I am glad I kept my condo in Altadena and rented it, it's worth almost half a million now! I bought it for $100K! If it weren't for that and a few other investments I would not be able to be sitting here chatting away right now! LOL! Cheers as well to early retirement!
I am glad I kept my condo in Altadena and rented it, it's worth almost half a million now! I bought it for $100K! If it weren't for that and a few other investments I would not be able to be sitting here chatting away right now! LOL! Cheers as well to early retirement!
Good for you man! I wish I would of bought in Downtown L.A. 5 years ago so I could of done the same thing!
I've bought and sold 3 houses all around SoCal in the past 5 years and now I'm getting the itch to buy another. The cash is so gooooood, certainly keeps things comfortable as well as not worrying about payments on my G.
I had a chance to buy on Maui in 2001 for what was a ridiculously high price. Those prices rose 69% in the past year to now insanely stupid prices. I'm bummed.
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Now I'm just laid bad - G35Princess
R.I.P. MBC
Good for you man! I wish I would of bought in Downtown L.A. 5 years ago so I could of done the same thing!
I've bought and sold 3 houses all around SoCal in the past 5 years and now I'm getting the itch to buy another. The cash is so gooooood, certainly keeps things comfortable as well as not worrying about payments on my G.
I don't know how you guys can do that. I finally have a renter settled in my house in AZ and the whole process from buying to renting was so crazy to me that I'd rather not do it again anytime soon... although my dad is trying to convince me to.
Of course this was also the first time i've ever sold/rented anything so that may have something to do with it *^__^*
It depends on how much money you want to make. I wanted to generate immediate cash flow. So I bought and sold rather quickly. My best transaction allowed me to walk away with close to 40K in my pocket. After I paid out debts, I still had a hunge chunk of change left over. Or you could hold onto it and make even more money when you sell it. Real estate is great like that for the property value will appreciate. You may be able to get back twice what you paid for it.
I assume this is a brand new tract home in an aspiring new housing tract in Arizona. If you hold onto it for a few years you won't have to worry about the capital gains tax too (I think it's 3 years minimum).
You also have to remember, owning a single property doesn't give you tangible profit. If your home appreciates 15% a year and you sell it, you have to buy another one to move into. The house you move into appreciated 15% a year too (assuming you didn't remodel or move to a different market), so you don't get to walk into a better home or a pocket of money.
The trick is to buy that 2nd Home Beanie and you'll feel so much better about the hassle. Also, your first home is always a pain in the ass and pretty scary. Your second home is a piece of cake. The loan process is easier and you know what to expect.
Do the math and you'll become inspried. If you buy a 200k property that appreciates 12% a year, you're making an extra 24k a year. 12% is pretty modest. Mine went up 18-26% last year.
I don't know how you guys can do that. I finally have a renter settled in my house in AZ and the whole process from buying to renting was so crazy to me that I'd rather not do it again anytime soon... although my dad is trying to convince me to.
Of course this was also the first time i've ever sold/rented anything so that may have something to do with it *^__^*
Get a realtor to handle it for you. Sure you need to pay them a percentage or flat fee, but they are the professionals.
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Now I'm just laid bad - G35Princess
R.I.P. MBC
sorry, I meant rented, sold, bought, any of the above
I have no idea what to do with the house I bought so i'm renting it out for now. Trying to decide if it's better to keep it or sell it
Depends on the market. In my case I could have rented the property for whatever I asked. That would have been enough to cover the mortgage, upkeep, realtor fees, insurance, etc.. I just didn't feel that the market was going to keep going up the way it did. Now if the market bottomed out, then I'd have been in trouble.
Take a serious look at the area you are in. If you truly feel the housing will keep climbing, then you are probably better off keeping the property. The one caveat is you need to pick the right renters. The wrong ones will kill your house and be deadbeats on your monthlies.
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Now I'm just laid bad - G35Princess
R.I.P. MBC
It depends on how much money you want to make. I wanted to generate immediate cash flow. So I bought and sold rather quickly. My best transaction allowed me to walk away with close to 40K in my pocket. After I paid out debts, I still had a hunge chunk of change left over. Or you could hold onto it and make even more money when you sell it. Real estate is great like that for the property value will appreciate. You may be able to get back twice what you paid for it.
I assume this is a brand new tract home in an aspiring new housing tract in Arizona. If you hold onto it for a few years you won't have to worry about the capital gains tax too (I think it's 3 years minimum).
yup, it was a new community that was/is being developed outside of Phoenix. I was lucky to get into the first phase of the development and by the time they were finishing selling the last phase, my same house was going for about double what I paid.
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Originally Posted by basetecchild
The trick is to buy that 2nd Home Beanie and you'll feel so much better about the hassle. Also, your first home is always a pain in the ass and pretty scary. Your second home is a piece of cake. The loan process is easier and you know what to expect.
thats for sure @ pain in the ass. I had noooo clue what I was doing. I'm just surprised I qualified for the loan in the first place. I didn't think I had that much of a credit history - other than credit cards and I had just bought the G which made it even worse... Won't the fact that I have one property make it more difficult to purchase another one? At least I would think it would.
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Originally Posted by GZire
Get a realtor to handle it for you. Sure you need to pay them a percentage or flat fee, but they are the professionals.
My dad is a realtor and someone in his company is a realtor in AZ so I was working with both of them on it. But my dad tried to make me do as much of it as possible so i'd know for future use.
Beanie, I'd hold on to the house for now unless you come across the situation where you really need the money. The equity that is building is great! You will make a very nice chunk of change once you flip it 3 to 5 years from now. You cold then buy something for your own in SF, now that would be nice!
[quote=beanie]Won't the fact that I have one property make it more difficult to purchase another one? At least I would think it would. [quote]
It's like that with depreciating entities like cars and credit card debt, but homes appreciate, so banks have a low risk if you default on your loan. It's easier to get a home loan than any other because of that fact. If you forclose in a year, they can sell it and make a profit. If you stop paying your car payment, the bank won't get that money back because the value has decreased faster than you paid it off.
In my state, the easiest way to buy your first rental is to have a tenant and a signed lease before the purchase. I had a couple buddies sign a lease for a prospective rental and that's how I got started with my first rental. You don't even have to do that. If you're already renting your first home out, then you can already use that as proof of income.
I think it might depend on which state you live in and what lender you choose, but you can own as many houses as you want, as long as you keep your debt to income at a certain level. In my experience, I rent my homes for 20% over my cost. So if I have a $1000 mortgage on a rental, I rent it for $1200/mo. and that keeps my debt to income at a neutral level so I can keep buying. If I charge less than a 20% profit, it will count against my debt to income ratio.
Also, regarding DTI (debt to income), there are MANY different ways around that like stated income, no ratio, no doc etc. Some investors do not claim full rents on their taxes or just don't want to provide them. No problem. I can actually do 80/20 financing to 100% with a no doc at a decent rate. No doc= no income, no employment, no asset disclosure- bascially just a credit and collateral loan.
If I were you Beanie, I would hold onto that house in AZ for a while longer. Let it cash flow for awhile while it appreciates. The housing market in AZ seems to be pretty good. On the plus side, you can do some VERY cool things with your taxes just by having an investment property.
If it weren't for that and a few other investments I would not be able to be sitting here chatting away right now! LOL! Cheers as well to early retirement!
