There are always markets with good margins. And yes, there are a lot of people that have no clue about what they're doing. The Flippers you talk about aren't really "flippers." They are people relying on short-term appreciation. Real flippers buy at under-market value and can hold the property for less than a month. Then sell to people like you who have cash (or hard money) and won't care about seasoning issues.

 

I don't care to pay them off, better to keep your LTV around 16-20% and use the cheap 6% money from your mortgage in a market that will get you 6-8% safely and enjoy that nice fat tax deduction for mortgage interest. Plus if anything ever happens and you need money it is not tied up in a house that you would have to sell or remortgage to get cash in hand.

Whats better a paid in full house worth $500k and no deductions or $400k earning 2-3% above what your mortgage costs you, and a nice $20,000 a year tax deduction? Banks don't help you when your down so get the cheap money now while you still can.

I know you will all say pay off the house but what would you rather have if you lost your job today, a house that you can still pay for and have plenty of cash in hand that is making you money or deal with trying to get cash in hand to pay for all of your daily exspenses?

 

With property taxes as high as they are now you never really own the house anyway. It's more of a fuedal system where you pay your yearly rent to the lords.

I agree with your assesment but there is something refreshing about never paying a DIME in interest. Even the evo is finainced at 0%. I can't really put a price on it.

Also you have to be disciplined enogh to save the money you are saving so you don't run into the liquidity crunch you guys described above.

I have a very long document that explains what you talk about in detail. Makes a very strong case. If anyone has any interest in it feel free to PM me.

 

I hate property taxes mine just came in and now with no mortgage I have to pay them all at once every November. It really hurts and at this time of year it sucks too.

TurboTrix is coming down to tune a bunch of cars in a few days and I was planning on getting some bigger Injectors and Water Methanol with a new Flash. Now that isn't going to happen. Taxes really suck!

-Nate

 

My townhouse is payoff, but its being sold to get a bigger house

 

Def. true ...I own my house , my evo, and my supercharged SRT10 Viper. I avoid posting alot because I dont want a 16 years old making fun of what I say when he is the one who needs guidance. I am 27 by the way and I red all the good posts ...when I have time

 

Check with your city, many will allow payments over 6 months after the bill is due if you are paying over X amount. Our city does this for the Summer tax bill Due in August, I can make payments at zero interest OR fees for the following 6 months. Our taxes are a little high here, just the summer bill runs about $7000.

 

Decent houses here are 500K usd up,how the hell should i pay this as a average worker?

..and secondly i dont want to work 40 years for brick and stone.

 

I dont know.... I wonder the same thing as well....just start small, buy a small condo/coop and wait for the value to grow then sell it and buy a bigger house.

On the other hand if you are married and have a combined income of $100K or more, you should be able to afford something decent as well.

Everyones case is different. For people buying $500,000 houses they should be able to put 20% down otherwise they may have to pay mortgage insurance in case they default. 20% of 500K is a huge chunk of cash that the majority of Americans do not have in their savings accounts.

The only way to do it is to save your money work hard, or just be lucky enough to receive an inheritance.

Many of my friends have gotten rich, or gotten it easy since their familes are already wealthy. It would make logical sense for a father to pass down his business or wealth to his son....

I can go on and on, since I work in banking and have dealt with mortgages, home equities, etc. And I've dealt with people from many different financial walks of life.

The only thing now is that with my current job I deal with wealthy people. I normally see people with $300K to well over $9 million dollars in their accounts. And a lot of times I can feel envious being a little joe just making over $40K a year and wonder how they got wealthy, but hey, some people have it made....

I'm looking to start a job by the end of december that will play me close to $75-80K a year. Maybe my dream of home ownership will one day come true.

 

Just remember that timing is everything and real estate DOES go down.

 

i bought my house 3 months ago 370k and before i moved in the house allready went up 25k im lovin it best investment ever

 

I remember thinking the exact same thing during the last real estate rush in 1988 when I bought mine. Two years later: CRASH. Couldn't give it away.

 

awesome!!!!!

in 1970 martha stewart bought her house/ranch in CT for $50,000.00

Today in 2005 it is worth $10,000,000.00 !!!!!!

 

good post blue evo 8...

I know those things,but you know it seems like almost impossible with 40k-50k per year to buy a house...

 

the best part about it i live like 5 mins from my job