally prefer cyclical or hybrids because with linear there is not much of cashflow and not much of appreciation...But would be interesting to hear your deal
If you could provide an example of a recent deal you made with a positive cash flow that would be great. Something like Bill Brand does... Something like: bought in 2024 for such price, interest is such and such, rent is such and such... If you provide numbers for a recent deal (2024 or the end of 2023) that would be helpful! Thank you
I've given many, many examples of deals (there's an echo in here) over the years. Every example I give to describe a strategy or REI principle, I use numbers to show how and why,...and they all come from real deals.
However, I'll give you an example of one we just got (I have a partner) in a western suburb of Detroit. Like I said, I have a partner, so I'm not going to give you an exact location in order to protect my partner. So please don't ask:
Buy using seller financing - $120k
DP (10%) - $12k
SF - $108k
Terms (7%/25 yrs) Pmt - $763/m
T/I - $325/m
Rent $1600/m
CF - $512/m
That means we sill recover our cost in less than 2 years.
Bought about $15k under Comps because seller had tenant in and wouldn't CF enough at full price using traditional financing. With interest added to the sale price, seller will be making almost $230k, and will have about the same CF they had when they owned it...without having to deal with the tenants. They have a lien on the property if we ever defaulted.
Never,...ever.
I see people who invest in linear markets say "Never"... At the same time, the rents in the linear markets dont grow very well, plus the price of the RE is linear... I am not sure how people make money with all breaks/fixing/non paying tenants... Untill the property is paid off... Of course if a person can fix everything himself, then it probably is easier
You always talk about strategies, and they are all smart... but Ive never heard you give an example of your deal. May be I just overlooked...Can you please give an example of your buy and hold (like how much did you buy for, what is your cash flow on it when you bought it, when did you buy it, at what interest, what are the rents on it back then and now, what is your cashflow now on it)...
Sort of like what Bill did earlier, he gave us an example of his scenario...
I own in linear, hybrid and cyclical markets... I can tell they all are very different. I personally prefer cyclical or hybrids because with linear there is not much of cashflow and not much of appreciation...But would be interesting to hear your deal
If you could provide an example of a recent deal you made with a positive cash flow that would be great. Something like Bill Brand does... Something like: bought in 2024 for such price, interest is such and such, rent is such and such... If you provide numbers for a recent deal (2024 or the end of 2023) that would be helpful! Thank you
I've given many, many examples of deals (there's an echo in here) over the years. Every example I give to describe a strategy or REI principle, I use numbers to show how and why,...and they all come from real deals.
However, I'll give you an example of one we just got (I have a partner) in a western suburb of Detroit. Like I said, I have a partner, so I'm not going to give you an exact location in order to protect my partner. So please don't ask:
Buy using seller financing - $120k
DP (10%) - $12k
SF - $108k
Terms (7%/25 yrs) Pmt - $763/m
T/I - $325/m
Rent $1600/m
CF - $512/m
That means we sill recover our cost in less than 2 years.
Bought about $15k under Comps because seller had tenant in and wouldn't CF enough at full price using traditional financing. With interest added to the sale price, seller will be making almost $230k, and will have about the same CF they had when they owned it...without having to deal with the tenants. They have a lien on the property if we ever defaulted.
Thank you!
Looks like still good cashflow is available, even with these interest rates...
How much do you calculate for capex and tenant turnover?
Never,...ever.
I see people who invest in linear markets say "Never"... At the same time, the rents in the linear markets dont grow very well, plus the price of the RE is linear... I am not sure how people make money with all breaks/fixing/non paying tenants... Untill the property is paid off... Of course if a person can fix everything himself, then it probably is easier
You always talk about strategies, and they are all smart... but Ive never heard you give an example of your deal. May be I just overlooked...Can you please give an example of your buy and hold (like how much did you buy for, what is your cash flow on it when you bought it, when did you buy it, at what interest, what are the rents on it back then and now, what is your cashflow now on it)...
Sort of like what Bill did earlier, he gave us an example of his scenario...
