[urbanrealtor]

[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.

[urbanrealtor]

[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.

[urbanrealtor]

8 lock boxes.
At least 4 are current realtor sentrilocks.
At least 1 is an obsolete realtor supralock (or possibly an out of county agent).
The complex you are thinking of is probably either Treo or La Vita. They both have over-packed exterior cabinets.
No there are not socials stored on them.
Acqua Vista actually has more boxes but they are in a locked room.

[urbanrealtor]

8 lock boxes.
At least 4 are current realtor sentrilocks.
At least 1 is an obsolete realtor supralock (or possibly an out of county agent).
The complex you are thinking of is probably either Treo or La Vita. They both have over-packed exterior cabinets.
No there are not socials stored on them.
Acqua Vista actually has more boxes but they are in a locked room.

[urbanrealtor]

8 lock boxes.
At least 4 are current realtor sentrilocks.
At least 1 is an obsolete realtor supralock (or possibly an out of county agent).
The complex you are thinking of is probably either Treo or La Vita. They both have over-packed exterior cabinets.
No there are not socials stored on them.
Acqua Vista actually has more boxes but they are in a locked room.

[urbanrealtor]

8 lock boxes.
At least 4 are current realtor sentrilocks.
At least 1 is an obsolete realtor supralock (or possibly an out of county agent).
The complex you are thinking of is probably either Treo or La Vita. They both have over-packed exterior cabinets.
No there are not socials stored on them.
Acqua Vista actually has more boxes but they are in a locked room.

[urbanrealtor]

8 lock boxes.
At least 4 are current realtor sentrilocks.
At least 1 is an obsolete realtor supralock (or possibly an out of county agent).
The complex you are thinking of is probably either Treo or La Vita. They both have over-packed exterior cabinets.
No there are not socials stored on them.
Acqua Vista actually has more boxes but they are in a locked room.

[urbanrealtor]

Not to be dense, but how does that math make any sense? Are there additional costs that you have not mentioned (eg: crazy interest, high HOA’s)? I mean the whole reason the 200x rent number exists is because it generally flow close to even. If it is less than 200 you should not be that screwed for flow.
EG:
Property rents for 1000/mth.
Property sells for 175x rent (175,000).
At 6%, thats less than 1050/mth payments.
For 150x rent thats less than 900/mth.

This isn’t in El Cortez, is it?

[urbanrealtor]

Not to be dense, but how does that math make any sense? Are there additional costs that you have not mentioned (eg: crazy interest, high HOA’s)? I mean the whole reason the 200x rent number exists is because it generally flow close to even. If it is less than 200 you should not be that screwed for flow.
EG:
Property rents for 1000/mth.
Property sells for 175x rent (175,000).
At 6%, thats less than 1050/mth payments.
For 150x rent thats less than 900/mth.

This isn’t in El Cortez, is it?

[urbanrealtor]

Not to be dense, but how does that math make any sense? Are there additional costs that you have not mentioned (eg: crazy interest, high HOA’s)? I mean the whole reason the 200x rent number exists is because it generally flow close to even. If it is less than 200 you should not be that screwed for flow.
EG:
Property rents for 1000/mth.
Property sells for 175x rent (175,000).
At 6%, thats less than 1050/mth payments.
For 150x rent thats less than 900/mth.

This isn’t in El Cortez, is it?

[urbanrealtor]

Not to be dense, but how does that math make any sense? Are there additional costs that you have not mentioned (eg: crazy interest, high HOA’s)? I mean the whole reason the 200x rent number exists is because it generally flow close to even. If it is less than 200 you should not be that screwed for flow.
EG:
Property rents for 1000/mth.
Property sells for 175x rent (175,000).
At 6%, thats less than 1050/mth payments.
For 150x rent thats less than 900/mth.

This isn’t in El Cortez, is it?

[urbanrealtor]

Not to be dense, but how does that math make any sense? Are there additional costs that you have not mentioned (eg: crazy interest, high HOA’s)? I mean the whole reason the 200x rent number exists is because it generally flow close to even. If it is less than 200 you should not be that screwed for flow.
EG:
Property rents for 1000/mth.
Property sells for 175x rent (175,000).
At 6%, thats less than 1050/mth payments.
For 150x rent thats less than 900/mth.

This isn’t in El Cortez, is it?

[urbanrealtor]

I would have to agree that the rental price represents a minimum price floor. In the really depressed areas the purchase option can be significantly cheaper even with a minimal amount brought as cash (think subprime parts of El Cajon or really any part of Chula Vista). However nicer areas seem to put that floor higher. That means you are break-even with rent at 10 or 20 or 30 percent cash.

I will use an urban example here. A 2-bedroom condo property in Hillcrest will sell for about $300k or so. It will rent for 1800-2000/mth. That means at 25% down, this will cash flow about evenly (depending on HOA fees). A property in Normal Heights of a similar character will sell for 220,000K and rent for $1600/mth. In other words it breaks even at almost nothing down. In this case you pay a value premium for the desirable location.

Boiling it down: What this means is you need to figure out what you have for a down and how close to rent you can bring your monthly payments. If you can find a place you like where you can buy and pay about as much in mortgage as you would in rent, then for christ sake’s, buy it.

Note: You will need a good loan officer (who is recommended and honest). Also, you will maximize your benefit by buying between September and February. That is when sellers are most stressed and likely to accept lower offers.

[urbanrealtor]

I would have to agree that the rental price represents a minimum price floor. In the really depressed areas the purchase option can be significantly cheaper even with a minimal amount brought as cash (think subprime parts of El Cajon or really any part of Chula Vista). However nicer areas seem to put that floor higher. That means you are break-even with rent at 10 or 20 or 30 percent cash.

I will use an urban example here. A 2-bedroom condo property in Hillcrest will sell for about $300k or so. It will rent for 1800-2000/mth. That means at 25% down, this will cash flow about evenly (depending on HOA fees). A property in Normal Heights of a similar character will sell for 220,000K and rent for $1600/mth. In other words it breaks even at almost nothing down. In this case you pay a value premium for the desirable location.

Boiling it down: What this means is you need to figure out what you have for a down and how close to rent you can bring your monthly payments. If you can find a place you like where you can buy and pay about as much in mortgage as you would in rent, then for christ sake’s, buy it.

Note: You will need a good loan officer (who is recommended and honest). Also, you will maximize your benefit by buying between September and February. That is when sellers are most stressed and likely to accept lower offers.

[urbanrealtor]

I would have to agree that the rental price represents a minimum price floor. In the really depressed areas the purchase option can be significantly cheaper even with a minimal amount brought as cash (think subprime parts of El Cajon or really any part of Chula Vista). However nicer areas seem to put that floor higher. That means you are break-even with rent at 10 or 20 or 30 percent cash.

I will use an urban example here. A 2-bedroom condo property in Hillcrest will sell for about $300k or so. It will rent for 1800-2000/mth. That means at 25% down, this will cash flow about evenly (depending on HOA fees). A property in Normal Heights of a similar character will sell for 220,000K and rent for $1600/mth. In other words it breaks even at almost nothing down. In this case you pay a value premium for the desirable location.

Boiling it down: What this means is you need to figure out what you have for a down and how close to rent you can bring your monthly payments. If you can find a place you like where you can buy and pay about as much in mortgage as you would in rent, then for christ sake’s, buy it.

Note: You will need a good loan officer (who is recommended and honest). Also, you will maximize your benefit by buying between September and February. That is when sellers are most stressed and likely to accept lower offers.

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