Sorry I’m sorry but I still don’t get what equity is. I’ve been interning for a big investor in Las Vegas and I’m motivated by what real estate can do for me and my future. Just a question that I’m to embarrassed to ask. I need a simplified version “for dummies” unfortunately. I’m grateful for any and all questions!
I could be wrong but this is what it means to me
Value of property - what I owe which usually is zero = equity
Alfredo just bought a house for $100,000 with a bank loan of $80,000 and a cash down payment of $20,000.
Alfredo has $20,000 in equity in the house.
1 year later the value of the house (if Alfredo wanted to sell it --based on comps-- is $120,000).
Alfredo now has $40,000 in equity. $20,000 cash + $20,000 rise in value.
2 years later the Real Estate market drops and the house value (based on comps is $80,000).
Alfredo now has Zero Equity in the house (but he can still rent it out).
Hope that helps.
Appraised amount minus the loan amount equals the EQUITY.
You get an appraisal on your home and it appraises for $850,000
The loan amount on your home is $350,000
$850,000 minus $350,000 equals $500,000 equity
I hope that helps
@Scott Mac thank you very much!
@Damaso Bautista thank you! Very much appreciated!
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