Christian Osgood walks through buying a $3.7 million office building with a 30% down payment. He starts by identifying cash flow and equity, then outlines the plan to eventually buy out the current investor and take full ownership.
Chapters
So what you just saw me do was an abridged version of day one for real estate. I need to know where are we starting? We have X amount of cash flow and Y is our equity. Now in this particular deal, we would be buying it for about what it's worth day one. It's pretty much 1 to 1. If we end up getting a 3.7 accepted based on its numbers, it's worth about 3.7 today. So we would have our down payment in this case, 30% down. So I would have 30% equity in the deal. So 30% of $3.7 million, whatever that exact number is, would be our total equity. That's how much money we have initially in the deal. We compare that at the end of this. I am going to buy the building from the investor, so I am the exit plan.