all cash blog

How much will i need in Ready-cash to purchase an investment Property?

A Vacant Land is up for grabs for about $165,000. I do have a mortgage already with an equity worth about $100,000? what is the best loan so i don’t use my own cash?
A Vacant Land (green-titled plan) is up for grabs for about $165,000. I do have a mortgage already with an equity worth about $100,000? what is the best loan so i don’t use my own cash?

Most lenders won’t consider a raw land investment for less than 20% down and would generally prefer to see 40% to 50% to secure a reasonable rate.

With $100k in equity in another property — presumably your home — you might be able to take out a 2nd mortgage or a home equity line of credit to get enough cash to buy the land. But bear in mind that the market has not bottomed yet and you could quickly find yourself upside down on your home if values continue to fall in your area.

Unless you have a ready buyer for the land at a better price or approved plans for development AND a solid source of income to make all of the payments, now is probably not the time for speculative land investments. Raw land is notoriously difficult to sell unless there are development plans already in place. It’s not unusual for it to lie unsold for several years.

Property Investment Advice – Creating Positive Cash Flow