Philadelphia's Classiest Drunkards
Mark, you make a good point. Owning is better than renting, there's no debate about that. But no one goes into a home thinking they will move out in 5 years. There's little that can be had for $150k. And your scenario doesn't account for monies that you reinvest into a home. The market right now is a buyer's market, if and only if you have the means. Credit is tighter in general, and only those with good history will get decent interest rates with a low downpayment. Flipping homes are one thing, buying one to live is another.
I don't know what stuff goes for out there in the sticks, I was just throwing around round numbers. I wouldn't suggest trying to 'flip' anything in this market, but if you're looking for a good long term 'investment' I think real estate is tough to beat.
Having just said that; Cupcake has been flipping houses for about a year now and is doing very well for himself. He has to invest a considerable amount of time and money and time and money and money, but his ROI is hard to deny. Thats the reason why he is done racing for the season, because he has a flip he has to finish before February.
Having just said that; Cupcake has been flipping houses for about a year now and is doing very well for himself. He has to invest a considerable amount of time and money and time and money and money, but his ROI is hard to deny. Thats the reason why he is done racing for the season, because he has a flip he has to finish before February.
you should get all those costs, or at least an estimate of them, with your good faith estimate. I suggested a condo initially because for a fee you can have all those 'responsibility costs' you mentioned taken care of.
PMI is still PMI, no way around that. There are however loans out there currently that require VERY little down for first time, owner occupied homes. see below.
A guy I work with who is 24 just bought his first house in May of this year. Purchase price was less than $150k and he only had to show up to closing with a $1,700.00 check. He got something like $14k in seller assists. IN fact, if it wasn't for the 2% property transfer tax in the city of Phila he said they would have actually had to cut him a check for a few hundred dollars at closing.
He has a traditional 30yr fixed mortgage @ about 4.35%, so its not some silly 1yr ARM or anything. Banks are giving out loans to qualified people and they also have a TON of homes on their books they need to move, so there are oppertunities out there if you look around.
you're buddy must have bought right before the bubble burst. I know some people in the same situation and its unfortunate. I was on the other side of the bubble since I bought my first rental property in 2001 and sold it in '08 for more than double what I paid.
The home I'm in now I got in 2004 and its currently valued at over 40% our purschase price even after the bubble burst. If you are smart/realistic you can make money/not lose money in this market. Its very hard to make a quick buck, but you can make money.
That is one way of looking at it, but there is another way too...
If you figure on paying rent for say 5yrs @ $1000/mo you'll be out roughly $60k, not including security deposit, electric and/or any other utilties you have to pay. That number is with the landlord not raising your rent (which is unlikely). At the end of those 5 years you will walk away with nothing to show for it other than dumping $60k worth of your money into paying off your landlords note. That is what you're doing when paying rent afterall, you're paying someones bank note for them.
Now, if you were to get a mortgage for a place that costs $150k, put 5% down and finance the rest for 30yrs @ 3.8%apr (including closing costs @ 5%, pmi @ .5%, taxes@ $2.5k/yr and insurance @ $750/yr) your payments would be roughly $1k per month. After 5 years, and paying $60k in total, you would have over $30k worth of equity in your home (assuming the vaule didn't increase at all, which is very unlikely for 5 years even in this economy). So when you go to leave, either sell or rent it out, you would get a check for more than $20k after commission to use as a nice down payment on your next home.
These figures are based on getting no kind of first time home buyer assistance, not taking into account the deductions/depreation/tax breaks you get as a home owner each year, not counting increasing property value, equity accelerator programs, ect.
The flip side to all this is that you dont EVER have to sell. In five years if you want to move out all you have to do is RENT the place to someone for an amount that covers your mortgage/expenses and BAM you have an instant equity builder year after year. Not to mention a home is considered an asset which can be benifical if you're trying to do other things like get a home equity loan, HELOC (home equity line of credit), ect.
Dont take my word for it, talk to a realtor or lender and let them crunch the numbers for you. If it doesn't work then it doesn't and you didn't lose anything... if it does work then you could be in a much better position 5 years down the road if/when you decide to get a bigger/better place. I am speaking from experience here. I know for sure I wouldn't be in the position I'm in now if I rented another apartment @ 21 instead of buying that first duplex.
