All Encompassing Mortgage and Real Estate Thread

[Captainant 28575]

19 hours ago, Neonmoon said:

Office space isn't doing well

 

 

it's almost like RE prices are unrealistically inflated and "the market" is reacting

[Wulaw Horn 19598]

1 hour ago, Captainant said:

it's almost like RE prices are unrealistically inflated and "the market" is reacting

Office spaces?  

More like the way that we decided that we were going to work fundamentally shifted after a massive global pandemic that dislocated life in a lot of ways.  

[jimmyjazz 47244]

Why the spike in Q4 2021 in the first place?  A "back to the office" flood of workers?

[Wulaw Horn 19598]

4 minutes ago, jimmyjazz said:

Why the spike in Q4 2021 in the first place?  A "back to the office" flood of workers?

Maybe? And basically 6 quarters of demand pushed into that one quarter because that was more or less when we decided we were over this thing?  That's a guess but it makes sense to me. 

[gurt 796]

when do we think house prices will start going back in the Austin metro?  We bought only a year ago in West Buda (thanks Wulaw), and it is quite nice and we've enjoyed living here so far...but idk if either of us can take too many more summers around here.  This is all quite hypothetical at this point, but if we were to sell right now we would lose money, seeing how we bought right before the rates turned everything over.  Just wondering how long the experts around here think we have before we start to see things go up modestly.  I'm sure rates going back down is a big part to play.

[Wulaw Horn 19598]

5 minutes ago, gurt said:

when do we think house prices will start going back in the Austin metro?  We bought only a year ago in West Buda (thanks Wulaw), and it is quite nice and we've enjoyed living here so far...but idk if either of us can take too many more summers around here.  This is all quite hypothetical at this point, but if we were to sell right now we would lose money, seeing how we bought right before the rates turned everything over.  Just wondering how long the experts around here think we have before we start to see things go up modestly.  I'm sure rates going back down is a big part to play.

Don't give up on this summer yet- supposed to be wetter and milder. Ha.  Haha.  Hahaha.  

Nationwide prices have started to rebound the last couple months and the projections (again, nationwide) are up 5% this year.  Take that FWIW, even if not Austin specific.  Rates easing down would also help. I'd target March- May of 2024 at least to hold onto.  Should get some appreciation.  Rates should be better. That should kick off more appreciation.  

That's a guess based upon some national statistics, people I think are smart, and trying to read my own dusty crystal ball. I'm sure there are some more doomish on here than that. And some probably more optimisitc.  

[gurt 796]

Don't give up on this summer yet- supposed to be wetter and milder. Ha.  Haha.  Hahaha.  
Nationwide prices have started to rebound the last couple months and the projections (again, nationwide) are up 5% this year.  Take that FWIW, even if not Austin specific.  Rates easing down would also help. I'd target March- May of 2024 at least to hold onto.  Should get some appreciation.  Rates should be better. That should kick off more appreciation.  
That's a guess based upon some national statistics, people I think are smart, and trying to read my own dusty crystal ball. I'm sure there are some more doomish on here than that. And some probably more optimisitc.  

Thanks man. Realistically we wouldn’t be doing this until for 2-3 more years if we’re being honest with ourselves, but when the heat index is 115 you start day dreaming about gtfoing.
Whenever we do pull the trigger I know who we’ll be working with on the next mortgage.

[Wulaw Horn 19598]

7 minutes ago, gurt said:

Thanks man. Realistically we wouldn’t be doing this until for 2-3 more years if we’re being honest with ourselves, but when the heat index is 115 you start day dreaming about gtfoing.
Whenever we do pull the trigger I know who we’ll be working with on the next mortgage.

Thanks man.  I wouldn't worry about having lost money 2-3 years from now.  You can be down 1 year (like you might be) but it's hard to be down year 3 or 4 in almost any market cycle in a non-shithole area.  CenTex is too popular a region to stay down for long, imo.  Rust Belt?  sure.  A place with desirability and scarcity? That seems hard to imagine. Especially if the national trend is positive which it is supposed to be. 

[Neonmoon 38130]

I know early in the year many were spouting rosy prognostications of 5% or 5.5% rates by end of year 2023, but Goldman Sachs is now forecasting 6.4% by EOY 2023, and Mortgage Bankers Association says 5.8%

What say ye?

