Home Buying & Real Estate Thread

[you go boy]

Ayo I am hyped right now...Im going to move in my place sooner than I expected... I was just waiting for my pops to recover from heart surgery and he's doing better but also there was a ton of stuff on backorder like my kitchen cabinets and dining table... it looks like both are in stock and my kitchen should be getting renovated on Dec 28th & 29th...that was the hold up really from me moving in but once the kitchen is done my place will be ready for me to move in... all the furniture will be there...I can't wait! I will post pictures soon...

 

[アミーゴ]

Damn for a 30yr?

15

 

[you go boy]

usually you get a lower rate for less years... I got 2.75 for my 20 year mortgage

 

[BR0 MONTANA]

I was told that if I made 1 extra mortgage payment every year and applied it to the principle of the loan I would reduce my 30yr loan down to 22yrs. Is that true?

 

[monstar]

I was told that if I made 1 extra mortgage payment every year and applied it to the principle of the loan I would reduce my 30yr loan down to 22yrs. Is that true?

They have calculators that can confirm this for you.

It should be something close if in honest.

Multiply your monthly mortgage by 13bthen divide by 12 you spread with out over the course of the year. Doesnt need to be all at once

 

[nonnative]

I was told that if I made 1 extra mortgage payment every year and applied it to the principle of the loan I would reduce my 30yr loan down to 22yrs. Is that true?

8 years is a little much from what I remember. It’s closer to like 6 but yeah it’s true. Think about that $2k or whatever it is and saving on 30 years of compound interest on that amount.

 

[moderndarwin]

8 years is a little much from what I remember. It’s closer to like 6 but yeah it’s true. Think about that $2k or whatever it is and saving on 30 years of compound interest on that amount.

I totally am on board with this idea. That math says otherwise though - like take that payment and throw it into the market and let it ride for 22 years would be a better end result.

 

[antidope]

Paying off your mortgage early is bad TRADITIONAL finance, but I totally understand the behavioral finance perspective of it.

 

[BR0 MONTANA]

Paying off your mortgage early is bad TRADITIONAL finance, but I totally understand the behavioral finance perspective of it.

Please explain how it is considered bad. Im not trying to argue I just want clarification. Thanks

 

[moderndarwin]

Please explain how it is considered bad. Im not trying to argue I just want clarification. Thanks

The money you put in could be invested instead.
Example $1,000 a month to pay down a mortgage versus taking the same $1,000 and investing it into the SP 500.

Copied from a website
Let’s take a look at an example. Say you have a 30-year mortgage of $200,000 with a fixed rate of 4.5%. Your monthly payments would be $1,013 (not including taxes and insurance), according to our mortgage calculator, and you’d spend a total of $164,813 in interest over the life of the loan.

Now let’s say that you’re able to come up with an extra $300 per month to put toward your mortgage. You’d shave off 11 years and one month from your repayment period, plus save $67,816 in interest.


On the other hand, you could take that $300 per month and invest it in an index fund that tracks the S&P 500 Index instead. Historically, the S&P 500 has returned an average of 10% to 11% annually since its inception in 1926 through 2018. If you want to be extra conservative, however, we can assume an average annual return of 8% on your investment.

At the end of 19 years (about the length of time it would take to pay your mortgage early), you would have $160,780. That’s more than double your potential interest savings. In fact, after that length of time, you’d have about $105,487 left on your mortgage. If you decided to pay your mortgage early after all, you could use your investment funds and still have $55,293 left over.

 

[antidope]

Please explain how it is considered bad. Im not trying to argue I just want clarification. Thanks

All good man, didn't think you were trying to argue at all.

The math doesn't support it, it would tell you to invest that money. Over the last ten years (12/01/2011 to 11/30/2021) a 50/50 Stock & Bond Portfolio (using 50% S&P 500 & 50% Bloomberg Barclays) has returned +9.32% annualized.

