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Rent vs Buy in Cape Coral : Real Estate Advice

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  • Local Info78
  • Home Buying410
  • Home Selling29
  • Market Conditions36

Activity 4
Thu Jun 12, 2014
Harold Lear answered:
We have a lease option program we call it Mortgage Alternative Program... This is how ours works...Minimum fico 500, 50% Debt to Income Ratio, 5% to 10% down, determined by your credit score... You find a home up to $2,000,000 that you would like to purchase... We will purchase that home for Cash... The lease payment is based on a 5% interest rate... You will have 6 years to exercise your option to purchase... The purchase price will increase 1% per year... We have a website that has a PowerPoint presentation that will give you all the details. look under services.
or you can reach me at 858-945-1047.
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Mon Oct 18, 2010
AJ Ackerman answered:
Hi Kip

You are all set! I sent you an email with the information you desire and an automatic update for future properties.
It was great to chat with you on the phone. Hope you found the information helpful!

Have a Beautiful Day!

A.J. Ackerman
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Sun Jan 18, 2009
Kelly Bkk answered:
From the last poster (clearly a real estate guy):

""Let's take this scenario for example: let's say you're paying $2000 a month rent here in New York and you stay here for 5 more years. That's $24,000 a year in the toilet or $120,000 over 5 years."

OK -- now for the real math.

Paying $2,000 a month for 30 years at 6% yields a "present value" (price of the house that these payments could support) of $333,588. Assuming NO downpayment, At the end of five years (to be consistent with the example above), you will have paid $97,000 in interest and paid down $23,000 in principal. Assuming nothing has changed in the market, you will have $23,000 in equity in the house. Well, that's something, I suppose. But you will have thrown $97,000 out the window in interest payments. Of course, if you then tried to sell the house for what you paid ($333,588), you will pay a 6.0% commission ($20,015), leaving you with all of $3,000 in net "equity" to put into your pocket. Big whoop. For that $3,000, built up over 5 years, you have locked yourself into a mortgage, into a location, and lost all flexibility of change of job or change of geography. What if prices go down? Opps . . . . that $3,000 doesn't look very good after all now, does it.

Renters may be throwing their money out the window in rent payments, but house owners do the very same thing for a very long time as well -- only in their case its called "interest" on the debt they've taken on.
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