[Wulaw Horn 19598]

11 minutes ago, Neonmoon said:

I know early in the year many were spouting rosy prognostications of 5% or 5.5% rates by end of year 2023, but Goldman Sachs is now forecasting 6.4% by EOY 2023, and Mortgage Bankers Association says 5.8%

What say ye?

I've given up hope of winning my bet.  I thought we were going to see this driven down in the 3rd and 4th quarter but I'm betting now on 1st and 2nd quarter of next year.  Keep in mind 6.4 and 5.8% still would represent positive steps both from the first of the year and today.
Question- do you see a recession coming?  I do. All the technical measures are screaming recession and the only thing economically "good" right now is employment which is a lagging indicator.  Recessionary conditions push down interest rates (generally) as fewer dollars are chasing goods. Also- the fed will probably hop right in with quantatative easing again, at some point in time, which is good for bond/MBS markets generally and should mean downward pressure on rates. I've been wrong on timing for a year now though, so my crystal ball is at least cracked.  

 

What is your thought on this? 

BTW-  Habib is saying everything I just said.  I got back last week from my top 1% conference with Pennymac with some pretty sharp people and talked to one of their guys in charge of the wholesale channel pretty extensively at dinner and he's saying 1st/2nd quarter next year.  

They are projecting 1.4T in total mortgages and a 9% refinance number.  Basically his take was he never in his life expected to see a market this shitty and it's grim AF out there.

Here I thought I was getting killed this year and felt like the lone ranger driving the struggle bus by myself and when they showed me how to look at the leaderboard for the company I'd fallen from 9th in units all the way down to 16th or something like that.  Out of 1100 originators.  In a brokerage that only hires people that have actually closed a loan- putting them talking about already the top 50 percentile in the industry.  So, yeah, it's ugly ugly ugly. But supposed to get better.  Eventually.  Maybe.  in the first half of 2024. And I seriously considered driving Uber for a bit earlier in the year.  

[UTPhil2006 3930]

Until there is a better political picture we are stuck in the 6.0 range 

[Neonmoon 38130]

12 minutes ago, Wulaw Horn said:

I've given up hope of winning my bet.  I thought we were going to see this driven down in the 3rd and 4th quarter but I'm betting now on 1st and 2nd quarter of next year.  Keep in mind 6.4 and 5.8% still would represent positive steps both from the first of the year and today.
Question- do you see a recession coming?  I do. All the technical measures are screaming recession and the only thing economically "good" right now is employment which is a lagging indicator.  Recessionary conditions push down interest rates (generally) as fewer dollars are chasing goods. Also- the fed will probably hop right in with quantatative easing again, at some point in time, which is good for bond/MBS markets generally and should mean downward pressure on rates. I've been wrong on timing for a year now though, so my crystal ball is at least cracked.  

 

What is your thought on this? 

BTW-  Habib is saying everything I just said.  I got back last week from my top 1% conference with Pennymac with some pretty sharp people and talked to one of their guys in charge of the wholesale channel pretty extensively at dinner and he's saying 1st/2nd quarter next year.  

They are projecting 1.4T in total mortgages and a 9% refinance number.  Basically his take was he never in his life expected to see a market this shitty and it's grim AF out there.

Here I thought I was getting killed this year and felt like the lone ranger driving the struggle bus by myself and when they showed me how to look at the leaderboard for the company I'd fallen from 9th in units all the way down to 16th or something like that.  Out of 1100 originators.  In a brokerage that only hires people that have actually closed a loan- putting them talking about already the top 50 percentile in the industry.  So, yeah, it's ugly ugly ugly. But supposed to get better.  Eventually.  Maybe.  in the first half of 2024. And I seriously considered driving Uber for a bit earlier in the year.  

As I've previously said, I see higher for longer. Older people are living longer, Millennials are bigger generation than Gen X, and we underbuilt housing for a decade. There is no easy fix to the inventory issue. Lower rates will heat up the market back to the multi-offer over ask cycle, but that's about it. 

I think rates will continue to trend downward, but glacially. Stuck in the 6s for the foreseeable future. There's just too much gas waiting to juice the economy every time the Fed thinks about lowering a rate. So I believe them when they say don't expect a QE until 2025. At the beginning of this year, 2 rate decreases were priced in the market. Now, none are, and there are probably at least 2 more left. 