If you're truly just trying to play the numbers, paying off a mortgage (or any sort of really cheap debt) early doesn't make financial sense if you had the option of investing that surplus vs using it to pay down debt. But its definitely more about just math.

 

[you go boy]

^ stocks/mutual funds are no joke man... you really do make money from investing... long story short in 2012-2013 my moms told me to invest in facebook but i was like no i dont see how it can grow... kept nagging me and telling me trust me just put your money there instead of leaving it in your savings... so i was like ok ill put majority of my money in there... from that year until 2021 there was a lot of ups and downs but my portfolio grew big when i took it out... actually when i took it out facebook hasnt been the same value wise now compared to when i took it out in August because it just dipped since then... so i really did make out by selling it when i did... point is a lot of that money went into buying my condo... i couldnt afford my condo if it wasnt from investing in stocks and of course saving from 2012-2021....

 

[ballinsam23]

antidope moderndarwin i'm usually in the crowd of pay off your debt as fast as possible. Lets say your monthly income is 3k with 1k in mortgage payments. You pay off that house early, nothing else is giving you an extra 2k per month.

Your house in 15-30 years grows in value also. Which I consider positive debt. In those 15+ years does your house value not grow from 200k to 400-500k anyway? I guess its a win win either way when it comes to a mortgage.

Unlike student loan debt. Which is negative debt.

Both have similar interest rates today. Obviously one is a 10 year or less payoff, the other is 15-30 years. Do the same principles apply to student loan debt?

 

[antidope]

antidope moderndarwin i'm usually in the crowd of pay off your debt as fast as possible. Lets say your monthly income is 3k with 1k in mortgage payments. You pay off that house early, nothing else is giving you an extra 2k per month.

Your house in 15-30 years grows in value also. Which I consider positive debt. In those 15+ years does your house value not grow from 200k to 400-500k anyway? I guess its a win win either way when it comes to a mortgage.

Unlike student loan debt. Which is negative debt.

Both have similar interest rates today. Obviously one is a 10 year or less payoff, the other is 15-30 years. Do the same principles apply to student loan debt?

Purely math, yeah same concept applies but personally I agree with you. I paid off my student loans as fast as I possibly could have. Didnt want them hanging over my head. Needed the peace of mind.

 

[kvsm23vs24]

Math wise it’s definitely better to invest then pay off early. But, anything. Can happen in the future. Can lose your job, not protect your investments right and splurge on other things. At least paying off the mortgage a bit earlier Can relive some stress. Psychologically knowing those 2-3k ain’t coming out from your account every month feels good.

 

[sneakaprince]

antidope moderndarwin i'm usually in the crowd of pay off your debt as fast as possible. Lets say your monthly income is 3k with 1k in mortgage payments. You pay off that house early, nothing else is giving you an extra 2k per month.

Your house in 15-30 years grows in value also. Which I consider positive debt. In those 15+ years does your house value not grow from 200k to 400-500k anyway? I guess its a win win either way when it comes to a mortgage.

Unlike student loan debt. Which is negative debt.

Both have similar interest rates today. Obviously one is a 10 year or less payoff, the other is 15-30 years. Do the same principles apply to student loan debt?

I will say that student loan debt is a drag but the interest rate is low enough and there are enough "excuses" that can make it manageable if you're smart.

My real world example is probably my sister and I. My sister chose to pay off her Student loan debt as early as possible. She literally spent everything she had for her first 5-7 years post grad school paying it off as a teacher (I think the debt was only 15-30K). I spent that same time actively acquiring real estate.

My investment properties easily cover my student loan debt and their respective mortgages. I recently sold my first home (a duplex that was primarily used as an investment property for the last 5 years). The sale made enough to pay off my student loans (60k+) in their entirety without having to interfere with my day to day life at all.

I once again declined to pay off my student loans since the debt is manageable and I was able to get another investment property for 30K down, I'm making 1500 a month profit on this purchase (a business is using the property as an adult family home). I made 4.6K back in the very first month of ownership.

