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VTB

Kewal

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Joined
May 22, 2010
Messages
6
I am looking at a deal that may have vendor financing. I would like hear from those who have used this option. I am newbie. Give me some pro and cons. Thanks
 
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.
 
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