Hi, Stacey & Fellow PINK-ies!
First, I want to congratulate Stacey on her great idea for a private group post for women DG-ers and to say 'Thank you!'
My questions are about equity.
Excuse my ignorance, but I'm not understanding the weight home equity plays in the equation. (I may have missed a chapter...LOL).
I hear all of this talk & reference to 'how much equity does the property have?'
but I'm not exactly sure how it fits into the equation...
Would someone kindly give me a brief understanding of why it so important in some purchases please?
Is this only considered when the seller has an older property and the buyer will take over payments?
Or does it carry weight when negotiating the offer, and why?
Please clear this up for me. ~Thank you!
PS. Any ladies with small multi-family [duplex/4-plex] acquisition experience?
Could use some advice there as well. What income proof do you request from the seller and at which point? Is it standard to ask for their paperwork in the pre-offering stage? I'm looking at several properties and I'd like to know how this works. ~Thank you!
Who is Dean Graziosi?
Are People Actually Successful?
Does Dean Practice What He Preaches?
What Deals Are The Students Doing Right Now?
Equity Comes in All Shapes
Equity Comes in All Shapes and Sizes. Equity can mean different things based on the situation. One form of equity, as you have stated, is when someone may own a property for a long time and they may have equity in the property based on paying down the mortgage.
This means, the difference between what the property is worth compared to what is owed on the property. For example, someone may have a current mortgage outstanding on there property for $80K, the home might be worth $100K in today's market. Thus, what the home is worth $100K minus what is owed $80K gives you $20K in equity.
Another way to look at equity is if I can purchase a home and get it under contract for say $60k and the home needs $10K in repairs and updating. Once the home is repaired and updated it has an anticipated after repaired value (ARV) of say $95K. The equity in this example would be the $95K (ARV)- $60K(purchase price) - $10K (repairs) = $25K of equity.
In summary, equity of any deal can be viewed as potential profit of what someone might get when they acquire a property. Always take what the property might be worth (Based on comps) and subtract what would be paid to get the property. When a property is worth more than you have into it, that is viewed as equity. I hope this helps. Carpe Diem! :0)
Ready to do Deals and Yes I face Challenges
Hi Stacey,
Great idea to do this blog. I had started investing last year, but became ill, and I was sick for over a year.
Now, I am back, and just got my website up and running and working on getting 50 buyers. I am following Dean's Blueprint and working on week 2. I anticipate in doing deals within the next 2 weeks. I am excited and nervous as well.
I am the sole breadwinner in my home and I do everything, and I am a caregiver for my Mother. I am stressed many days, but I look at all my Why's as to my reasons for doing this business as a real estate investor, and I am determined to succeed.
Check out my websites at: http://doughertyvirtual.com and http://doughertyvirtual.biz
Once again, thank you!!!
Sincerely yours,
Frances Dougherty
YES
You do look nice in Pink I should say, the Pink Panther Real Estate Investors!
Cher
Scared out of my mind!
Hello Ladies,
My name is Suzanne Rodgers. Just wanted to thank you for starting this blog as I agree with Stacey's blog about how important it is to have a blog that other women can support each other, share experiences and ask questions. I currently have 3 potential deals in the works and I am feeling scared, confused, nervous, excited and over my head. I keep running into obstacles one after another from trying to get a cashier's cheque, to dealing with banks, getting conflicted answers from different people regarding deals, computer difficulties and so on. I feel like I am spinning my wheels and not going anywhere. I often feel alone in this journey as I have very little support from family and friends.they are convinced I have "lost my mind". LOL. It is helpful to know that there are other women successfully doing this. Thank you.