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Non-Tech : Investing in Real Estate - Creative Opportunities
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To: RetiredNow who wrote (1977)11/27/2013 12:51:07 AM
From: John Vosilla  Read Replies (1) of 2722
 
Hot Wall Street and Private Equity buying up a huge percentage of homes for cash to rent out. Only a small percentage of homes are bought with high leverage and all of them are owner occupied. So no crash coming any time soon. Maybe the 'grand plan' is inflate housing and rents to high but still reasonable multiples to net operating income, get the wealth effect and consumption spending burst from housing into high gear like 2004-06, while pushing yet again easy qualify little down loans for J6P at today's low rates to make PITI vs escalating rents a no brainer as the end game keeping the party going into perpetuity?

Say a $210k house with 5% down that rents for $1650 conservatively (GRM of 10). Assuming 2% a year for taxes and insurance and 30 year amo at 6.5% PITI would be $1600 but at 4% is only $1300. Theoretically can inflate the house to $275k to make the numbers work equivalent rent equal to PITI at just 4% rate
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