Home Buying Help Thread

[MWil23]

2 hours ago, Bullet Club said:

My whole financial outlook has been long term based, and to this point it has worked great, and allowed me to do things I've been wanting to do for some time.

Same here thanks in great part to @ramssuperbowl99 helping get me started. Seriously I can't thank him enough! Aside from my pension, I'm playing the 30-35 year Indexed Mutual Funds compounded at 7-10% annually, and my wife has actually made the switch from education to the private sector, so we have rolled her old base pension into an IRA (tax free) and doing the same while utilizing her employer match.

Throw in this future side gig, and I'm basically treating real estate as any other long term stock option. If I "lose it", then so be it. (By "lose it", I mean lose my initial down payment as a sunken cost like any other stock that goes belly up). Since real estate rarely if ever does that (the recession was abnormal in that it hit BOTH the market AND the housing market at the same time) and furthermore, I'm content renting and not flipping (very different), I'm going to be happy to earn some money in the short term while having a tangible investment after 20-30 years (or a series of houses paid off of if I get into this seriously) that I can flip or rent out without me/us owing on a mortgage around the time I retire.

Quote

I get the whole 'get rich' quick thing but at the end of the day scamming kids and putting them up in garbage situations is pretty low.

It's egregious and embarrassing tbh. I can't imagine people who do that. Furthermore, in this town, you charge by the kid/tenant. 

So, let's say I have a ~1,300 square foot 4 bedroom home, with 2 of those bedrooms being very large. I could charge, very reasonably, $300-$350 per tenant x 6 (2 in each large bedroom, 1 in each small bedroom) and then they furnish it (aside from kitchen appliances) and pay their own bills. 

Imagine your mortgage/escrow is even at the largest $1,000 a month, you're going to clear somewhere between $800 and $1,100 a month, while having that emergency fund everyone in your LLC has contributed (even cost, even split).

Tell me, why would I gouge those kids? How could I possibly look myself in the mirror or those kids/their parents in the eyes when it's honestly a "win/win" for everyone?

I make MORE money, they get a great deal with a large house they otherwise couldn't afford, I take care of all fixes/the yard, and I have a tangible investment that I probably pay off aggressively.

I mean, I could even get a HELOC and get a 2nd house without even dipping back into my own pocket...especially if all of us agree to take the money we are making from that 1st rental and continue to dump it back onto the mortgage to gain equity and/or pay it off ASAP so you can run it that way.

Edited December 10, 2021 by MWil23

[Mox]

22 minutes ago, MWil23 said:

Same here thanks in great part to @ramssuperbowl99 helping get me started. Seriously I can't thank him enough! Aside from my pension, I'm playing the 30-35 year Indexed Mutual Funds compounded at 7-10% annually, and my wife has actually made the switch from education to the private sector, so we have rolled her old base pension into an IRA (tax free) and doing the same while utilizing her employer match.

Throw in this future side gig, and I'm basically treating real estate as any other long term stock option. If I "lose it", then so be it. (By "lose it", I mean lose my initial down payment as a sunken cost like any other stock that goes belly up. Since real estate rarely if ever does that (the recession was abnormal in that it hit BOTH the market AND the housing market at the same time) and furthermore, I'm content renting and not flipping (very different), I'm going to be happy to earn some money in the short term while having a tangible investment after 20-30 years (or a series of houses paid off of if I get into this seriously) that I can flip or rent out without me/us owing on a mortgage around the time I retire.

Same here, except I've only dealt with a good market since I started (thankfully), and am outpacing all my original projections. If I fall down to 10%/year over the next 30-35 I'd be totally fine with that. Real estate is the one I've been longing to get into but don't have any connections or experience at this point. So my current side gig is content creation (novels, eBooks, soon to be videos, etc.), and it's not exactly profitable thus far but in the long term should be something that adds up. Sounds like you've gotten in good thus far, and can tolerate the downside if it happens.

23 minutes ago, MWil23 said:

It's egregious and embarrassing tbh. I can't imagine people who do that. Furthermore, in this town, you charge by the kid/tenant. 

So, let's say I have a ~1,300 square foot 4 bedroom home, with 2 of those bedrooms being very large. I could charge, very reasonably, $300-$350 per tenant x 6 (2 in each large bedroom, 1 in each small bedroom) and then they furnish it (aside from kitchen appliances) and pay their own bills. 

Imagine your mortgage/escrow is even at the largest $1,000 a month, you're going to clear somewhere between $800 and $1,100 a month, while having that emergency fund everyone in your LLC has contributed (even cost, even split).

Tell me, why would I gouge those kids? How could I possibly look myself in the mirror or those kids/their parents in the eyes when it's honestly a "win/win" for everyone?