I own in linear, hybrid and cyclical markets... I can tell they all are very different. I personally prefer cyclical or hybrids because with linear there is not much of cashflow and not much of appreciation...But would be interesting to hear your deal
If you could provide an example of a recent deal you made with a positive cash flow that would be great. Something like Bill Brand does... Something like: bought in 2024 for such price, interest is such and such, rent is such and such... If you provide numbers for a recent deal (2024 or the end of 2023) that would be helpful! Thank you
I've given many, many examples of deals (there's an echo in here) over the years. Every example I give to describe a strategy or REI principle, I use numbers to show how and why,...and they all come from real deals.
However, I'll give you an example of one we just got (I have a partner) in a western suburb of Detroit. Like I said, I have a partner, so I'm not going to give you an exact location in order to protect my partner. So please don't ask:
Buy using seller financing - $120k
DP (10%) - $12k
SF - $108k
Terms (7%/25 yrs) Pmt - $763/m
T/I - $325/m
Rent $1600/m
CF - $512/m
That means we sill recover our cost in less than 2 years.
Bought about $15k under Comps because seller had tenant in and wouldn't CF enough at full price using traditional financing. With interest added to the sale price, seller will be making almost $230k, and will have about the same CF they had when they owned it...without having to deal with the tenants. They have a lien on the property if we ever defaulted.
Thank you!
Looks like still good cashflow is available, even with these interest rates...
How much do you calculate for capex and tenant turnover?
Never,...ever.
I see people who invest in linear markets say "Never"... At the same time, the rents in the linear markets dont grow very well, plus the price of the RE is linear... I am not sure how people make money with all breaks/fixing/non paying tenants... Untill the property is paid off... Of course if a person can fix everything himself, then it probably is easier
You always talk about strategies, and they are all smart... but Ive never heard you give an example of your deal. May be I just overlooked...Can you please give an example of your buy and hold (like how much did you buy for, what is your cash flow on it when you bought it, when did you buy it, at what interest, what are the rents on it back then and now, what is your cashflow now on it)...
Sort of like what Bill did earlier, he gave us an example of his scenario...
I own in linear, hybrid and cyclical markets... I can tell they all are very different. I personally prefer cyclical or hybrids because with linear there is not much of cashflow and not much of appreciation...But would be interesting to hear your deal
If you could provide an example of a recent deal you made with a positive cash flow that would be great. Something like Bill Brand does... Something like: bought in 2024 for such price, interest is such and such, rent is such and such... If you provide numbers for a recent deal (2024 or the end of 2023) that would be helpful! Thank you
I've given many, many examples of deals (there's an echo in here) over the years. Every example I give to describe a strategy or REI principle, I use numbers to show how and why,...and they all come from real deals.
However, I'll give you an example of one we just got (I have a partner) in a western suburb of Detroit. Like I said, I have a partner, so I'm not going to give you an exact location in order to protect my partner. So please don't ask:
Buy using seller financing - $120k
DP (10%) - $12k
SF - $108k
Terms (7%/25 yrs) Pmt - $763/m
T/I - $325/m
Rent $1600/m
CF - $512/m
That means we sill recover our cost in less than 2 years.
Bought about $15k under Comps because seller had tenant in and wouldn't CF enough at full price using traditional financing. With interest added to the sale price, seller will be making almost $230k, and will have about the same CF they had when they owned it...without having to deal with the tenants. They have a lien on the property if we ever defaulted.
Thank you!
Looks like still good cashflow is available, even with these interest rates...
How much do you calculate for capex and tenant turnover?
Thank you! As far as your expenses when a tenant moves out, how much would u say you spend? Most of my tenants were clean and after they moved out I had to only pay a cleaning lady $400 to clean. That is after 18 years of investing in RE.. But the last couple of tenants (in 2023), after they moved out I had to change the carpets, paint, there were dirty hands imprints on the walls, it was a disaster! I spent 10k and 15 k on those 2 properties to make them rentable again...
Never,...ever.
