Understanding Debt and Equity in Real Estate Investing

Equity is defined as the value of an asset less the value of liabilities attached to that asset in investing in a real estate ; in other terms, equity is the cash you have invested in the asset or business. If you sold your home and paid off your mortgage, the money left over would represent equity. 

Debt is defined as borrowing money from a third party with the intention of repaying the borrowed money plus interest at a later period.

 

Understanding Debt and Equity in Real Estate Investing
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