[quote=EconProf]Mercedes7 you say you can put 2/3 of the purchase price as a down payment. This suggests you are getting pretty tired of getting 1 – 3% on your savings, right? This is budging you into the category of possible buyers.
I mention this because it strikes me that the puny interest rate that high-liquidity investors are getting on thier money may be pushing a lot more people onto the buy side–both for residential and commercial real estate.
We are seeing more cash buyers out there, who do the pro forma numbers on a possible purchase and discover they can, even with reduced rental income, make a relatively decent rate of return on a purchase. This applies to apartments, and especially CRE for the more adventuresome. Adds up to one more factor suggesting we are at the bottom of the cycle.[/quote]
You are exactly right. I had even thought of buying a very small 1 br condo (cash) that I would live in for the next 2 years until the real estate market fully corrects (if it ever does) and save a huge portion of the money I am currently paying in rent. Then in a few years, when I found a sfr I really like, convert the condo to a rental (with a positive cash flow since it is paid for). Down side to this is that I would lose a portion of my down payment on the sfr paying for the condo, but I will be saving a portion of that back over the next two years. I am just trying to maximize my savings/income and rates on savings right now are just terrible. So yes, this is my thinking and one of the many reasons I considered pulling the trigger right now. I am really not sure what to do though. I could be happy in the place I found even though it is not a sfr and I would be saving more than I am now. I just don’t want to be sorry that I wasn’t patient for a little longer.
