Rent Forever, Don’t Buy A Home

[wawaweewa]

Originally Posted by LazyJ10

Don't be fooled, flipping is here to stay and has definitely had more activity in the Bay Area as of late. My bestfriend does this as his job. It's no different from any other type of asset management/analyst work. He has a focused niche "starter home" and studies the area. He's handy and can do a lot of work himself. Plus he does a budget and sticks to it.

It's the "weekend warrior" types who got into this, fueled by greed and "gotta keep up with the Jones'", who lost their shirts.

Things are different, in terms of underwriting, but the mortgages are still being moved on the secondary market and more funds are launching with a debt/credit focus.

That's exactly it. "Flipping" seriously is a full time job. It's nothing new and they're not really flippers. They're property investors and they've been around for as along as property has been around. 
Dude should of preface it by saying "if you want to quit your job, take on a new profession full time, it has the potential..."... but so do a lot of things if you dedicate yourself full time. 

 

[wawaweewa]

Originally Posted by LazyJ10

Don't be fooled, flipping is here to stay and has definitely had more activity in the Bay Area as of late. My bestfriend does this as his job. It's no different from any other type of asset management/analyst work. He has a focused niche "starter home" and studies the area. He's handy and can do a lot of work himself. Plus he does a budget and sticks to it.

It's the "weekend warrior" types who got into this, fueled by greed and "gotta keep up with the Jones'", who lost their shirts.

Things are different, in terms of underwriting, but the mortgages are still being moved on the secondary market and more funds are launching with a debt/credit focus.

That's exactly it. "Flipping" seriously is a full time job. It's nothing new and they're not really flippers. They're property investors and they've been around for as along as property has been around. 
Dude should of preface it by saying "if you want to quit your job, take on a new profession full time, it has the potential..."... but so do a lot of things if you dedicate yourself full time. 

 

[mr718]

Originally Posted by wawaweewa

Originally Posted by Supermanblue79

Originally Posted by Wr

I was saying on top of your monthly payment (which normally includes P.I.T.I.- Principle, Interest, Taxes and Insurance) you can add a principle only payment on top of that. When you first get a mortgage almost none of your payment goes to paying down the principle amount owed on your home. You'll spend the first 10-15 years paying interest to the bank rather than paying for the house. 200/month extra dollars principle only comes out to 2400 dollars off your principle a year. That can shave years off of your amortization.  

Agreed.
And to answer the question above, here's an example.  For the average $1,200 monthly mortgage payment, about $100-$200 of that actually goes toward the principle.  In some cases it could be less.  Paying an extra $200 on the principle is like making two payments per month.  This is how you cut a 30 year mortgage down to 15 years or less.

1200 monthly on a 30 year is about a 175k loan? 
If you have a 400k loan that 200/month will not shave off 15 years. I feel like I'm talking to %#!$%#% trees.

$200/mo for 360 months (30yrs) = $72,000.  Might not cut you in half but definitely wouldn't hurt.

 

[mr718]

Originally Posted by wawaweewa

Originally Posted by Supermanblue79

Originally Posted by Wr

I was saying on top of your monthly payment (which normally includes P.I.T.I.- Principle, Interest, Taxes and Insurance) you can add a principle only payment on top of that. When you first get a mortgage almost none of your payment goes to paying down the principle amount owed on your home. You'll spend the first 10-15 years paying interest to the bank rather than paying for the house. 200/month extra dollars principle only comes out to 2400 dollars off your principle a year. That can shave years off of your amortization.  

Agreed.
And to answer the question above, here's an example.  For the average $1,200 monthly mortgage payment, about $100-$200 of that actually goes toward the principle.  In some cases it could be less.  Paying an extra $200 on the principle is like making two payments per month.  This is how you cut a 30 year mortgage down to 15 years or less.

1200 monthly on a 30 year is about a 175k loan? 
If you have a 400k loan that 200/month will not shave off 15 years. I feel like I'm talking to %#!$%#% trees.

$200/mo for 360 months (30yrs) = $72,000.  Might not cut you in half but definitely wouldn't hurt.

 

[seasoned vet]

Originally Posted by GetThisMoney

3 years and you are also subject to a 15% gains tax to IRS. 10 houses in 30 years I consider that flipping.

......or 6 houses in 30 years.
 
- keep in mind a 3 year turn around is a fast sell. you must have gained a grip of equity to sell that fast, but i dont rule it out because it can happen. 5 years is more suited to give you time for upgrades.
 
 

Originally Posted by GetThisMoney

repair fees at least 10k.

....again, im only talking about new construction. aint no way in hell anyone should be paying 10K in repairs on a new construction home.
 
