Equity Question

Do you pull the equity out of a L/O during closing? Are most mortgages for L/O interest only? What happens to the equity if the tenant decides to buy and there is no equity is this a big deal?

Comments(2)

  • perfecto18th October, 2004

    bump

  • rajwarrior22nd October, 2004

    You'll probably have to clarify your questions a bit since they are not clear at all as to what you are asking. Not even sure if you're talking about buying or selling.

    Do you pull the equity out of a L/O during closing?
    Too vague to answer. There is no "closing" with a L/O, leastways, where the property changes ownership. There is no equity at the time to pull out.

    Are most mortgages for L/O interest only?
    The mortgage will be whatever the owner of the property has in place, so it could be interest only, interest and principle, or no mortgage at all.

    What happens to the equity if the tenant decides to buy and there is no equity is this a big deal?
    Again, really too vague. However, you'd know at the start of the L/O if there was any equity or not in the deal. The option price determines the purchase price down the road. If there is no equity, then the investor is not making any money, so yes, I'd say it was a "big deal." Again, though, I don't really understand the question as posed.

    Roger

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