Welcome to passive real estate investing, the show where busy people like you learn how to build substantial passive income while creating wealth for the long term.

And now here's your host, Marco Santorelli.

Hello friends and welcome back to another episode of passive real estate investing.

I'm your host, Marco Santorelli.

I just got back from San Jose, California. I was there on a business trip and it was very productive.

However, I always like to see what real estate is like when I go to different markets around the country and guess what I found out?

Not to my surprise, but the median price of a home in San Jose, California as of late mid-October, was $1,010,000. Think about that. A price is over $1 million for a a home and this was based on over 1800 home

sales of recent past so this is not a one-off this is the median it's the middle

midpoint so you know when you do the math that breaks down

based on square footage to a price per square foot of just under $700. That's insane. That's incredible. We've been

selling properties for many many years throughout the country in markets that makes

sense. For 80, 90,

sometimes $100 a square foot, and even our new construction

in various markets like Cape Coral, Florida,

in Tampa, Jacksonville, Florida,

a lot of these properties are right around that $100 per square foot mark.

In fact, it's kind of hard to find properties being built for over $130 a square foot

in the markets that we're in. But it gets worse. If the million dollar price tag wasn't bad enough for a median sales price, the median rent, now this is more for apartments, so I haven't looked into the home rent, but it's going to be pretty darn close

So the median rent per month in San Jose is around $3,500. So if you do the math, if you divide that into the million dollars and you try to calculate your rent to price or rent to value ratio, what we call an RV ratio, that's just a measly 0.35 percent. Remember we're trying to get at or above 0.8 percent

with an ideal target of 1 percent. So when you're down under 0.8 and you're as far down as 0.35% that is very small.

You are not utilizing your investment capital in the best and wisest way possible.

Not only that, it's a very expensive market, high priced, high land values, therefore, potentially high downside risk.

...