> Aren’t you just buying a very inflated asset with that mortgage?
If there is no significant inflation in the future, that's probably right.
But if there is significant inflation, that value will go way up in absolute dollars simply due to the dollar devaluing. And the mortgage balance will effectively be minimzed by the same reason.
Except everybody thinks this way. When I was house hunting a few years ago houses that needed work on great property sold at basically 0% discount compared to houses that didn't need work. I saw bidding wars resulting in fixer-uppers going for literally more than houses that didn't need work. The only exception where houses that needed serious structural work, and even then the discount was nowhere near enough to make it really worth it.
You are right. I had to buy an absolute basket case of a house all the easy fix and flips are gone. You have to be able to take the pain/work of the deals that people without vison pass on.
If there is no significant inflation in the future, that's probably right.
But if there is significant inflation, that value will go way up in absolute dollars simply due to the dollar devaluing. And the mortgage balance will effectively be minimzed by the same reason.