I'm actually working with my sister now on her first investment property and I had to explain that there is really no benefit in aggressively paying off a manageable debt. She'd still like to make an extra payment or two a year but the chances of her owning any of these places for more than 5 to 10 years is unlikely. Why spend the extra money for something you will only hold temporarily.

Sorry for the rant. I need to visit this thread more. I also smoked a joint prior to writing this so sorry for rambling lol.

 

[ballinsam23]

sneakaprince care to elaborate more on the investment real estate side. What state? Do you have your own contractors? Do you look at duplex’s only? Or do you build up from a ranch let’s say.

 

[sneakaprince]

sneakaprince care to elaborate more on the investment real estate side. What state? Do you have your own contractors? Do you look at duplex’s only? Or do you build up from a ranch let’s say.

Whats good bro? Hope all is well. Happy Hanukkah to you and your people.

I live in Wisconsin and I buy almost all of my property in the Milwaukee area. We have a **** ton of multifamily homes here many of which can be had for sub 300s. Hell 300 here can buy you a 4plex if you really go after it. I'm actually in the middle of a wholesale deal for 8 units at 520K. Going to sell it for nearly 700 if everything works out the way it should.

I do have contractors I've been working with but I'm kinda leveling up thus I've had to find better guys over the last year or so. My old team is always on deck but I won't front they were just "okay". They get the job done surely but I'm beginning to set my sights on higher end stuff and will need a more skilled team as I evolve.

Over the course of the last 7 years or so I've owned:

3 duplexes (2 of which I still own).
1 four unit apartment building (sold in October).
1 three unit property (duplex in the front of lot, single family in back of lot). (still own)
1 eight unit apartment building (wouldn't buy again but it was cool enough), (sold in 2016).
1 single fam (primary residence, still own, but hoping to sell in the spring/ summer).

I hate ranches but Milwaukee has a ton of those too. I grew up in a ranch and find them to be kinda boring but my realtor/ mentor always tells me they sell the fastest.

I'm a pretty big multifam or nothing kind of guy. I like knowing that even if one person falls short another tenant can at least offset that loss. Honestly I regret my single fam purchase even though I have probably somewhere between 80-100K in equity and I haven't done much work. It works for my family but I always think about how hard it would be to make the profits I'm used to if I transitioned it to a rental down the line. I could always refinance but I will probably just take the cash whenever we sell.

I've posted about my portfolio before and dudes always assume I'm up more than I am. I would say it wasn't until this year that I actually felt like I knew what I was doing and the money really began to show. Prior to I just owned a bunch of stuff and made a couple extra dollars every month. By no means am I wealthy. I actually still work a day-job and I do some reselling (not sneakers) on the side.

 

[Mark Antony]

That's dope, not a lot of affordable decent muli-family near me but I should have gotten into it when they were.

 

[sneakaprince]

That's dope, not a lot of affordable decent muli-family near me but I should have gotten into it when they were.

No bs you used to be able to get a good duplex in Milwaukee all day for sub 200. The prices I'm seeing now are still kind of crazy to me but obviously the market has shifted.

Yeah I happened to be from a city with a lot of very affordable multifams and I just took advantage of that. I got friends from all over because I schooled out of state and I've traveled a bunch. I always tell them that being from Milwaukee has been the key to my success.

The barrier to entry is relatively low, and there isn't many neighborhoods I can't go. I'm getting to a point there are a ton of neighborhoods I just wouldn't invest in, but there is money to be made for those that are willing to do the work.

