Re: New idea. What do you think? - Posted by phil fernandez
Posted by phil fernandez on March 24, 2001 at 06:15:14:
This idea or plan as you call it, is straight out of Robert Allen’s “Nothing Down” best seller. As others have said on paper it is a great plan, but here’s the flaw. The plan depends on consistent appreciation of values. Values normally don’t follow a nice even upward curve.
Appreciation goes up and then often levels off for a couple of years or so. Appreciation is not dependable. To me appreciation is just the icing on the cake. I never make my investing decisions based on appreciation.
Another flaw I see is with the uncertainty of what interest rates will look like five years down the road. If they jump up to 12 - 15%, and they have before, your properties that you refi will probably not cashflow.
Thirdly don’t let the glitter of MBA’s and computer science degrees blind you to the fact that they are not necessary for success in real estate investing.