Posted by Tom on October 25, 2001 at 10:42:48:
In my market, with housing at this rent level, I’ve found that if I pay more than 70 times a month’s rent, I have a devil of a time making a positive cash flow. My comment was based on the fact that the stated price was 81 times a month’s rent (if memory serves me). Of course, if he is going to move into one side of this duplex initially, and can get a 6% fixed rate, then maybe he can get a decent cash flow. I can’t get a fixed rate mortgage, so I keep basing my calc on about 8.5 or 9%. Right now, mortgage rates are coming down, and my ARM’s are starting to slowly slide downhill, so I’ll be smiling at these interest rates when they finally get to me.