You should never buy an income producing property that has a cap rate that is low relative to other properties in the neighborhood.
True or False
Property managers can do nothing to increase property cap rates since cap rates are determined by market forces.
True or False?
You buy a home that has a price of $400,000. You finance the purchase by issuing a fixed rate 15 year mortgage that has a 5% interest rate for the amount of $320,000. Wells Fargo is the lender. You make monthly payments of principal and interest. You finance the $80,000 from money in your checking account. After one year the value of your home has appreciated by $10,000. Your equity stake in the property has increased by $30,000.
True or False?