Lately a handful of my buyers/seller's have talked about what's going on in the Commercial area. Supposedly the next shoe to drop. Many experts seem to think that a Commercial loan catastrophe would make the residential losses look like a walk in Golden Gate Park.
Yesterday, Simon Properties Group Inc., the nation's largest shopping-mall owner, made a $10 billion bid to acquire rival General Growth Properties Inc., which is seeking to emerge from bankruptcy.
I think as time goes by, we will see many more deals like this come out of the woodwork. As many of you know, my experience is both Residential and Commercial and I watch both markets. My financial securities licenses and the periodicals I receive daily keep me up to date on what's going on in the broader markets. Buying a single family home or condomium and making that good long term decision is healthy for your portfolio.
The cost of money is still very cheap. Don't let the distractions on the side of the road postpone your goal. The 24 hour news cycle fosters stress and indecision. Whay may happen in the commercial markets should not affect your personal decision to provide a good home for you and your family.
Look at the long term advantages of buying versus renting. Lets say you bought a 3 bedroom/2 bath home in San Francisco for $800K. You put down 20%. Now you have a $640,000 loan. Your mortgage and taxes are roughly $3400/month with an average $9500 in annual tax savings. Okay, I've simplified it greatly and I have based that on a 10 year hold but it's not as complicated as you may imagine. Renting the identical home in San Francisco would probably be between $3200-3400/month and NO tax savings.
The HUD website has a great tool for you to use to calculate buying vs renting. Check it out.
My numbers tend to be conservative and my outlook is optimistic. Give me a call or pop me an email and I can get into this much deeper based on your individual needs.
I will attest to the long term advantages of buying verses renting.
My new house payment is virtually paid for with my tax savings. I wish I had purchased sooner!
Posted by: John Hamilton | February 17, 2010 at 02:32 PM