here to talk about finance, real estate, and politics.
Colorado, USA
- Tweets 29,835
- Following 614
- Followers 5,397
- Likes 19,494
Pinned Tweet
Many will tell you that one's home is not an asset...
If that's true, then how did I spend the past 7 years leveraging my home's equity to acquire 3 additional income properties, worth a combined $2.6M, that cash-flow more than $6K/mo...?
27
2
159
List a house for $700k.
Lower the price to $685k.
Lower the price to $670k.
Lower the price to $659k.
Lower the price to $650k.
Pull the listing, stay put, and consider trying again next year.
Sell a $700K house.
Put $700K into Treasuries at 5%.
That’s $35K/year before taxes.
Rent a similar place for $2,500/month.
That’s $30K/year.
You still have the $700K principal.
Suddenly renting doesn’t look so crazy.
1
14
1,849
Wow, I had no idea so many people would insist that I was lying and full of shit in the post below.
So here is proof that a home in Denver valued at $1.5m, can rent for $5,000/mo.
A home in my neighborhood just listed for sale for $1,500,000. Even with 20% down ($300,000), the total monthly payment (PITI) would be just north of $10,000 at today's rates.
Some friends of our are renting a home that is the exact same model as the home listed for sale. Their rent is $5,000/mo, and their landlord takes care of all repairs and maintenance.
It's become completely impossible to justify buying in this market, at least until prices or interest rates give.
6
12
4,161
PSA: Just because your mortgage costs a certain amount per month, doesn't mean it will rent for more than that.
Lots of people who bought over the past 3 years, who can't sell their home now... are learning this important lesson.
3
21
1,701
A home in my neighborhood just listed for sale for $1,500,000. Even with 20% down ($300,000), the total monthly payment (PITI) would be just north of $10,000 at today's rates.
Some friends of our are renting a home that is the exact same model as the home listed for sale. Their rent is $5,000/mo, and their landlord takes care of all repairs and maintenance.
It's become completely impossible to justify buying in this market, at least until prices or interest rates give.
86
9
514
64,860
And worth noting that the property that is listed for $1,500,000... was purchased for $1,630,000 less than 2 years ago.
And the $1.5M list price isn't after months of no action, and several price reductions. This is their opening bid. They are literally accepting a minimum $132,000 loss out of the gate.
5
1
21
3,794
As I navigate my mortgage rate reprices on my adjustable rate loans this year, I'm thankful that I didn't over-extend myself, worked to maintain low LTVs, and kept plenty of capital available to pay down my remaining principal.
But I know that many other investors were compelled by greater greed, and a greater need to fly much closer to the sun... and I fear they may be painted into a corner when their loans reprice.
I guess the only question is: Will the number who get wrecked be enough to unravel the greater market?
Only time will tell.
4
5
791
"Would you rather have deli meat that is literally sliced moments before it hits your bread, or not stand in line for 30 minutes? You can pick one."
- Jersey Mikes
2
6
651
I know cost segregation is all the rage for RE investors, but I just have no interest in going down that road.
I'll admit, I'm not an expert on the matter, but it just feels like frontloading deductions, to improve cash-flow in the early years, at the expense of higher tax obligations down the road, is a sign you're flying too close to the sun.
5
8
899
"Have a current mortgage with us? Looking to buy something new? Finance your new home purchase with us, and we will let whomever buys your current home, yo assume your existing low-interest mortgage!"
Why aren't more lenders/banks offering this promotion? Seems like a no brainer allows them to do even more business, and make even more money.
Are there federal regulations that would prevent them from doing this? I know loans have a "due on sale" clause, but the lender could waive that in the interest of doing more business, right?
1
1
568
Unpopular Opinion:
This is why you buy as much house as you can reasonably afford. There is a high likelihood you will outgrow your house if you buy something that is only sized for your current needs, and once you realize you need more house, your option might be limited.
Just spoke with a friend
His wife wants to buy a bigger house
Their current mortgage is $2,600 a month
The new house she wants would be $6,800 a month with a 7.19% interest rate
He explained that their debt to income ratio would be too high and they can’t make it work
She replied that she didn’t care and he needs to make the new house work
This is the reality of the housing market
13
2
115
16,463
When we bought our 4,100sqft, 5 bedroom + office home in 2016, it was more than we needed.
But as our kids have gotten older, and remote work has become more of the norm, we dont feel cramped, and we have enough room for both my wife and I to have dedicated office spaces.
Wanting/needing to move so that we have more space, is not a problem we will ever face.
2
11
752
Awfully misleading of them to label the bag of flour as ALL purpose...
And completely unrelated, does anyone have a recommendation for someone who can come fix a botched drywall repair job?
4
312
In march, we signed a tenant to one of our higher-end long-term rentals. They were up front out of the gate, stating that they had just sold their house, and needed a place to live while they found their next home.
In that they wanted to sign a 3-month lease, with the option to go month-to-month after that, with a 45-day notice to end the lease.
I allowed them to proceed, but I asked for a 25% premium (about $1,000/mo extra), in exchange for the short-term lease, and flexibility.
Last night they notified me that they have found a house, and will be moving out on December 18th. This is far from an ideal date to end a lease, given house hard it can be to find a new tenant around the holidays, but it's what I agreed to, and I will have made an extra $9,000 or so in rent this year, so its not a big deal if I have to eat some extended vacancy.
4
18
1,732
Can anyone who is an expert on 401k plans explain how someone in their 40's, who isn't facing hardship, can tap into their 401k without facing heavy penalties or tax events?
I'm under the impression that it isn't wise to access one's 401k before 59.5. What say you?
I’d love for someone to explain to me how to leverage an IRA before 59.5 without heavy penalties…. I’m asking in earnest here.
22
8
5,358
Live look at all the Republicans who were soooo vocal about Biden's cognitive decline, as they watch Mitch McConnell return to Congress this week.
2
4
257
One of my STRs is on a 7/1 ARM that is scheduled to reprice in July of next year. If I do nothing, the current rate of 3.00% will probably jump up to 7.00% give or take, and my payment will go up by $1,139/mo.
If I refinance into a new 30yr product at 7.00%, it will extend my loan term, but it will save me about $320/mo in total payment.
If I throw $100,000 at the principal, and also refinance into a new 7.00% rate, my payment will only be $140/mo more than it is currently.
None of these options are ideal, compared to having a 3.0% rate, but that's life.
And I'm not sure how I will proceed when the time comes, as I have no idea what rates will look like 10 months from now. But the fact that I am even modeling my options this far in advance, puts me way ahead of many others who are in a similar boat, with no plan, just blissfully avoiding the reality that is coming for them.
21
14
2,415