I have an investment oppourtunity to help a couple get into a brand-new house in north San Diego county - Carlsbad. The OLP was $859,000. We can get the house for $820,000 (4BR, 3-1/2B, 3200SF). I will come in with 5% down ($41,000 from a HELOC on my primary residence). They will make the monthly mortgage payment (account NOT impounded). They want me to split the annual property tax payment (approx. $8,000 total, $4000 my half-I’m against this). We will split the mortgage deduction. The loan will be a 5/1 ARM. We are thinking of forming an LLC that will hold title (Will that mean I can take depreciation?). I’ve told them that there are other great oppourtunities around the country, which there is. I have to decide if this would be the best deal for my $41,000 investment. This would be my very first deal. The San Diego market is very soft right now (overvalued, I believe) and interest rates are climbing. High-end homes are also the slowest-moving (a $400,000 home would move much faster that an $800,00 home). Could I structure this deal better? We plan on holding on to this property for 5-10 years. Thanks in advance…
if you think the market is overvalued, why are you buying.
buy low, sell high. not the other way around.
don’t do a deal just to do one. find an area that isn’t overvalued.
Cecsix is right…think about what else you could do with $41000.00
If they are in a soft market then just keep your money and wait for a smokin deal to come along. Because in every soft market comes distressed home owners as well.
Good Luck 
Thanks much for the advice, I do appreciate it. I’m sure I will be able to find a real smokin’ deal in these parts in the next few months. I read a post on a local site where someone said their bank is in the process of setting up a foreclosure section just to handle all the expected foreclosures coming…guess I’ve just about answered my own question, needed a little assurance.
yeah, that’s right ramona!
send me the $41000, and I’ll send you the free & clear title to a decent rental property here in columbus. it might not appreciate much, but it will provide steady income as long as it’s rented.
it’s such a different business depending upon where you are. I’m about to acquire my 5th property with $0 dollars out of pocket, in fact I’ve walked away with about$20000.
there’s no good reason, in a weakening market like cali, florida, etc, to sink a bunch of real money into something that will depreciate and you can’t rent at a PCF.
cecsix - thanks for the info. How’s the market in Columbus?