Some ideas for you:

The theory behind larger equity is that shareholders will treat the property as their own, i.e., there will be a higher regard for the building because you have more vested by way of your own money.

1. The argument may hold some water, but I've seen shareholders who hold 100% equity on their shares and their apartments are kept in deplorable conditions.

2. Some shareholders have put down 10% or 20% and have invested over $40K in upgrades to their units, i.e., new kitchens, bathrooms and other luxuries. Thus, adding value to the building.

I think the problem is admissions: how good are you in detecting investors or individuals who wish to flip units without putting a nickel into the unit? I think with 80 or 90% debt there is the suspicion that the buyer intends to flip the unit at a higher price to liquidate the mortgage which finances 80 or 90% of the unit.

However, bottomline is that if people can afford a mortgage at 6.35% fixed rate for 30 years and only but 10-80% equity, meet their financial obligations w/o going into great deal of sacrifice, they would rather do this if they do not have to commit their cash, which may be used for creating personal wealth by investing it. This is the premise of many businesses and the mentality of a free enterprise that we so adore.

Good luck!

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