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Originally Posted by afm1
It would work if the numbers work. There comes a point in the equation where an expensive house will not make the numbers work.
Here is a system that one of my investors uses.
Buy a house for $125K, mortgage is $500 a month, he rents it out for $800 per month cash flowing $300.
Buy a house for $250K, mortgage is $1300 a month, he rents it out for $1400 per month cash flowing $100.
Once you hit a certain price, the numbers do not work. You can get more money for a cheaper house than you can for a home that costs more.
Last example, lets say you buy a house for $450K or even $550K. How much can you get for rent to off set the mortgage? Maybe, just maybe, $2500 max. Now buy a house for $250K and charge $2000 a month in rent.
Get it?  |
Got it.
I just want to be able to invest in the San Diego or Las Vegas market for a future retirement home without a negative cash flow so that I can keep up with the rate of appreciation.
If I borrow money for the investment and it pays for itself then in 5 – 10 years the property in either of those two markets should see a substantial appreciation even though I paid zero on my principal.
The alternative was to save the money for my retirement home and the interest earned simply did not keep up with the rate of appreciation putting a home in these markets out of reach in 5 – 10 years.
Got it?
~VegasMack