I see people who invest in linear markets say "Never"... At the same time, the rents in the linear markets dont grow very well, plus the price of the RE is linear... I am not sure how people make money with all breaks/fixing/non paying tenants... Untill the property is paid off... Of course if a person can fix everything himself, then it probably is easier
You always talk about strategies, and they are all smart... but Ive never heard you give an example of your deal. May be I just overlooked...Can you please give an example of your buy and hold (like how much did you buy for, what is your cash flow on it when you bought it, when did you buy it, at what interest, what are the rents on it back then and now, what is your cashflow now on it)...
Sort of like what Bill did earlier, he gave us an example of his scenario...
I own in linear, hybrid and cyclical markets... I can tell they all are very different. I personally prefer cyclical or hybrids because with linear there is not much of cashflow and not much of appreciation...But would be interesting to hear your deal
If you could provide an example of a recent deal you made with a positive cash flow that would be great. Something like Bill Brand does... Something like: bought in 2024 for such price, interest is such and such, rent is such and such... If you provide numbers for a recent deal (2024 or the end of 2023) that would be helpful! Thank you
I've given many, many examples of deals (there's an echo in here) over the years. Every example I give to describe a strategy or REI principle, I use numbers to show how and why,...and they all come from real deals.
However, I'll give you an example of one we just got (I have a partner) in a western suburb of Detroit. Like I said, I have a partner, so I'm not going to give you an exact location in order to protect my partner. So please don't ask:
Buy using seller financing - $120k
DP (10%) - $12k
SF - $108k
Terms (7%/25 yrs) Pmt - $763/m
T/I - $325/m
Rent $1600/m
CF - $512/m
That means we sill recover our cost in less than 2 years.
Bought about $15k under Comps because seller had tenant in and wouldn't CF enough at full price using traditional financing. With interest added to the sale price, seller will be making almost $230k, and will have about the same CF they had when they owned it...without having to deal with the tenants. They have a lien on the property if we ever defaulted.
Thank you!
Looks like still good cashflow is available, even with these interest rates...
How much do you calculate for capex and tenant turnover?
Thank you! As far as your expenses when a tenant moves out, how much would u say you spend? Most of my tenants were clean and after they moved out I had to only pay a cleaning lady $400 to clean. That is after 18 years of investing in RE.. But the last couple of tenants (in 2023), after they moved out I had to change the carpets, paint, there were dirty hands imprints on the walls, it was a disaster! I spent 10k and 15 k on those 2 properties to make them rentable again...
Hi Mary.
Glendale probably had 8 -10 % increase in value the past year.
San Tan Valley, Queen Creek, Ans most of Mesa had 14-20% Increase.
So Appreciation is the reason.
who cares if y
Sorry accidentally hit wrong button.
Who cares if you're $200 negative if you're property Value Went up $1400 a month.
Sorry accidentally hit wrong button.
Who cares if you're $200 negative if you're property Value Went up $1400 a month.
Who cares if you're $200 negative if you're property Value Went up $1400 a month.
if your property appreciates $1400.00 a month versus negative rent of $200 .
Hopefully Joe this helps
Who cares if you're $200 negative if you're property Value Went up $1400 a month.
if your property appreciates $1400.00 a month versus negative rent of $200 .
Hopefully Joe this helps
Making over $1000 a month in appreciation.
Why even sale it.??
In Areas of Phoenix .
Most property are doubling in price in 4 years.
Making over $1000 a month in appreciation.
Why even sale it.??
IF you don't sell it, then you are paying 200/month for your property to gain 1000/month,...not you. You own the property, but the property owns the equity,...until you convert it to cash.
The property is actually losing money as it gains equity. the value of the equity is what that equity is buying. As your equity grows, the buying power of that equity goes down. When you buy a property, in this case, with 30% down, it means on a 150k property you paid 45k for that property. You're buying the initial equity. If that property went up 35k in PV (240k), the equity also went up 35k, but its actual value went down.
That 45k you paid for the property was buying a PV that was 3.3 times what you paid for it. When it went up 35k to 185k in PV, that equity went up 35k too now equal to 80k. The new equity of 80k is now buying you a property worth only 2.3/dollar of equity....and, it's still not your money.
Sell the property and it becomes your money, and if you insist on paying 30% (DP) of the PV, you are now buying a property worth $242k+