Understanding these numbers
I picked up a book " The Wall Street Journal Complete Real estate investing guidebook." Looks good so far, but I am trying to wrap my head around some math in here. If anyone could please break this down for me.
When evaluating if buying a property is the best use of money the author states
"Do the math: If you buy a $300,000 house with a 95 percent loan at 6 percent, and the house appreciated at 5 percent annually, you're just treading water."
$300,000 House
Loaned: $385,000
Downpayment: $15,000
6% of $300,000 = $18,000
Those are the specs I can pull out from this statement. Very confused on how the would be owner is treading water. If anyone can break this down for me, thanks! I am assuming the 6% interest may be the annual cost of interest on the loan... Thanks for the help