What would you do if you could get an interest only loan for $500,000??

Question

I am thinking about buying a $50,000 Saleen Mustang and a $450,000 house and renting out the house.

What do you think? What would you do??

To the 3rd guy.... Really you would try to make more money at your job? You dont say! Now why didnt I think of that! Thanks for your insight!

Answer 1

I think you'll be paying a lot of interest and you'll never own this stuff. It seems kind of pointless to me.

Answer 2

Based on the rule of 7, the house would have to generate $65K a year in rental income. Good luck finding someone to pay $5,000 a month rent.

Plus, your payments are going to increase due to the sub-prime nature of your mortgage. Property values are still declining in most of the USA. The bank is going to become the owner of your house after foreclosing and ejecting you.

Sounds like you have a job - if you have no debt and a lot of savings - put some down on the Mustang and buy a cheaper house (with a conventional mortgage) to rent out.

Answer 3

That's a lot of money tied up with a crappy ROI. How about buy several properties, or a multi family or two that cash flow, and then use your asset that is throwing off cash flow to pay for your Mustang? Then you have a much better ROI, you have income producing assets, and your toy?

Answer 4

I suggest a $10,000.00 1966 Ford Mustang and a $90,000 house and invest the rest in the Stock Market with the help of a Portfolio Manager like myself.

Answer 5

I'd work at increasing my income so as not to have any debt. Why share profits....and expose your risk of having your stuff taken away?

Answer 6

Why would you pay that much money for a rental property?

Answer 7

Good stuff... if you can afford it. I would do the same thing, just more in my price range.