I think Habib follows it pretty well, but no one can predict the market. He was saying mid-5s by now, CIRCLE May 10th! But he can't predict the Bank Crisis or the Debt Ceiling. No one can. Or any other shit that will pop up. But part of his job requires selling sunshine. You can't sell bad news all the time, no one will buy it. Will things flip and we're back in the low 5s in the fall. who the fuck knows? 

And regarding the struggle bus, we're all on it. I felt the same as you. I finally switched companies (remember I was thinking about it), and my new regional manager gave me access to his MMI. Holy shit, I look up real estate agents and LOs, everyone is struggling. A LOT. I'm not doing shit for business, and I'm beating people that have been in the business 20 years, etc.

 

[Wulaw Horn 19598]

3 minutes ago, Neonmoon said:

As I've previously said, I see higher for longer. Older people are living longer, Millennials are bigger generation than Gen X, and we underbuilt housing for a decade. There is no easy fix to the inventory issue. Lower rates will heat up the market back to the multi-offer over ask cycle, but that's about it. 

I think rates will continue to trend downward, but glacially. Stuck in the 6s for the foreseeable future. There's just too much gas waiting to juice the economy every time the Fed thinks about lowering a rate. So I believe them when they say don't expect a QE until 2025. At the beginning of this year, 2 rate decreases were priced in the market. Now, none are, and there are probably at least 2 more left. 

I think Habib follows it pretty well, but no one can predict the market. He was saying mid-5s by now, CIRCLE May 10th! But he can't predict the Bank Crisis or the Debt Ceiling. No one can. Or any other shit that will pop up. But part of his job requires selling sunshine. You can't sell bad news all the time, no one will buy it. Will things flip and we're back in the low 5s in the fall. who the fuck knows? 

And regarding the struggle bus, we're all on it. I felt the same as you. I finally switched companies (remember I was thinking about it), and my new regional manager gave me access to his MMI. Holy shit, I look up real estate agents and LOs, everyone is struggling. A LOT. I'm not doing shit for business, and I'm beating people that have been in the business 20 years, etc.

 

Congrats man, good for you.  Yeah- that was my headline take away at 1.4T in originations this year.  That's down from between 4-5T in 2020/21 each year.  It's not great. I think you are overly pessimistic but maybe I'm hoping more than anything sound, and everyone I talk to that has good news is wishcasting as well. I actually think Habib should have been right and it's irrational that we haven't seen a bigger move down right now.  

[UTPhil2006 3930]

2 minutes ago, Wulaw Horn said:

Congrats man, good for you.  Yeah- that was my headline take away at 1.4T in originations this year.  That's down from between 4-5T in 2020/21 each year.  It's not great. I think you are overly pessimistic but maybe I'm hoping more than anything sound, and everyone I talk to that has good news is wishcasting as well. I actually think Habib should have been right and it's irrational that we haven't seen a bigger move down right now.  

I don’t think he said anything wrong, certainly not for an attack. Again plan for 6 pray for 5 

[Wulaw Horn 19598]

17 minutes ago, UTPhil2006 said:

I don’t think he said anything wrong, certainly not for an attack. Again plan for 6 pray for 5 

OH no- I was actually congratulating him on going to a new company and doing better than guys in the business for 20 years.  It was legit saying keep up the good work and sincere. 

Then I was saying I think I disagree with him and saying I could just be full of it and hoping for better and that's what the people who are predicting better are also hoping for. 

 

[Neonmoon 38130]

He wasn’t attacking. My baseline is pessimistic asshole. But I agree, I expect 6 but pray for 5

[LCHorn 2751]

What kills me is seeing my jumbo rates are  .50% worse (or more) than what the depository banks are advertising on their websites.  

[UTPhil2006 3930]

2 hours ago, LCHorn said:

What kills me is seeing my jumbo rates are  .50% worse (or more) than what the depository banks are advertising on their websites.  

I feel like jumbo has been less reactionary too is the scary part 

[Neonmoon 38130]

3 hours ago, LCHorn said:

What kills me is seeing my jumbo rates are  .50% worse (or more) than what the depository banks are advertising on their websites.  

ARMs are dogshit too 

[Wulaw Horn 19598]

14 hours ago, UTPhil2006 said:

I feel like jumbo has been less reactionary too is the scary part 

For sure. It’s been a slower and steadier climb. Until banks started blowing up. 

