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$400k house at 70% LTV = $280,000
$280,000 at 6.25% int for 30 years = $1724.01 P+I
$1724.01 + $666.67 for taxes and insurance = $2390.68
Is at $400k house in SW FL really going to rent out for $2390?
Hard to say, depends on what they get for their $400k.
So let’s say it does rent out for that much and you are breaking even every month or even cash flowing a little. What is their exit strategy you ask?
“Despite the current housing malaise, promoters are expecting a substantial run-up in prices during the next five years.”
My question is this; When in history has there been a 7 year historic run-up, declines for a few years, and then started another 5 year run-up?
Never I tell you, but just because it has never happened doesn’t mean it can’t happen. The only way it could happen is if local wages increased enough to enlarge the local pool of buyers (despite the declining dollar).
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