thank you to all the broke *** MoFo's in my town....

[bonesninja 5,000+ posts]

no my DTI would not be better than 50% but i could handle the payments pretty easily. The banks are just reeling around here right now, i understand them but then again my credit is outstanding and i have the ability to pay and it sucks that they won't give me the money right now.

 

[IamDeMan 5,000+ posts]

its very simple math.....yes you pay yourself back with interest BUT the money borrowed DOES NOT earn like the other money in my retirement. My 401k is growing at a 12.5% rate, the interest i would pay myself is 6%. I lose 6.5% of growth for as long as it takes to repay the loan. I have 25 years til i retire, it is much more important for my money to grow now than it is for a guy with say 5 years left til retirement.

Money grows in the investment you plan to use it for too //content.invisioncic.com/y282845/emoticons/fyi.gif.9f1f679348da7204ce960cfc74bca8e0.gif

You will get an upswing in the future that will more than likely get you more than your fast yields of the 401k. If it is for investment purposes, I still don't understand the hesitation. In 25 years you will more than likely have an opportune time to make this move become good fast cash.

Just my .02. I'd risk it.

 

[2002XLT 5,000+ posts]

no my DTI would not be better than 50% but i could handle the payments pretty easily. The banks are just reeling around here right now, i understand them but then again my credit is outstanding and i have the ability to pay and it sucks that they won't give me the money right now.

Then there is your holdup, doesnt matter if you can make the payment or not, they go by numbers, and if they dont match up, you dont get the loan. I would also imagine that a larger bank might be more willing to help you, over a small bank.

Hell, my DTI was 48% and it was a ***** to get my loan through the underwriters, i had to do all kinds of bullsht. Also had to show that i had 6500 in my account, didnt have to put anything down, just show that i had it.

 

[bimma85 5,000+ posts]

I would also imagine that a larger bank might be more willing to help you, over a small bank.

From talking to other investors, I doubt that will help...probably make it harder.

 

[bonesninja 5,000+ posts]

Money grows in the investment you plan to use it for too //content.invisioncic.com/y282845/emoticons/fyi.gif.9f1f679348da7204ce960cfc74bca8e0.gif
You will get an upswing in the future that will more than likely get you more than your fast yields of the 401k. If it is for investment purposes, I still don't understand the hesitation. In 25 years you will more than likely have an opportune time to make this move become good fast cash.

Just my .02. I'd risk it.

heres the deal....my 25,000 in the account right now ...if i never put a single dime in there with a 12.5% return over 25 years with a 3.0 general inflation rate will yield $475,065. Altho, yes there is potential for returns off the property....probably not as much as the money i have growing right now....i'd rather scrape up the money over the next 8-9 months and do it that way...far less risk and my money is still growing

 

[hoss 5,000+ posts]

Money grows in the investment you plan to use it for too //content.invisioncic.com/y282845/emoticons/fyi.gif.9f1f679348da7204ce960cfc74bca8e0.gif
You will get an upswing in the future that will more than likely get you more than your fast yields of the 401k. If it is for investment purposes, I still don't understand the hesitation. In 25 years you will more than likely have an opportune time to make this move become good fast cash.

Just my .02. I'd risk it.

if you are talking about borrowing against the 401k to buy the house, there is one other thing that you have to consider...

yes, in the long run a house is incredibly likely to get you a substantial gain monetarily. however, you also have to consider that part of that increased value that you will get in the back end will compensate for additional money spent in upkeep and maitenance of the property.

 

[hoss 5,000+ posts]

lol @ your quitting spirit. a bank telling you [no] is like a girl telling you [no]...they really mean [yes] but only with some convincing. I seemed to have missed the part where he said he sat with the branch manager to discuss his finances further and prove he's actually worthy. But of course, it didn't happen...because like they assumed when he walked in -- he'd give up just like the rest of the 62% of teh brokemofo's when things got somewhat difficult.

its not a quitting spirit, its just that i have a very firm grasp of what is going on in the world as far as mortgages, housing, and lending practices go. and believe me, i know first hand as to what is going on in the industry...

banks are hurting like hell right now because of loose lending practices, and they are going to be more strict than neccesary to try and re-coup some of their losses. you going to a bank and talking to the bank manager to ask him to bend their established lending practices is going to yield you nothing right now. unless of course you have the money or other form of equittable collateral. oh wait, thats what the original terms were...

trust me, banks are playing it extra safe because over the last 36-72 months they cashed in on a cash cow that turned around and shit on them.

 

[deaf tones 10+ year member]

more in the long run. i'm actually planning on using the rentals as my "primary" income and using my actual job income to load up my 401k to make a run at early retirement...at which point i will sell all my rentals off and enjoy the down time. I'm also going to school this summer to get my real estate agent license so i can take advantage of what is happening to my town.

401k is not designed to retire early. You'll be slapped with a 10% early withdrawal penalty for dipping into it before teh age of 59.5...unless you retire at age 55. But it sounds like you're trying to retire earlier than that.

 

[bimma85 5,000+ posts]

yes, in the long run a house is incredibly likely to get you a substantial gain monetarily. however, you also have to consider that part of that increased value that you will get in the back end will compensate for additional money spent in upkeep and maitenance of the property.

The maintenance of the property should come out of the rent, not out of his pocket(assuming he bought at the right price).

