Hi
i’ve just read steve’s book as well as a book on negative gearing. Positive gearing is by far more attractive.i have a question: steve’s 11 second solution.
does this formula work only in cases where a
deposit is paid on an investment property, or is it applicable where equity is used instead of a deposit?Hi pekay,
If you have a specific property in mind I would sit down and “do the math” if I were you. The 11 sec. solution is just that – a quick way to determine whether the property MIGHT generate a +ive cashflow. The only way to find out for sure is to write up a detailed budget for the property. (Or buy the thing)I dare say this solution can work, deposit or no deposit, as the equation does not take a deposit into account. If, however, you are using equity rather than cash down, your cash-on-cash return (COCR) will be higher as you are using less, or none of your own money to purchase the property.
Also, remember that Steve’s book was written a few years ago now and there are FAR FEWER properties that fit the 11 sec. solution.
All the best with whatever strategy it is that you choose.
Spank
Age doesn’t negate effort – you can never be too young or too old.
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