VTB
- Thread starter Kewal
- Start date
- Joined
- Aug 26, 2008
- Messages
- 730
Pro:
You need less capital to get into the deal.
You may be able to get the VTB at favourable terms - no interest, no payments, etc.
Using a VTB may allow you to purchase an excellent property that you otherwise could not.
Potentially higher cash-on-cash ROI.
Con:
You're more highly leveraged -> more downside risk.
The deal is potentially more complicated.
Not all lenders will lend on a new a mortgage and a VTB.
Potentially lower cash flow if you have a 1st mortgage plus VTB payments to make.
VTB can be an excellent way to help build your portfolio of quality properties, but don't be swayed into buying a crappy property just because there is favourable financing available.
You need less capital to get into the deal.
You may be able to get the VTB at favourable terms - no interest, no payments, etc.
Using a VTB may allow you to purchase an excellent property that you otherwise could not.
Potentially higher cash-on-cash ROI.
Con:
You're more highly leveraged -> more downside risk.
The deal is potentially more complicated.
Not all lenders will lend on a new a mortgage and a VTB.
Potentially lower cash flow if you have a 1st mortgage plus VTB payments to make.
VTB can be an excellent way to help build your portfolio of quality properties, but don't be swayed into buying a crappy property just because there is favourable financing available.