how does equity work?

[Alway Investing]

I found a condo the market value is 130,000 they have it listed for 70,000 and its a shortsale. I need to know how does equity work? The day I buy this house can I get a equity loan or line of credit to buy some mobile homes as rental income? If not how long do I have to wait to tap into the equity?


                                         

[hassansr]

equity is the difference between the appraised value (per the lender) and the amount of money that you purchased the property for. this of course assumes that you purchased it as a discount.

In a normal market lenders would be willing to give qualified borrowers a mortgage or line of credit for up to 80% or 90% of the appraised value of properties (now 75-80%). Qualified is off course subject to lenders guidelines. AS for timelines, you are probably looking at 6 to 12 months holding time  before being able to refi for cash out or get a credit line. Your credit scores need to be in the 700 range and you cant have more than 3 mortgages already in your name to qualify