[babysdaddy 2731]

Got a 5/1 jumbo at 6% (sorry guys around here, got a couple of clients at a certain bank and needed to use them).  Assume I'll be able to refi that prior to the 5 year term being up (or pay it off) at a rate significantly below 6%.

[tx 3 putt 78725]

On 6/26/2023 at 2:08 PM, UTPhil2006 said:

Until there is a better political picture we are stuck in the 6.0 range 

do business with this man. When @UTPhil2006 refinanced me at 2.65%, he called me and brought it up. I had no clue, I wasn’t tracking rates. He knew my present rate, He explained it to me, showed me the savings and took care of everything else. I had to show up to sign papers. 
 

 

Edited June 27, 2023 by tx 3 putt

[Gil Bang 26247]

So, I'm trying to get a listing, and it's a fucking mess.  Lesbian breakup.  "B" came in with all the cash, $61,000.   They broke up, B moved out, A stayed, and A is now behind on mortgage and HOA, but refuses to sell.  She told me "I like it here, I'm staying".  How the fuck she plans to stay without making the payments I don't know.  I told B that she needs to lawyer up immediately. 

[StassneyHorn 6780]

Saw this today and thought I’d share. Not sure how San Antonio made the list, but wanted to see if you TX guys have noticed Airbnb sellers.

https://www.newsweek.com/airbnb-revenue-collapse-housing-market-crash-fears-1809543
 

 

[MAUFRAIS 6745]

Donald glover good gif

[LCHorn 2751]

I don't want to exaggerate my personal experience financing Air Bnb's such that it's representative of all buyers, but most of the ones I've financed are second homes or properties in 78702, Riverside, University Hills, etc.  I can't imagine a single one of those renting for less than $2500 a month and that's on a 12 month lease.  I've probably closed 100+ loans for investors over the past 3 years and most of them were for investors seeking long-term tenants. 
 

We have two rental properties and were able to obtain the same rental amount as last year, too (and one just got leased to a new tenant).  We're still getting pinched on profit because apparently TCAD thinks the values rose 10%+ over 2022 but I'm not seeing a catastrophic loss in rents due to excess supply. 

[Wulaw Horn 19598]

19 hours ago, babysdaddy said:

Got a 5/1 jumbo at 6% (sorry guys around here, got a couple of clients at a certain bank and needed to use them).  Assume I'll be able to refi that prior to the 5 year term being up (or pay it off) at a rate significantly below 6%.

I would bet so. 
that’s a great rate in this day and age. 

[Wulaw Horn 19598]

17 hours ago, Gil Bang said:

So, I'm trying to get a listing, and it's a fucking mess.  Lesbian breakup.  "B" came in with all the cash, $61,000.   They broke up, B moved out, A stayed, and A is now behind on mortgage and HOA, but refuses to sell.  She told me "I like it here, I'm staying".  How the fuck she plans to stay without making the payments I don't know.  I told B that she needs to lawyer up immediately. 

Yeah- in California she can stretch it out to like a couple years probably before the foreclosure people catch up to her, right?  If it’s not her cash in there and they are underwater (or quickly getting there as the payments stack up) what does she care?  

[Wulaw Horn 19598]

32 minutes ago, LCHorn said:

I don't want to exaggerate my personal experience financing Air Bnb's such that it's representative of all buyers, but most of the ones I've financed are second homes or properties in 78702, Riverside, University Hills, etc.  I can't imagine a single one of those renting for less than $2500 a month and that's on a 12 month lease.  I've probably closed 100+ loans for investors over the past 3 years and most of them were for investors seeking long-term tenants. 
 

We have two rental properties and were able to obtain the same rental amount as last year, too (and one just got leased to a new tenant).  We're still getting pinched on profit because apparently TCAD thinks the values rose 10%+ over 2022 but I'm not seeing a catastrophic loss in rents due to excess supply. 

Same. I don’t know anyone who has a decent one that’s complaining at all. 
I flat don’t buy those numbers. You can’t get a hotel room for 1/2 that in a lot of those places. 

[Incredulity 11879]

20 minutes ago, Wulaw Horn said:

You can’t get a hotel room for 1/2 that in a lot of those places. 

Anecdotally, my experience over the last 3 years has been that AirBnB costs are pretty close to the same as hotel.  Obviously there are many, many variables.

AirBnB used to be a kick ass value.  Nice, clean places for significantly less than a hotel.  