Another great thing about realestate is LEVERAGE.

You're getting 12.5% interest on your money right now. Say your home is worth 100k and appreciates an average of 4% a year. That first year would equal $4k in appreciation.

Now say you put down $20k, that 20k now earned an extra 4k in appreciation. Equaling a 20% return, not counting any extra tax benefits you may see as well as the extra cash flow each month(assuming you bought right).

 

[bonesninja 5,000+ posts]

wanna retire at 55....i have plans in place for the 4.5 years til i hit 59.5....but in reality, i'll work til i hit 60

 

[hoss 5,000+ posts]

The maintenance of the property should come out of the rent, not out of his pocket(assuming he bought at the right price). Another great thing about realestate is LEVERAGE.

You're getting 12.5% interest on your money right now. Say your home is worth 100k and appreciates an average of 4% a year. That first year would equal $4k in appreciation.

Now say you put down $20k, that 20k now earned an extra 4k in appreciation. Equaling a 20% return, not counting any extra tax benefits you may see as well as the extra cash flow each month(assuming you bought right).

who in their right mind is going to rent a property for more than they could mortgage it for? //content.invisioncic.com/y282845/emoticons/confused.gif.e820e0216602db4765798ac39d28caa9.gif

if he bought at the right price, he could probably rent it out to cover his mortgage and taxes. but the rent (unless he found someone incredibly gullible) is highly unlikely to cover the cost of maitenance of a house... and im not just talking about keeping the lawn trimmed, the exterior clean and in shape. im talking about the unforeseen repairs and upkeep in order to keep unforseen repairs neccesary.

all things considered, you do make money in the owning a home. but at the same time there are expenses that must be considered. these are usually not taken into peoples math though because at the time they are just living expenses //content.invisioncic.com/y282845/emoticons/smile.gif.1ebc41e1811405b213edfc4622c41e27.gif

 

[bimma85 5,000+ posts]

these are usually not taken into peoples math though because at the time they are just living expenses //content.invisioncic.com/y282845/emoticons/smile.gif.1ebc41e1811405b213edfc4622c41e27.gif

Which is why I said IF you buy at the right price. //content.invisioncic.com/y282845/emoticons/smile.gif.1ebc41e1811405b213edfc4622c41e27.gif If you do not factor in random expenses that WILL occur, you're going to taking a loss each month and lose however much of your time that you lose. Real Estate is like anything else, if you don't do your homework...you're probably gonna get burned.

who in their right mind is going to rent a property for more than they could mortgage it for? //content.invisioncic.com/y282845/emoticons/confused.gif.e820e0216602db4765798ac39d28caa9.gif
if he bought at the right price, he could probably rent it out to cover his mortgage and taxes.

It will cover much more than mortgage and taxes(IF he bought at the right price)...

who in their right mind is going to rent a property for more than they could mortgage it for? //content.invisioncic.com/y282845/emoticons/confused.gif.e820e0216602db4765798ac39d28caa9.gif

This is the midwest //content.invisioncic.com/y282845/emoticons/wink.gif.608e3ea05f1a9f98611af0861652f8fb.gif. Do you really think you can find a property in the midwest that will create positive cash flow?

 

[IamDeMan 5,000+ posts]

The maintenance of the property should come out of the rent, not out of his pocket(assuming he bought at the right price). Another great thing about realestate is LEVERAGE.

You're getting 12.5% interest on your money right now. Say your home is worth 100k and appreciates an average of 4% a year. That first year would equal $4k in appreciation.

Now say you put down $20k, that 20k now earned an extra 4k in appreciation. Equaling a 20% return, not counting any extra tax benefits you may see as well as the extra cash flow each month(assuming you bought right).

Thats what I am saying. I think there is much more potentail to turn more money than it will sitting in a 401k if done correctly. It is more of a gamble though, so I can see that point.

 

[hoss 5,000+ posts]

i suppose i am still highly opposed to the idea of renting out a piece of property... but i got shown the very dark side of it very early on... //content.invisioncic.com/y282845/emoticons/crap.gif.7f4dd41e3e9b23fbd170a1ee6f65cecc.gif

if you do get the property and rent it out, make sure you do your homework on the person/people... get references (and actually call them), social security number, DL number, deposit, previous mailing addresses, pull their credit, get their police records... and if you think that is extraneous, it is not. believe me.

 

[bimma85 5,000+ posts]

if you do get the property and rent it out, make sure you do your homework on the person/people... get references (and actually call them), social security number, DL number, deposit, previous mailing addresses, pull their credit, get their police records... and if you think that is extraneous, it is not. believe me.

What are you talking about dude? Everyone one loves having crazy crack out folks that are never gonna pay a dime //content.invisioncic.com/y282845/emoticons/biggrin.gif.d71a5d36fcbab170f2364c9f2e3946cb.gif.

LOL, yes picking the right tenants is a huge part of it.

Thats what I am saying. I think there is much more potentail to turn more money than it will sitting in a 401k if done correctly. It is more of a gamble though, so I can see that point.

If you don't do you homework it is quite the gamble, if you go into it prepared...your chances of success are much higher. Like my buddy always says when he plays poker "scared money don't make money" //content.invisioncic.com/y282845/emoticons/smile.gif.1ebc41e1811405b213edfc4622c41e27.gif.