 


  

 

[seasoned vet]

Originally Posted by GetThisMoney

3 years and you are also subject to a 15% gains tax to IRS. 10 houses in 30 years I consider that flipping.

......or 6 houses in 30 years.
 
- keep in mind a 3 year turn around is a fast sell. you must have gained a grip of equity to sell that fast, but i dont rule it out because it can happen. 5 years is more suited to give you time for upgrades.
 
 

Originally Posted by GetThisMoney

repair fees at least 10k.

....again, im only talking about new construction. aint no way in hell anyone should be paying 10K in repairs on a new construction home.
 
 


  

 

[getthismoney]

^yea but its not about paying it in 30. You have to calculate it for 15 yrs. So 36000 is all.

 

[getthismoney]

^yea but its not about paying it in 30. You have to calculate it for 15 yrs. So 36000 is all.

 

[jordanhendrix]

lol @ flipping brand new homes hahah

 

[jordanhendrix]

lol @ flipping brand new homes hahah

 

[wawaweewa]

Originally Posted by Mr718

Originally Posted by wawaweewa

Originally Posted by Supermanblue79

Agreed.
And to answer the question above, here's an example.  For the average $1,200 monthly mortgage payment, about $100-$200 of that actually goes toward the principle.  In some cases it could be less.  Paying an extra $200 on the principle is like making two payments per month.  This is how you cut a 30 year mortgage down to 15 years or less.

1200 monthly on a 30 year is about a 175k loan? 
If you have a 400k loan that 200/month will not shave off 15 years. I feel like I'm talking to %#!$%#% trees.

$200/mo for 360 months (30yrs) = $72,000.  Might not cut you in half but definitely wouldn't hurt.

Adding .01 to a monthly payment wouldn't hurt. 
If someone has a 400k 30 year loan at 6%, do they have $500 extra a month laying around solely for extra payments? Some do, most will not. Adding $500 extra on a 2400 monthly will shave off about 11 years. 

Adding 200 extra on a 1200 monthly will shave off about 9 years. 

My parents paid off their house in 10 years but that's with paying off principal in 15k chunks every 6 months the last 2-3 years. 

 

[wawaweewa]

Originally Posted by Mr718

Originally Posted by wawaweewa

Originally Posted by Supermanblue79

Agreed.
And to answer the question above, here's an example.  For the average $1,200 monthly mortgage payment, about $100-$200 of that actually goes toward the principle.  In some cases it could be less.  Paying an extra $200 on the principle is like making two payments per month.  This is how you cut a 30 year mortgage down to 15 years or less.

1200 monthly on a 30 year is about a 175k loan? 
If you have a 400k loan that 200/month will not shave off 15 years. I feel like I'm talking to %#!$%#% trees.

$200/mo for 360 months (30yrs) = $72,000.  Might not cut you in half but definitely wouldn't hurt.

Adding .01 to a monthly payment wouldn't hurt. 
If someone has a 400k 30 year loan at 6%, do they have $500 extra a month laying around solely for extra payments? Some do, most will not. Adding $500 extra on a 2400 monthly will shave off about 11 years. 

Adding 200 extra on a 1200 monthly will shave off about 9 years. 

My parents paid off their house in 10 years but that's with paying off principal in 15k chunks every 6 months the last 2-3 years. 

 

[supermanblue79]

Originally Posted by wawaweewa

Originally Posted by Supermanblue79

Originally Posted by wawaweewa

1200 monthly on a 30 year is about a 175k loan? 
If you have a 400k loan that 200/month will not shave off 15 years. I feel like I'm talking to %#!$%#% trees.

400K loan?
Then double it.  The concept is the same.
Please take a look at a monthly mortgage statement before you post again.

lol
OMG, easy, double it! You're assuming that people can just add extra principal payments. Do people deficate USD that I don't know of? 

If they could add these extra payments they would've either purchased a more expensive home (larger or better area) or put down a larger down payment in many cases. 

What you're proposing doesn't make sense. DUCY?

Mortgage payments should only no more than 30% of your total income.  For the smart buyer, making an extra payment on principle alone each
month is easy.
It's not easy for the buyers that have over extended themselves and are house poor. (ei. you considering your logic with your hypothetical 400K mortgae)

 

[supermanblue79]

Originally Posted by wawaweewa

Originally Posted by Supermanblue79

Originally Posted by wawaweewa

1200 monthly on a 30 year is about a 175k loan? 
If you have a 400k loan that 200/month will not shave off 15 years. I feel like I'm talking to %#!$%#% trees.

