/biz/ - Business & Finance

[Anonymous No.55824813]

> just over $100k saved
> live in northwest Chicago land Suburb
> make 140k a year collectively with waifu
> own construction company (tiles,flooring,and epoxy)
After lurking here and giving it thought, I came to the conclusion that housing will be more expensive and continue to price people out of owning houses. I want to buy a 350k house, put 20 percent down, and use 20k to fix it up. Afterwards, my monthly payments on a $2300 a month. Is it worth dealing with tenants renting the house out for $2800 making only $500 a month for the next few years until I can sell the house for more money? Should I wait and put more money towards the down payment to make more money monthly in my pocket? Anyone here have any experience with this and can share a tip or two for an autist just starting?

[Anonymous No.55824819]

>>55824813
This fucking faggot again?
Why do all the attention seeking niggers pour out on weekends?

[Anonymous No.55824825]

So you're really buying this chart?

[Anonymous No.55824851]

>>55824819
Suck the shit out of my bowels poor fag.
>>55824825
Were seeing a phenomena where interest is going up but housing won't go down. And if interest keeps going up, rent will just go up more. So I'm kind of in a good spot where I won't lose much (assuming I love in a perfect world with good tenants) renting out the house. Inflation will be impossible to revert, so things will only get more and more expensive.

Tl;DR yeah I guess

[Anonymous No.55824878]

>>55824851
Well, I can't tell you what to do. Just understand if we get a mean reversion on that trend, you could have negative equity, even with 20% down. Which is fucked up, because we're talking like 2017 prices lmao.

[Anonymous No.55824940]

>>55824878
Will this effect the interest or just the price of the house? Because if interest goes up in only works to my favor. And I don't see interest going down anytime soon.

[Anonymous No.55824998]

>>55824940
I'm talking house price, principal. In fact, because interest rates are (relatively) high, in theory the rate is what should drive down price until it equilibrates with what most people can service monthly.

[Anonymous No.55825183]

>>55824998
Housing market is slowest to react to this, so it could take a while to see that. But it is shitty to have high interest and high prices at the moment. So it puts me in a tight spot. I don't want the money saved to sit there and basically lose value due to inflation. But also to lose it to a housing correction.

[Anonymous No.55825969]

>>55824813
>want to buy a 350k house, put 20 percent down
why put 20% down? put as little possible down and still use 20k to fix it up. Who cares about monthly 2,300 or 5,000. Any extra money you have can sit in any account making 5% extra. By the end of the year see how much extra money you have. See if it makes since to pay down on your own or put more into SPY/shitcoins. The interest rate only matters if you plan to pay over 30yrs. Owning a home like a car is mostly a loss or rather compared to actual investing it is an opportunity cost. You are just trying to lose the least amount of money while buying a quality of life. Do you worry about the monthly payments on your credit card? If you do its likely you are struggling to pay off the credit card. Your house is the same. I do believe housing costs will continue to climb, there won't be a crash. Housing up or down is a local affect. Some didnt even notice the 08 collapse. If the house you want is 450k and it drops to 350k and suddenly your able to afford the monthly, you still cant afford the 350k house. Me and my wife make 225k a year and we are buying a house that costs 225. Once I have 500k net worth I will buy a house worth 500k- to 1mil with 5% down. My monthly will be about 5k a month and I wont be able to save as much. There wont be anything to save for because this will be the final house. There will be 50 yr mortgages tons of cosigners. I think the state will become the largest landlord, laws and taxes will change so much. Buying a house that isn't state owned will be too expensive comparatively to a private loan. The US gov already employs 20% of the total employment in the US. Plus the trillions they own in MBS. Shit is going to get real fuct. People will sacrifice economic freedom for economic security.

[Anonymous No.55826042]

>>55824813
>Is it worth dealing with tenants renting the house out for $2800 making only $500 a month for the next few years until I can sell the house for more money?

No, it is worth it if you 10x this so its 5000 a month. You will have to put less down on a house, then use that to secure the loan on the next one and so on and so forth. Now you are completely reliant on interest rates and they will change based on your terms probably every 3-5 years. Its like owning a bunch of cars and you rent them out. To get enough inventory to do this would you spend 1mil to buy all the cars cash. Or use that 1 mil to buy 10times more cars that you can rent out and expand your business. How does the market look, whats the over head, how much time and effort will this take. Do you want to rent lambos to blacks all day? Do you want to deal with people destroying a garbage disposal? How much does a management company cost instead? You can make an extra $500 a month getting more clients, or asking for better pay from job. It would be easier for me to get certs and do my job better than to gamble 100k down on a house that I want to make $500 a month on.

[Anonymous No.55826043]

>>55825183
Short term TBills seems the way to go then. They'll preserve your down payment money and still yield a little bit. The whole high interest+prices has been too confusing to try and figure out, so I've had a down payment's worth of money in those until one of those cracks. With a house I would not be able to afford my monthly expenses so I'm waiting out until prices/rates go down or I can land a higher paying gig.