 

[sneakaprince]

Here's 3 quick examples of Milwaukee properties that are actually selling at a premium (due to current market) imo, all of these hit the market today:

8623 West Fond Du Lac AVENUE, Milwaukee, WI 53225 | Zillow

8623 West Fond Du Lac Avenue, Milwaukee WI, is a Multiple Occupancy home that was built in 1960.This home last sold for $415,000 in May 2023. The Zestimate for this Multiple Occupancy is $462,700, which has decreased by $3,055 in the last 30 days.The Rent Zestimate for this Multiple Occupancy...

www.zillow.com

5338 North 83rd St, Milwaukee, WI 53218 | Zillow

5338 North 83rd St, Milwaukee WI, is a Multiple Occupancy home that was built in 1959.This home last sold for $285,000 in January 2022. The Zestimate for this Multiple Occupancy is $324,800, which has decreased by $12,852 in the last 30 days.The Rent Zestimate for this Multiple Occupancy is...

www.zillow.com

2722 North Stowell Ave UNIT 2724, Milwaukee, WI 53211 | Zillow

2722 North Stowell Ave Unit 2724, Milwaukee WI, is a Multiple Occupancy home that contains 3287 sq ft and was built in 1903.It contains 5 bedrooms and 3 bathrooms.This home last sold for $265,000 in February 2022. The Zestimate for this Multiple Occupancy is $395,400, which has increased by...

www.zillow.com

All of these except the last one are 4 unit properties. The last one is being used as a 3 unit current and is probably in the best area (of the 3 I selected).

Deals like this really come across my desk everyday. Obviously pictures, condition etc can be decieving but with time and experience you begin to know what to look for.

 

[cs02132]

Here's 3 quick examples of Milwaukee properties that are actually selling at a premium (due to current market) imo, all of these hit the market today:

8623 West Fond Du Lac AVENUE, Milwaukee, WI 53225 | Zillow

8623 West Fond Du Lac Avenue, Milwaukee WI, is a Multiple Occupancy home that was built in 1960.This home last sold for $415,000 in May 2023. The Zestimate for this Multiple Occupancy is $462,700, which has decreased by $3,055 in the last 30 days.The Rent Zestimate for this Multiple Occupancy...

www.zillow.com

5338 North 83rd St, Milwaukee, WI 53218 | Zillow

5338 North 83rd St, Milwaukee WI, is a Multiple Occupancy home that was built in 1959.This home last sold for $285,000 in January 2022. The Zestimate for this Multiple Occupancy is $324,800, which has decreased by $12,852 in the last 30 days.The Rent Zestimate for this Multiple Occupancy is...

www.zillow.com

2722 North Stowell Ave UNIT 2724, Milwaukee, WI 53211 | Zillow

2722 North Stowell Ave Unit 2724, Milwaukee WI, is a Multiple Occupancy home that contains 3287 sq ft and was built in 1903.It contains 5 bedrooms and 3 bathrooms.This home last sold for $265,000 in February 2022. The Zestimate for this Multiple Occupancy is $395,400, which has increased by...

www.zillow.com

All of these except the last one are 4 unit properties. The last one is being used as a 3 unit current and is probably in the best area (of the 3 I selected).

Deals like this really come across my desk everyday. Obviously pictures, condition etc can be decieving but with time and experience you begin to know what to look for.

That’s dope I’m in Boston where it’s pretty much all multi fams until you’re in residential areas. Wanted to get a rental possibly but I can’t afford one anymore..That last house here would easily be 750k
These aren’t even in that good of areas

Boston, MA Multi Family Homes for Sale & Real Estate | realtor.com®

Find your dream multi family home for sale in Boston, MA at realtor.com®. We found 146 active listings for multi family homes. See photos and more.

www.realtor.com

 

[edshoecator]

Envy. Full tear downs go for 1 mill here in Los Angeles.

 

[sneakaprince]

Envy. Full tear downs go for 1 mill here in Los Angeles.

Yeah Cali wild. I got homies out there that make decent money but will never own because the barrier to entry is so high.

Cali cats low key ruining my market with their bread because they come in and buy **** for high prices forcing me to pay more than I'd like.

The comps get nicer tho.

 

[lovehateself]

Envy. Full tear downs go for 1 mill here in Los Angeles.

275k dont even get you a decent condo out here