[quote=sdgldnbear]Nope not El Cortez. Math makes sense (and means it won’t flow) when you consider paying interest on full purchase price rather than 80%, plus taxes, HOA, insurance, maintenance.
Example. I have seen places listed in the $200k to $225k range that rent for around $1300-$1500/mo. $200k is 150x $1300 (roughly) and $225k is 150x $1500. That’s a great value for resale someday, but monthly expenses on a $200k place at say 6.5% are upwards of $1700 or $1800 if you’re honest with yourself about every likely expense.
Hence my question whether the negative $200 or so per month is worth it if you can buy at 150x rent.[/quote]
I do not generally recommend predicating investment based on expectation of future profit (versus current performance). However, if there was something that really seems like it will pop then do it. EG, Acqua Vista has 2br stuff on the 11th floor with a harbor view for less than 300k.
Its absurd. But we really have no way of compensating for the unknown that is future value.
I also don’t make it a practice to tell clients, friends, or blog buddies not to buy. I am just saying be careful. A potential economic event could throw even “common sense” about future values out the window. And negative cash flow always sucks. Good luck.
