Two questions with a buy and hold strategy in mind

[Mike Huerta]

Like many others I'm new and trying to take in as much info as I can. I'm running my way through the BP podcasts (they are fantastic). One thing that seems is consistently ignored when evaluating a property for buy and hold is the equity. Example, you buy a property with a 0% cap rate. Sure there's no cashflow on a monthly basis, but at the end of year end, assuming appreciation is 0%, you've gained whatever the principle was for 12 months. Running some rough numbers, that can easily result in a 5-7% net return in equity on your investment. Yet, it seems people consider a 0% cap rate a bad deal.

Second question, which is related but sort of not, I'm through the first 15 or so episodes of the pod cast which sounds like it started in 2011/2012, and several of the guests reference getting into the game right after 2008 because the market was way undervalued. That's great for them to have that foresight. Now here we are in 2019. How are people, specifically buy-and-holders, feeling about this market? Are we going liquid in anticipation of another correction? Are folks still bull on housing? This is probably the big unknown keeping me from leaping into the market.

FWIW, i'm in Northern California, specifically the East Bay, and looking at the Concord/Martinez/Pleasant Hill markets as well as in the Tracy/Manteca/Lodi/Stockton area, but I live/own in Livermore.

-Mike