Investment Property with 100% Finance or 空手套白狼

An example used in example of calculate annual return rate before:

House price 270k, rent $1850 purchased at 2005
Original 20% down 80% mortgage at 5%, PTPI $1300
Now refinance ctake cash out. mortgage 315k at 6.375% PTPI %2205

Suppose take less mortgage @ 270k, PTPI would be $1850, that's a even-cash flow with 0 investment (more or less, didn't count the 2 years interest of the downpay and maitenance cost). Any rent increase less maintenance, paid principle in mortgage, or house appreciation, will be the return. The ROI?

A sleeping 8 - ∞. That's cash cow no need to feed hay to it.

True, it's an extreme case not repeatable for every property, but I bet lots of long term RE investors have some holdings like this after a few years.

所有跟帖： 

• 我很奇怪，银行和大型投资公司怎么不多多做这些那？ -helloagain- ♂ (50 bytes) () 10/10/2007 postreply 16:28:21

• bank is not in the business of landlording -jy101- ♂ (305 bytes) () 10/10/2007 postreply 16:39:31

• 有更高的回报产品 such as CDO回复：我很奇怪，银行和大型投资公司怎么不多多做这些那？ -tafa- ♂ (0 bytes) () 10/10/2007 postreply 17:31:06

• DDD! -小小石头- ♂ (0 bytes) () 10/10/2007 postreply 18:08:47

• 银行从80-90年代的教训中学到了房地产的风险 -basicenglish- ♂ (62 bytes) () 10/10/2007 postreply 19:00:15

• yea, banks are much wiser now. -tafa- ♂ (0 bytes) () 10/10/2007 postreply 19:19:45

• dd -cultuslake- ♂ (0 bytes) () 10/10/2007 postreply 21:41:25

• Where you can buy 270K and rent it for 1850? -春山再醒- ♀ (51 bytes) () 10/10/2007 postreply 22:11:20