Originally posted by @Ali Boone:Notes are great, but the biggest bummer about them is you do miss out on a lot of the financial benefit that owning real property gives- equity build, tax benefits, etc.Another is that notes don't hedge you against inflation unless you're actively trading them up.

Another interesting Los Angeles RE article. http://www.ladowntownnews.com/news/the-rising-pric...

I know that overwhelming feeling so well :-)Keep rising to the top... little by little I bet you will be the expert you are aiming to become.Make it a GREAT day,Manny

We know we bought in an area of rising values but his expertise on the timeline for a more expensive rehab based on rental rate potential was valuable.

The property Property $200,000 Down Payment 20% - $40,000 4 unit complex – rent per unit $800/month ($3200/mo total) 2% Rule – at 2% this property would rent for $4,000/mo This property is at 1.6% 50% rule – 50% of rental income will go toward expenses This property would be $1600/month This expenses include – repairs, vacancies, utilities, taxes, insurance, managements, turnover costs, and occasional big ticket repairs Net Operating Income – NOI Income after fees, these would be the fees listed in the 50% rule and do not include principle and interest For this property - $1600 (not the true number, but based on 50% rule) Cash flow Any money left after subtracting principle and interest from NOI Prinicple and Interest – 30 yr fixed at 4% on $160,000 - $764/mo Cash flow = $3200 - $1600 (NOI) - $764 (P&I) = $836/mo or $10,032/yr Cap Rate Annual NOI/purchase price $19,200/200,000 = 9.6% Return on investment of $40,000 over 30 year life of mortgage Cash flow - $10,032 annual return – 25.1% return 30 years = $300,960 This is a conservative estimate since this money could obviously be re-invested as it was received monthly and the rent would be increased to reflect inflation over the 30 year period Property value at 3% appreciation for 30 years $485,452 30 year total return on $40,000 485,452+300,960 = $786,412 This is a ~10.5% annual return on investment $40,000 invested in stocks/mutual funds at 7% would have returned $304,49I believe this is all correct, but wanted to get some feedback to confirm my understandings of these concepts was correct.  

In SW Florida, I expect prices to continue to rise for some time further squeezing out certain people from being able to rent in the more desirable areas.

Sometime I would say something about a current deal but would add what I am really looking for at the moment is someone with some money that they have earning money in a savings account at 1% and are losing 3% to inflation.

So it seems like the prices of the houses here are pretty inflated because of that fact.

I purchased several HUD homes in past using my own money, now i'm considering wholesaling properties and was wondering is it possible to wholesale a HUD home to a buyer and how would I make money from this type of deal since I couldn't inflate price to cover my fee as wholesaler, or can I?

I tend to find my older clients want triple net and an income stream that just nicely outpaces inflation and has equity growth through principal pay down.