Question : how do you determine if and how much equity there is in a real estate property?
if i am purchasing wholesale properties for resale to investors to fix and sale. how do i determine if and how much equity is in the property?
- asked by steven h
All Answers:
Answer #1
Equity is the difference between the value of theproperty and how much you owe on it.
- answered by countryguyhfc
Answer #2
Take how much the home is worth (from anappraisal) subtract the amount of mortgage on theproperty.
- answered by Kristy
Answer #3
the difference between what u owe on a propertyand the apprased value is considered the equity ina property. if u pay cash and the unit is worth50,000 u have 50,000 equity, if u mortgaged 25000same house your equity is 25000, if u buy at afire sale and the same house is worth 75000 and umortgage 25000 then u have 50000 worth of equityin a sales transaction, but most lenders want u ondeed for a year before u can refinance and claimthe fire sale equity, however, u can sell it forthe appraised value and if u find a buyer make aquick 25000 because of the appraisal equity in asale.
- answered by donald e
Answer #4
The equity is based on how much is owed on theproperty and it's value. In a purchase the valueis typically based on the sale price but one canalso have it appraised.Quick calculation is todivide the balance into the value, the answer isthe percentage.Another way is to figure out thevalue and divide it by a percentage such as 85% or95% based on what is presumed the lender will lendto take that answer and subtract it from thebalance owed.Example: Value $350,000 / 85% =$297,500... Subtract $297,500 from $220,000(assumed balance owed or being financed) and thedifference being $77,500 is the equity in theproperty.
- answered by Rick Ven
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