[Wulaw Horn 19598]

22 minutes ago, Incredulity said:

Anecdotally, my experience over the last 3 years has been that AirBnB costs are pretty close to the same as hotel.  Obviously there are many, many variables.

AirBnB used to be a kick ass value.  Nice, clean places for significantly less than a hotel.  

That was sort of my point on not buying the numbers.  Either that or those places just aren't getting rented out at all which seems kind of dubious to me.  Who knows.  Maybe I'm an idiot for thinking the market is better than that. 

[Dbeasy 15609]

On 6/6/2023 at 1:27 PM, Esque said:

@Chopper -

CRE debt is usually 2, 3, 5, 7, or 10 year terms.  The longer the term, the more punitive the pre-payment penalty.  Lots of GPs took on short-term debt in hopes of a quick exit and now find themselves caught in a rate hike cycle.

@gmr548 -

There's going to be different types of distress in different product types.  As you stated, office has some fundamental headwinds.  Meanwhile, multifamily and industrial have capital markets headwinds as a result of GPs paying too much for assets and being far too aggressive in financing.  These dynamics are infrequent, perhaps even say rare, in higher quality Class A multifamily where institutional players sit.  However, there were a lot of GPs syndicating retail capital and buying assets at ridiculous prices in B and C multifamily and industrial and those are who will be squeezed the hardest and wiped out.

@HamsterHookah -

The hell if I know.  I guess in the short term - stay liquid.  RE is an incredibly slow moving ship and you'll likely see opportunities in the public markets before you see meaningful distress in real estate.  If you have the risk appetite and the abilities to complete due diligence on the capital stack of these poorly positioned GPs, there's probably a play there.  Figure out who the debt is and who will be taking credit losses and look to bet against them via a shot, put contract, default swap, or other such similar means.  I'm too much of an alpha head and really want to stick to fundamentals or special situations.  Getting into the short side of things just isn't in my personality to dig into it.

I’ve been trying to figure out the public REITs. They’ve dropped a lot, but is all the pain priced in? Who knows. 

[LCHorn 2751]

I think that data is just suspect in general.  Looking at it again, I don’t see how Austin would have been at a 38% premium when the markets otherwise appear very similar.  

[LCHorn 2751]

25 minutes ago, LCHorn said:

I think that data is just suspect in general.  Looking at it again, I don’t see how Austin would have been at a 38% premium when the markets otherwise appear very similar.  

Argh, shouldn't have tried to write this from a phone--a 38% premium over Denver. 

[Viking 301]

Nick Gerli is full of shit and has been preaching about a housing collapse for years.

Here's a response to Nick's "data":

 

[Dbeasy 15609]

7 minutes ago, Viking said:

Nick Gerli is full of shit and has been preaching about a housing collapse for years.

Here's a response to Nick's "data":

 

Oh yes, I didn’t realize that tweet was from Nick Gerli. That dude is a complete moron. He had some big tick tock about Austin real estate prices, and his data was flat wrong. I pulled it directly from mls. He’s either an idiot or a grifter or both. 

[gmr548 16702]

The Airbnb bit is spreading through the news like wildfire based on one questionably sourced tweet.

[Incredulity 11879]

2 hours ago, gmr548 said:

The Airbnb bit is spreading through the news like wildfire based on one questionably sourced tweet.

[StassneyHorn 6780]

Hand up, I had no idea who the guy was, saw 47% and couldn’t believe it. Back to your regularly scheduled programming. 

[UTPhil2006 3930]

Yeah the Airbnb market ain’t hurting. At least not for us 

[Surly Bevo 25766]

The Airbnb bit is spreading through the news like wildfire based on one questionably sourced tweet.

Agreed. All I see all the time is how much travel is up across the board. Logically it would seem that wouldn’t be bad for AirBNB revenues.

[Neonmoon 38130]

First Quarter GDP increased by 2% and jobless claims fell 26,000

And the bond market took a big old dump

[SydneyCarton 49514]

So, you guys think I should buy a rental home, with an eye for unsexy track housing zoned to ok schools as a long term investment?

[Incredulity 11879]

If you can find a good tenant, absolutely.

 

 

[Wulaw Horn 19598]

1 hour ago, SydneyCarton said:

So, you guys think I should buy a rental home, with an eye for unsexy track housing zoned to ok schools as a long term investment?

