What Exactly Is Collateral Based Downpayment
If I have property. Can I use that property as collateral for the downpayment of my next property? How does that exactly work? Does that mean that I am not paying the downpayment right away? Am I taking out a loan with the bank, with interest to pay off the downpayment over time using my first property as collateral?
Or should I borrow money off the first property with one lender and use the borrowed money for the downpayment with another lender?
What some of the books are talking about is putting up a property with equity that the seller may use as part of the down payment. Give the seller a mortgage on your property instead of all or part of the purchase price. I did this once and lost both properties. It would be better to borrow against your property and use proceeds as down on other. You have better control if %$%$% happens and you have to decide which property to keep and which one to let go. Just a few thoughts re your question
Good LUCK and HAPPY HOLIDAYS
Hope this helps some
Ted Jr