Cross-Collateralization: How to Buy Property With No Money Down

Cross-Collateralization: How to Buy Property With No Money Down

Lendable equity is simply the equity you have in another property that you can use to purchase other properties. With the lendable equity you have left on your first property, you can go out and buy another property at $100,000 with no money down. If your second property can support a DSCR of 1.2 when 100% financed, then the collateral needed is in the first property. If the second property cash flows well and can appraise high enough, you can repeat this process and really snowball your buying power. If you improved the second property and increased the value to $125,000, now that property will stand alone.

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