Concern? - Posted by Andy

Posted by Ronald * Starr(in No CA) on March 08, 2003 at 17:07:16:


It certainly could happen. On the other hand, it may be that the rents will go up over time and you will be able to sell for more than you paid for the property. How good are you at predicting the future?

My approach is to never sell, just hold on forever. If you adopt that approach you will not have to worry about the question.

If you hold the property for a few years you will have pay-down on your mortgage. So, even if you sell for what you pay or somewhat below what you pay, you might still come out with a profit. And, hopefully, the renter helped you accumulate that profit.

Now, if this is a lot of concern to you, why don’t you just do real estate merchanizing? Just buy properties for below-market price and then resell right away for a profit? You should still be in the low interest rate environment and not have to worry about declining rates.

Another thing is to try to buy for less than market value. If you do that, you have a built-in cushion when you buy and a small deline in property values will not hurt you much.

Good Investing**************Ron Starr*************

Concern? - Posted by Andy

Posted by Andy on March 08, 2003 at 11:44:01:

I am getting ready to buy my first owner occupied duplex and want to know if I have a legitimate concern. There are very few duplexes for sale in my area and the ones that are seem extremely overpriced. Average GRM seem to be in the 9+ range. It seems however with the very favorable financing that is available now, even these properties will provide a 10%-15% cash on cash return.

My question is what happens when rates go up and I want to sell a few years down the road. Will I be stuck because nobody will be able to buy my property and have it cash flow. I hope I expained my thoughts well enough.

I am in columbia, MO if that helps.

Thanks Again