At break even, and after factoring out the transaction costs, you need about 1.25% annual appreciation for five years just to be break even.

Actually having the knowledge and knowing the lingo can be a key factor.

The higher class neighborhoods will start to see a substantial drop and more foreclosures start to hit the market.By the summer we will see commercial real estate drop in a huge way.In my opinion the severity of the commercial & jumbo loan market collapse, how it is percieved and handled will be the single largest factor in determing how soon we see the "intrisic values".Either way we look at it I think we are all in agreement that times are going to get far worse before any lasting forward progress is made.This is the best damn site!

Have you factored in their points and monthly payments?

When estimating rents be fairly conservative and don't forget to take into account a vacancy factor.

I recently bought a huge batch of "forever" stamps to hedge against future postal rate increases.

Those people will forever be grateful to him as I would be!

OK, so same treatment for these deals:Example #1Rent: $800Expense: $400NOI: $400Payment: $432 (7%, 30 year, $65K)Cash flow: -$32With a down paymentPayment: $346 (7%, 30 year, $52K)Cash flow: $54Cash on cash return: 5.0%Just about CD rates.Example 2Rent: $1725Expense: $862Payment: $699 (7%, 30 year, 105K)Cash flow: $164Cash flow per unit $55So, that one's not too bad, though its not going to be $615/month in cash flow once you've factored in real world expenses.With 20% down, cash flow is $303 or 17.4% cash on cash.

The area he is in has actually appreciated due to strong local factors and he could probably sell it for $95k or more today.

Right now you can purchase property below market, so you ought to factor in the equity you will be picking up if you buy.