I am reading steve’s book on the Mapping project but there is one bit- some way back for me now that I didn’t quite get.
When talking about freeing up profit there is the example of the property that increased in value from $40,000 to $80,000. Sell and buy two is better- OK theory is all fine so far no problem but in the example showing all the figures I cannot for the life of me understand how, in the example where you keep the $80,000 property, you end up with a mortgage of $96,000- if you are only buying one property worth $40,000 you would only need to borrow $32,000 not increase your original loan by a further $32,000 as well.
Can someone tell me if I missed a salient point in the finances.ekkhan
Hi there,
The mortgage of $96k comes from:
1a. Value of house one: $80,000
1b. Loan (80%) = $64,000**Note $40,000 house increased in value to $80,000**
2a. Value of house two: $40,000
2b. Loan (80%) = $32,000**Purchased by refinancing equity of house 1 back up to 80% of $80,000**
Total Loan: $96,000
Hope this helps.
Bye,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
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