[Anonymous No.55826113]

>>55824813
Have you seen the project called Blackswan?
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[Anonymous No.55826115]

>>55826043
>I can land a higher paying gig.
saving money will never allow you to make more money .If it took 20yrs to save up 100k, then you can afford a 100k house every 20 years. I've been able to save up 100k in one year and prior to that I had 4k in savings. You just have to make more money. Shitting on yourself for buying things will not help you. Unless your buying 1k hookers and cocaine every night no amount of "saving" is going to help you. Starbucks every day is only 2k a year add more dumbshit to it, lets call it 10k a year. Quit all the things you impulsively buy and in 10 years you will have 100k. 100k is nice and sure we all want that, but would you trade 10years of your life for 100k? Someone has a machine to age you from 20 to 30 and will give you 100k. Do you take it? What about 30 to 40, or 50 to 60? Time is apart of the equation here and everyone focuses just on the money.

[Anonymous No.55826307]

>>55824813
>20k to fix it up
lmao enjoy your new bathroom

[Anonymous No.55826461]

>>55826307
> flooring can be sanded and stained for cheap
> tiles replaced easily
> replace stuff in bathroom
> repaint walls,trim, doors

Pretty reasonable when I have all the tools to do the first two.

[Anonymous No.55826467]

>>55826461

[Anonymous No.55826598]

>>55826042
I'm currently renting a 2 bed/2 bath apartment. I make a good amount where I can live comfortably saving half my money. At least in 2 years, I'll have a lot saved up again. And in the meantime ill have tenants keep up with the payments again on the house. Would paying off the principle with my own money over time and then refinancing it for lower monthly payments be a good idea to get more profit per month? I guess time is not the issue, but I don't want 100k being more worthless over time If inflation keeps going up

[Anonymous No.55826703]

>>55825969
I only want to do 20 percent to avoid the mortgage insurance. It adds up if you don't pay it off. I'm looking to get profit monthly from it, but now that you bring up paying as little as possible, it might not be a bad idea. What if you pay less on the downpayment and put more money into fixing it up to raise the rental price? That way of something goes bad, and the rental is not as good as I thought, I'd be able to either move into it, or sell it for a flip.

[Anonymous No.55826713]

>>55826467

[Anonymous No.55826824]

>>55826703
>mortgage insurance
>paying it off
I can put 5% down and get no PMI. Regardless you are worrying about a few grand over the course of a year. That amounts to getting starbucks everyday or not. You can owe nothing on the house and you still have to pay $300-500 a month in taxes and maintenance fees. It is not worth it to be a landlord unless you have 10+ tenants. Otherwise you are just sort of building a 401k just with more steps.
>What if you pay less on the downpayment and put more money into fixing it up to raise the rental price?
You can put 100k into a 5% CD right now. That doesn't cost 1-2% a year in property taxes, maintenance costs, and omg I hope they pay the rent. There is a ceiling to how high the rent can be. No one that can afford 3k a month wants to live in a place around other homes that cost half that. If you are into fixing shit up and flipping it. Then ya put as little down as possible, fix it up with your own money and effort. That will be 2nd job requiring as much time as your current one. Imo buy a house you want to live in with 5% down, fix it up then in 3-5 years sell it. During that time you could have paid double your mortgage and increased the home value. Worse case scenario value hasn't climb as much as you want. You can refinance the loan for a lower monthly now that you owe less. Keeping your money gives you more options. I'd rather have 60k in my checking account instead of tied up in my house. Suddenly you cant work? You have 60k laying around and you could just stop paying your mortgage file bankruptcy, etc.. If shit hits the fan having 200-500$ less a month mortgage not going to matter.

[Anonymous No.55826928]

>>55826824
Thanks anon. How would you get your tenants then? Would you buy a 3 flat and start with that? Or start with 2 houses at first and rent them out? Flipping gets hard and tiring and I'd rather get passive income for the future. Well start seeing people renting houses instead of buying because it will be too much in the future. I'm trying to take advantage of something so that I don't have to in the future.

[Anonymous No.55826973]

>>55826824
basically, buy house fix it up with your labor for 3-5 years, every month or at end of year pay extra toward your house. Why wait ? Well over time you will see if the area is getting better or if you found a better place for your money like a CD. Labor is 40-80% the cost of fixing up a house. You could spend ~30k and get ~60k kitchen. You've just made 30k tax free because when you sell your house it doesn't get taxed. Increasing the value of your home while not increasing the value of your debt amount. Your loan was for 200k but now the home is work 260k. You have on paper gained 30k. 30k is 11% of 260k. You have now 11% more "down payment" on your home and it cost you 15k. While also still retaining more of your money in a basic savings account getting 4.1% apy.


>>55826928
>How would you get your tenants then?
I have no experience with getting tenants. I would go with people that were friends of friends. I wouldn't want family or anyone I was friends with. They could turn out to be a bad tenant. Making it harder to get them out. I wouldnt compete with the government and big business on renting places out for much of a profit. My inlaws rent my place to me for what they pay in the mortgage. Its cheap for me and it pays their mortgage on this house. Don't expect strangers though to use that and be nice or grateful about it. You have to charge what the market demands unless you know them to be an excellent tenant. Even then its still a opportunity cost.