All Forum Posts by: Charles Marshall

Considering all things equal, the return with 100% cash purchase will have a better return if your alternate return for the cash is less than the mortgage rate. Let's use two scenarios. Let's say you have $100k in the bank and a $100k property is available. Scenario 1 is to buy the property with the $100k cash. Scenario 2 is to buy the property with $0 down and a $100k mortgage. But you have the $100k still in the bank that you can invest. Scenario 2 is the better option if you can get a better return from investing the $100k than the mortgage rate. If you're mortgage rate is 4% but you can get a 5% return investing the $100k in some other asset, then scenario 2 works better. If you leave the $100k in the bank earning 1%, then scenario 1 will give you a better return. Note that appreciation for this comparison doesn't matter. There are some other nuances including the ability to write off your mortgage interest at applicable tax rates as well as incurring closing costs on obtaining a mortgage. Simply put this is leverage: borrowing money to invest. Hopefully you're borrowing money at a rate lower than you can get by investing the funds. If you don't have $100k, then there's only one option: scenario 2.

This is a great thread.  Excellent information.

@Paul Timmins - Thank you.

@Paul Timmins - What REIA group meets in Rockland?

Welcome @Richard St Aubin.  Listen to all the Podcasts.  It's like an intensive introduction to all facets of real estate investing.

CNBC has been covering house flipping throughout the day.  They're saying 8% of all sales lately have been flipped.  I couldn't catch everything.  They did show the markets realizing the greatest returns on flips and it included mostly east coast markets including New Haven, CT.

I just realized they may have posted an article on their site.  And?  They did.  Here it is:

http://www.cnbc.com/2016/03/03/home-flipping-reach...

Great info.

Anyone have some recommendations on south shore, south coast or Cape Cod?  Not looking for hot markets in terms of price increases.  Looking more for good rent to price ratios.

I'm a CFO for a professional services firm.  I'm also a CPA, an EMT and a CPR instructor.

I grew up in the NB area and have a lot of friends and family in the area. I've been thinking that the South Coast is a good opportunity for investment. 

Great idea!  Looking forward to meeting other South of Boston / South Shore investors.