PMI is still PMI, no way around that. There are however loans out there currently that require VERY little down for first time, owner occupied homes. see below.
A guy I work with who is 24 just bought his first house in May of this year. Purchase price was less than $150k and he only had to show up to closing with a $1,700.00 check. He got something like $14k in seller assists. IN fact, if it wasn't for the 2% property transfer tax in the city of Phila he said they would have actually had to cut him a check for a few hundred dollars at closing.
He has a traditional 30yr fixed mortgage @ about 4.35%, so its not some silly 1yr ARM or anything. Banks are giving out loans to qualified people and they also have a TON of homes on their books they need to move, so there are oppertunities out there if you look around.
you're buddy must have bought right before the bubble burst. I know some people in the same situation and its unfortunate. I was on the other side of the bubble since I bought my first rental property in 2001 and sold it in '08 for more than double what I paid.
The home I'm in now I got in 2004 and its currently valued at over 40% our purschase price even after the bubble burst. If you are smart/realistic you can make money/not lose money in this market. Its very hard to make a quick buck, but you can make money.That is one way of looking at it, but there is another way too...
If you figure on paying rent for say 5yrs @ $1000/mo you'll be out roughly $60k, not including security deposit, electric and/or any other utilties you have to pay. That number is with the landlord not raising your rent (which is unlikely). At the end of those 5 years you will walk away with nothing to show for it other than dumping $60k worth of your money into paying off your landlords note. That is what you're doing when paying rent afterall, you're paying someones bank note for them.
Now, if you were to get a mortgage for a place that costs $150k, put 5% down and finance the rest for 30yrs @ 3.8%apr (including closing costs @ 5%, pmi @ .5%, taxes@ $2.5k/yr and insurance @ $750/yr) your payments would be roughly $1k per month. After 5 years, and paying $60k in total, you would have over $30k worth of equity in your home (assuming the vaule didn't increase at all, which is very unlikely for 5 years even in this economy). So when you go to leave, either sell or rent it out, you would get a check for more than $20k after commission to use as a nice down payment on your next home.
These figures are based on getting no kind of first time home buyer assistance, not taking into account the deductions/depreation/tax breaks you get as a home owner each year, not counting increasing property value, equity accelerator programs, ect.
The flip side to all this is that you dont EVER have to sell. In five years if you want to move out all you have to do is RENT the place to someone for an amount that covers your mortgage/expenses and BAM you have an instant equity builder year after year. Not to mention a home is considered an asset which can be benifical if you're trying to do other things like get a home equity loan, HELOC (home equity line of credit), ect.
Dont take my word for it, talk to a realtor or lender and let them crunch the numbers for you. If it doesn't work then it doesn't and you didn't lose anything... if it does work then you could be in a much better position 5 years down the road if/when you decide to get a bigger/better place. I am speaking from experience here. I know for sure I wouldn't be in the position I'm in now if I rented another apartment @ 21 instead of buying that first duplex.
Wet Hop Beers > Pumpkin Beers
I'll be out of town, but for anyone interested HERE are the details.
When it comes to Fall Seasonals,
Wet Hop Beers > Pumpkin Beers
I'll be out of town, but for anyone interested HERE are the details.
Wet Hop Beers > Pumpkin Beers
I'll be out of town, but for anyone interested HERE are the details.
I cant believe this just happened. Had a guy just came in work with a 06 xlr 186k miles he said he got it painted at maaco and had them do the wheels. I had to say it looks cool so I could snap these pictures. Enjoy
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I don't know what stuff goes for out there in the sticks, I was just throwing around round numbers. I wouldn't suggest trying to 'flip' anything in this market, but if you're looking for a good long term 'investment' I think real estate is tough to beat.
Having just said that; Cupcake has been flipping houses for about a year now and is doing very well for himself. He has to invest a considerable amount of time and money and time and money and money, but his ROI is hard to deny. Thats the reason why he is done racing for the season, because he has a flip he has to finish before February.
Having just said that; Cupcake has been flipping houses for about a year now and is doing very well for himself. He has to invest a considerable amount of time and money and time and money and money, but his ROI is hard to deny. Thats the reason why he is done racing for the season, because he has a flip he has to finish before February.