Posted by Ronald * Starr(in No CA) on September 24, 2003 at 10:56:05:
You are projecting extremely high appreciation. However, the recent data suggests that the silicon valley home prices are declining, I believe. The price increases in the immediate San Fran Bay Area seem to be slowing down.
I suggest that you do more research on projections of price trends for the area before you commit to a large mortgage payment for a property that may be declining in value. Do a google search on the topic. One of the first places to look is the www.dataquick.com website. The Sunday S. F. Chronicle real estate section has lists of properties that have sold in different zip codes around the bay area. They also have some comparisons of sales prices with prior year’s sales prices. Look some of them up, perhaps in your local public library.
If you want to live in such an expensive house, you probably will find that financially you will be better off renting. The monthly payment will be less. There are some issues that you have to resolve before doing so, such as having pets, decorating as you like, and perhaps being dispossessed should the property owner wake up and realize that renting such a high-priced property is not a good idea. Get as long a lease as you can.
Then take the money that you would have paid for owning a house and invest in rental property that will provide you with a better return. If you want appreciation, I recommend buying in the central valley of CA or in the “rim” which is about 2500-4000 elevation in the foothills from Paradise down to Mariposa. You will get both appreciation and positive cash flow, plus, if you can use it now, tax benefits.
I think a bridge loan is not feasible. The idea of a bridge loan is to provide money to buy until your old home is sold, then the bridge loan is paid off with the money from the sale of your old home.
Good Investing*********Ron Starr***************