I make MORE money, they get a great deal with a large house they otherwise couldn't afford, I take care of all fixes/the yard, and I have a tangible investment that I probably pay off aggressively.

I mean, I could even get a HELOC and get a 2nd house without even dipping back into my own pocket...especially if all of us agree to take the money we are making from that 1st rental and continue to dump it back onto the mortgage to gain equity and/or pay it off ASAP so you can run it that way.

Yep. I lived in a situation similar to this in college, and it started off great for all, and ended up getting less great for us. You can be profitable, kind, and reasonable. The first doesn't have to come at the expense of the others.

[MWil23]

14 minutes ago, Bullet Club said:

Same here, except I've only dealt with a good market since I started (thankfully), and am outpacing all my original projections. If I fall down to 10%/year over the next 30-35 I'd be totally fine with that. Real estate is the one I've been longing to get into but don't have any connections or experience at this point. So my current side gig is content creation (novels, eBooks, soon to be videos, etc.), and it's not exactly profitable thus far but in the long term should be something that adds up. Sounds like you've gotten in good thus far, and can tolerate the downside if it happens.

I definitely couldn't do it without my wife for a LOT of reasons.

1. She's amazing

2. She's connected to the university and works there, making word of mouth marketing awesome for everyone.

3. If word of mouth doesn't work out, she can post on the university classifieds and advertise for free.

4. She does the showings and interviews, and sometimes I am also part of the process. For example, last year we had 4 college girls, so I let her take the lead there, whereas this year we have 4 college/graduate students/professionals who are guys, so I stepped in to help there.

I do have a basic ability to do some basic maintenance and fixes, but my 2 buddies I'm going to do this with could absolutely be on a house flipping HGTV show (only very slightly exaggerating; they're gifted)

14 minutes ago, Bullet Club said:

Yep. I lived in a situation similar to this in college, and it started off great for all, and ended up getting less great for us. You can be profitable, kind, and reasonable. The first doesn't have to come at the expense of the others.

That's too bad. Honestly, a lot of this was eye opening for me a few months ago. We had a kid text me that their toilet was leaking, and I came down and starting fixing it within 5 minutes, brought my own towels to clean it up, my own tools, etc.

He was so overly thankful and appreciative, as well as his roommate that it made me realize that the landlords they've had in the past just let things (everything, for that matter) go...and it really made me sad for those kids and angry at those other landlords.

[Mox]

7 minutes ago, MWil23 said:

I definitely couldn't do it without my wife for a LOT of reasons.

1. She's amazing

2. She's connected to the university and works there, making word of mouth marketing awesome for everyone.

3. If word of mouth doesn't work out, she can post on the university classifieds and advertise for free.

4. She does the showings and interviews, and sometimes I am also part of the process. For example, last year we had 4 college girls, so I let her take the lead there, whereas this year we have 4 college/graduate students/professionals who are guys, so I stepped in to help there.

I do have a basic ability to do some basic maintenance and fixes, but my 2 buddies I'm going to do this with could absolutely be on a house flipping HGTV show (only very slightly exaggerating; they're gifted)

That's too bad. Honestly, a lot of this was eye opening for me a few months ago. We had a kid text me that their toilet was leaking, and I came down and starting fixing it within 5 minutes, brought my own towels to clean it up, my own tools, etc.

He was so overly thankful and appreciative, as well as his roommate that it made me realize that the landlords they've had in the past just let things (everything, for that matter) go...and it really made me sad for those kids and angry at those other landlords.

Yeah, that absolutely helps.

I imagine the toilet fixing deal is incredibly rare. Definitely never seen anything like it.

[ramssuperbowl99]

3 hours ago, MWil23 said:

Same here thanks in great part to @ramssuperbowl99 helping get me started. Seriously I can't thank him enough! Aside from my pension, I'm playing the 30-35 year Indexed Mutual Funds compounded at 7-10% annually, and my wife has actually made the switch from education to the private sector, so we have rolled her old base pension into an IRA (tax free) and doing the same while utilizing her employer match.

Oh very nice! 

You're gonna be so rich it's stupid.

[MWil23]

10 minutes ago, ramssuperbowl99 said:

Oh very nice! 

You're gonna be so rich it's stupid.

If so great, but I’m a simple guy. I enjoy landscaping and middle shelf bourbon. 😂 

[MWil23]

11 minutes ago, ramssuperbowl99 said:

Oh very nice! 

You're gonna be so rich it's stupid.

Also, her employer gives 8% of her base salary no matter what, and get this:

Matches up to 4% on top of that! I had her max at 4% into a Roth and she’s rolling the 4% match into her IRA!!!!