400K loan?
Then double it.  The concept is the same.
Please take a look at a monthly mortgage statement before you post again.

lol
OMG, easy, double it! You're assuming that people can just add extra principal payments. Do people deficate USD that I don't know of? 

If they could add these extra payments they would've either purchased a more expensive home (larger or better area) or put down a larger down payment in many cases. 

What you're proposing doesn't make sense. DUCY?

Mortgage payments should only no more than 30% of your total income.  For the smart buyer, making an extra payment on principle alone each
month is easy.
It's not easy for the buyers that have over extended themselves and are house poor. (ei. you considering your logic with your hypothetical 400K mortgae)

 

[wawaweewa]

Originally Posted by Supermanblue79

Originally Posted by wawaweewa

Originally Posted by Supermanblue79

400K loan?
Then double it.  The concept is the same.
Please take a look at a monthly mortgage statement before you post again.

lol
OMG, easy, double it! You're assuming that people can just add extra principal payments. Do people deficate USD that I don't know of? 

If they could add these extra payments they would've either purchased a more expensive home (larger or better area) or put down a larger down payment in many cases. 

What you're proposing doesn't make sense. DUCY?

Mortgage payments should only no more than 30% of your total income.  For the smart buyer, making an extra payment on principle alone each
month is easy.
It's not easy for the buyers that have over extended themselves and are house poor. (ei. you considering your logic with your hypothetical 400K mortgae)

Hypothetical? Not everyone lives in bumble****, US. That's the usually not where the jobs are anyway. 400k isn't even the average in Brooklyn. 
Should, could, would. The fact is that's not how it works now. I agree that that's how it should work but a lot of things should work one way and work completely different. 

 

[wawaweewa]

Originally Posted by Supermanblue79

Originally Posted by wawaweewa

Originally Posted by Supermanblue79

400K loan?
Then double it.  The concept is the same.
Please take a look at a monthly mortgage statement before you post again.

lol
OMG, easy, double it! You're assuming that people can just add extra principal payments. Do people deficate USD that I don't know of? 

If they could add these extra payments they would've either purchased a more expensive home (larger or better area) or put down a larger down payment in many cases. 

What you're proposing doesn't make sense. DUCY?

Mortgage payments should only no more than 30% of your total income.  For the smart buyer, making an extra payment on principle alone each
month is easy.
It's not easy for the buyers that have over extended themselves and are house poor. (ei. you considering your logic with your hypothetical 400K mortgae)

Hypothetical? Not everyone lives in bumble****, US. That's the usually not where the jobs are anyway. 400k isn't even the average in Brooklyn. 
Should, could, would. The fact is that's not how it works now. I agree that that's how it should work but a lot of things should work one way and work completely different. 

 

[supermanblue79]

Whether it's Brooklyn, NY or the little town of Snaggleteeth Gardens, Alabama...
the same rules apply.

 

[supermanblue79]

Whether it's Brooklyn, NY or the little town of Snaggleteeth Gardens, Alabama...
the same rules apply.

 

[wawaweewa]

Originally Posted by Supermanblue79

Whether it's Brooklyn, NY or the little town of Snaggleteeth Gardens, Alabama...
the same rules apply.

Uh, no. Wages are nowhere near perfectly indexed to COL in the US. 

 

[wawaweewa]

Originally Posted by Supermanblue79

Whether it's Brooklyn, NY or the little town of Snaggleteeth Gardens, Alabama...
the same rules apply.

Uh, no. Wages are nowhere near perfectly indexed to COL in the US. 

 

[tcerda]

Avg rent in San Antonio, TX is prolly around $700. I bought a 3 bedroom home for 60 grand. Spent another 10 grand remodeling (Pops and I did the work ourselves) Mortgage is 557.00 a month including property taxes and home insurance. FTW!

  Now I will at least have something to give my 2 boys when Im gone.

 

[tcerda]

Avg rent in San Antonio, TX is prolly around $700. I bought a 3 bedroom home for 60 grand. Spent another 10 grand remodeling (Pops and I did the work ourselves) Mortgage is 557.00 a month including property taxes and home insurance. FTW!

  Now I will at least have something to give my 2 boys when Im gone.

 

[jordanhendrix]

^^ Winning!

 

[supermanblue79]

Originally Posted by TCERDA

Avg rent in San Antonio, TX is prolly around $700. I bought a 3 bedroom home for 60 grand. Spent another 10 grand remodeling (Pops and I did the work ourselves) Mortgage is 557.00 a month including property taxes and home insurance. FTW!

  Now I will at least have something to give my 2 boys when Im gone.

Amazing!
I've been hearing that Texas is amazing as far as cost of living goes. 

 

[jordanhendrix]

^^ Winning!