Los Angeles, CA 路 Member since 2019 路 97 posts 路 38 votes
So how much equity should a potential seller have on their property in order for them to be able to sell their home. Anybody have a neat script you can share ?
@Cirilo Villar If there鈥檚 no equity in the property for a flip there you need to run number as a rental and buy it as a lease option or subject to and sell the contract to investors using those strategies.
Anxious to read replies as I am not experienced to reply. I would say if you can fashion a legal contract that gets you around the 100% equity, the rehabber would need to take on the debt by working the costs into his numbers.
@Cirilo Villar If there鈥檚 no equity in the property for a flip there you need to run number as a rental and buy it as a lease option or subject to and sell the contract to investors using those strategies.
@Cirilo Villar Equity is the difference between what the home could sell for right now and the total debt on the property. You dont need 100% equity at all, most properties that you will encounter as a wholesaler are going to have some debt. There isnt a magic percentage where if its X% equity then its a deal but if its 1% more than that it isnt. It really depends on the situation and the exit strategy of your end buyer. For example, I had a house last year that technically had no equity because the seller had done a loan modification and there was a 50k balloon payment due after the maturity date of his loan. But his loan terms were fantastic, his PITI was $855 and homes in the neighborhood were renting for more than twice that amount. So I wholesaled the deal to an investor who took the property sub2 and is going to rent it out. Thats an example of making money on a property with no equity at all.
@Cirilo Villar Equity is the difference between what the home could sell for right now and the total debt on the property. You dont need 100% equity at all, most properties that you will encounter as a wholesaler are going to have some debt. There isnt a magic percentage where if its X% equity then its a deal but if its 1% more than that it isnt. It really depends on the situation and the exit strategy of your end buyer. For example, I had a house last year that technically had no equity because the seller had done a loan modification and there was a 50k balloon payment due after the maturity date of his loan. But his loan terms were fantastic, his PITI was $855 and homes in the neighborhood were renting for more than twice that amount. So I wholesaled the deal to an investor who took the property sub2 and is going to rent it out. Thats an example of making money on a property with no equity at all.
what is "sub2" and how did you learn these technicallities what books do you recommend I moved to a potential market but I feel I don't know enough