Friday, November 18, 2005
Thursday, November 17, 2005
Eastside 4-Plex
Eastside 4-Plex
quick calculations
$385K price
$700 per unit x 4 units = $2800
20% down ~ $80K
80% loan + expenses = ~$2200
I think this one can split even after managment overhead. on a good month it'll even cashflow!
quick calculations
$385K price
$700 per unit x 4 units = $2800
20% down ~ $80K
80% loan + expenses = ~$2200
I think this one can split even after managment overhead. on a good month it'll even cashflow!
Wednesday, November 16, 2005
Somerset (Bellevue) 3770 SF View Home 4BR + 2.5 BA + 2 Car Garage
Somerset (Bellevue) 3770 SF View Home 4BR + 2.5 BA + 2 Car Garage
We were having a discussion during lunch at work and my co-worker brought out a good point, and that is with escalating real estate prices, it's a lot more cost effective to rent in a desired neighborhood than to buy. Take for example, the house above is $2600 a month in the best neighorhood in Bellevue (very good HS).
If I were to buy that house, it'll cost well over $700K, over $4000 a month payment w/ 20% down. Even after taxes, it's still cost effective to rent.
But you'll argue "isn't it best to have your own home so that in 30 years it's paid off and you have equity that's growing?" Well, yes. So here's the twist. What if instead of spending $250K to buy the house (at ~30% down), you spent the $250K to buy a commercial property? Then, that $$$ is STILL appreciating, and it could cashflow a significant part of your rent! So, your cost out of pocket to live in that million dollar house is only a fraction of the real rent!
Still you may ask. But rent will just keep going up, where as a mortgage payment is fixed! True, but if I own a commercial property, its rent will increase overtime as well, and quite possibly, at a faster rate than a single family home. This will also offer more protection against rising interest rates if you have an ARM.
So here's a new plan. In 2 years we could possibily have enough equity in our house to do this. We could sell our house and rent a nice house in Bellevue. Take the equity and purchase another commercial property that returns 6% or more. This solves multiple problems.
1. We increase our passive income.
2. We increase our wealth by adding another institutional level property.
3. We provide Jack w/ the best school possible.
4. We actually reduce our monthly expenses (true cost of rent is $2600-income from property).
I can't think of a better WIN WIN situation!
We were having a discussion during lunch at work and my co-worker brought out a good point, and that is with escalating real estate prices, it's a lot more cost effective to rent in a desired neighborhood than to buy. Take for example, the house above is $2600 a month in the best neighorhood in Bellevue (very good HS).
If I were to buy that house, it'll cost well over $700K, over $4000 a month payment w/ 20% down. Even after taxes, it's still cost effective to rent.
But you'll argue "isn't it best to have your own home so that in 30 years it's paid off and you have equity that's growing?" Well, yes. So here's the twist. What if instead of spending $250K to buy the house (at ~30% down), you spent the $250K to buy a commercial property? Then, that $$$ is STILL appreciating, and it could cashflow a significant part of your rent! So, your cost out of pocket to live in that million dollar house is only a fraction of the real rent!
Still you may ask. But rent will just keep going up, where as a mortgage payment is fixed! True, but if I own a commercial property, its rent will increase overtime as well, and quite possibly, at a faster rate than a single family home. This will also offer more protection against rising interest rates if you have an ARM.
So here's a new plan. In 2 years we could possibily have enough equity in our house to do this. We could sell our house and rent a nice house in Bellevue. Take the equity and purchase another commercial property that returns 6% or more. This solves multiple problems.
1. We increase our passive income.
2. We increase our wealth by adding another institutional level property.
3. We provide Jack w/ the best school possible.
4. We actually reduce our monthly expenses (true cost of rent is $2600-income from property).
I can't think of a better WIN WIN situation!
Friday, November 11, 2005
Tuesday, November 08, 2005
Tuesday, November 01, 2005
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