[Uncle Buck]

5 hours ago, MWil23 said:

Same here thanks in great part to @ramssuperbowl99 helping get me started. Seriously I can't thank him enough! Aside from my pension, I'm playing the 30-35 year Indexed Mutual Funds compounded at 7-10% annually, and my wife has actually made the switch from education to the private sector, so we have rolled her old base pension into an IRA (tax free) and doing the same while utilizing her employer match.

Throw in this future side gig, and I'm basically treating real estate as any other long term stock option. If I "lose it", then so be it. (By "lose it", I mean lose my initial down payment as a sunken cost like any other stock that goes belly up). Since real estate rarely if ever does that (the recession was abnormal in that it hit BOTH the market AND the housing market at the same time) and furthermore, I'm content renting and not flipping (very different), I'm going to be happy to earn some money in the short term while having a tangible investment after 20-30 years (or a series of houses paid off of if I get into this seriously) that I can flip or rent out without me/us owing on a mortgage around the time I retire.

It's egregious and embarrassing tbh. I can't imagine people who do that. Furthermore, in this town, you charge by the kid/tenant. 

So, let's say I have a ~1,300 square foot 4 bedroom home, with 2 of those bedrooms being very large. I could charge, very reasonably, $300-$350 per tenant x 6 (2 in each large bedroom, 1 in each small bedroom) and then they furnish it (aside from kitchen appliances) and pay their own bills. 

Imagine your mortgage/escrow is even at the largest $1,000 a month, you're going to clear somewhere between $800 and $1,100 a month, while having that emergency fund everyone in your LLC has contributed (even cost, even split).

Tell me, why would I gouge those kids? How could I possibly look myself in the mirror or those kids/their parents in the eyes when it's honestly a "win/win" for everyone?

I make MORE money, they get a great deal with a large house they otherwise couldn't afford, I take care of all fixes/the yard, and I have a tangible investment that I probably pay off aggressively.

I mean, I could even get a HELOC and get a 2nd house without even dipping back into my own pocket...especially if all of us agree to take the money we are making from that 1st rental and continue to dump it back onto the mortgage to gain equity and/or pay it off ASAP so you can run it that way.

This is a very smart plan.  I had an uncle who passed away a few years ago (R.I.P.) who was a successful lawyer in St. Paul.  In addition to that, however, he purchased a couple of apartment buildings many years ago.  He had a 10-unit and a 20-unit.  He told me that when he was younger, while his friends were out playing golf on the weekends, he was cutting the grass and doing small projects at his apartments.  In the end, it really paid off for him because he said in his retirement, his apartment buildings (which were paid off), gave him more retirement income than anything he received from his long term law practice.

[bigbadbuff]

Here we go again. Another house I’m putting an offer in on tomorrow. I’m ok with the down payment, I’m ok with the closing costs, and monthly payment. Just something about putting an escalation offer in for 50k over asking just makes me queasy. This market sucks

[scar988]

10 hours ago, bigbadbuff said:

Here we go again. Another house I’m putting an offer in on tomorrow. I’m ok with the down payment, I’m ok with the closing costs, and monthly payment. Just something about putting an escalation offer in for 50k over asking just makes me queasy. This market sucks

This market is so rough right now. I would not want to pay $50k over asking because most houses aren't going to appraise for that.

[Forge]

12 hours ago, scar988 said:

This market is so rough right now. I would not want to pay $50k over asking because most houses aren't going to appraise for that.

You can still make the deal contingent on the appraisal coming in at an appropriate amount. 

I went 20k over asking for the house we just bought and still had the appraisal contingency included. We were actually willing to go 10k over appraised value if it came down to it, but appraisal came in fine

[MWil23]

10 hours ago, Forge said:

You can still make the deal contingent on the appraisal coming in at an appropriate amount. 

I went 20k over asking for the house we just bought and still had the appraisal contingency included. We were actually willing to go 10k over appraised value if it came down to it, but appraisal came in fine

Some lenders, at least here in Ohio, won't even allow you to put in over asking price if the appraisal comes back under. Do you know how this works and what the workarounds are, if any?

[scar988]

27 minutes ago, MWil23 said:

Some lenders, at least here in Ohio, won't even allow you to put in over asking price if the appraisal comes back under. Do you know how this works and what the workarounds are, if any?

Yeah, cash. If you have enough cash from the sale of your last house or other conditions, then it's going to change what you can pay.

[MWil23]

1 minute ago, scar988 said:

Yeah, cash. If you have enough cash from the sale of your last house or other conditions, then it's going to change what you can pay.

Right, but is that bringing cash to closing then, or adding that to your mortgage is my question.

[scar988]

16 minutes ago, MWil23 said:

Right, but is that bringing cash to closing then, or adding that to your mortgage is my question.

You bring it to closing and your mortgage ends up under the appraisal value. As long as the loan for the mortgage is under the appraisal value, the lender won't care what you pay in the grand scheme of things.