That's the simple and boring that fits my model. And the only thing I'd add to that is- I'd do it at a price points slightly below median in the area.  Long term like retirement or long term like some other time (like kids college fund or something like that). At your age I'd focus way more on getting the thing paid off than I would on cash flow. I'd view being upside down on a 15 year as far as cash flow goes like adding money every month to a mutual fund. Lets say you are upside down to the tune of $500 right now every month on that 15.  in 5 years you are likely upside down $200 (rents will go up and interest rate will likely go down) and maybe 10 years it breaks even.  So, you could have something like a $250,000.00 house that you put down $50,000. on and borrow $200k.  You will have 60k in the down payment and then you will have a PI payment of $1800 and taxes and insurance of say- 900 a month- call it a 2700 payment. If you can rent that house out for $2200 call it upside down $6,000 a year in the 1st 5 years, $4,000 a year in years 6-10, and break even in years 11-15.  You would have $110,000k invested in it.  At the end of that 15 years- assuming reasonable appreciation (call it a boring 3% or so) You should have an asset free and clear worth $400,000.00  that's a pretty good return on your money if all that works out.  
It won't all work out like that as you will likely have some repairs and maintenance to do along the way.  I think the recommended amount is 2% of value per year- so call that something like another 75K that you might have in it in maintenance and then figure something like it will sit unrented 10 months total during the time you own it. Maybe that's another $20,000.00  I think all that stuff is pretty realistic and you might do better than that all told, but I'd bet you get somewhere between 2 and 4x on your money over 15 year return, in a pretty safe investment that also comes with big benefits on your taxes when you are in the high earning portion of your career.

That's the back of my envelope math.  Now, if you are on a 30 year time period and want this to be paid off when you hit retirement go ahead and put it on a 30 year note.  The cash flow won't bleed near as much on that 30, and you will probably stay closer to an investment under 150k or so (more maintenance of course the longer you own it).  

Edit to add- don't do it unless you are fine with being a landlord, don't mind having dipshits control property you own (because you will run into at least a couple renters in that situation that are dipshits) and you like real estate and know someone who can trouble shoot for you (I would want to meet a good handyman in that area that I could count on if I wasn't handy myself). 

Edited June 29, 2023 by Wulaw Horn

[SydneyCarton 49514]

1 hour ago, Incredulity said:

If you can find a good tenant, absolutely.

 

 

The idea is that the housing shortage will create a pool of decent demand for long term tenants for parents who want to send their kids to decent schools but can't get into a house.

3 minutes ago, Wulaw Horn said:

That's the simple and boring that fits my model. And the only thing I'd add to that is- I'd do it at a price points slightly below median in the area.  Long term like retirement or long term like some other time (like kids college fund or something like that). At your age I'd focus way more on getting the thing paid off than I would on cash flow. I'd view being upside down on a 15 year as far as cash flow goes like adding money every month to a mutual fund. Lets say you are upside down to the tune of $500 right now every month on that 15.  in 5 years you are likely upside down $200 (rents will go up and interest rate will likely go down) and maybe 10 years it breaks even.  So, you could have something like a $250,000.00 house that you put down $50,000. on and borrow $200k.  You will have 60k in the down payment and then you will have a PI payment of $1800 and taxes and insurance of say- 900 a month- call it a 2700 payment. If you can rent that house out for $2200 call it upside down $6,000 a year in the 1st 5 years, $4,000 a year in years 6-10, and break even in years 11-15.  You would have $110,000k invested in it.  At the end of that 15 years- assuming reasonable appreciation (call it a boring 3% or so) You should have an asset free and clear worth $400,000.00  that's a pretty good return on your money if all that works out.  
It won't all work out like that as you will likely have some repairs and maintenance to do along the way.  I think the recommended amount is 2% of value per year- so call that something like another 75K that you might have in it in maintenance and then figure something like it will sit unrented 10 months total during the time you own it. Maybe that's another $20,000.00  I think all that stuff is pretty realistic and you might do better than that all told, but I'd bet you get somewhere between 2 and 4x on your money over 15 year return, in a pretty safe investment that also comes with big benefits on your taxes when you are in the high earning portion of your career.

That's the back of my envelope math.  Now, if you are on a 30 year time period and want this to be paid off when you hit retirement go ahead and put it on a 30 year note.  The cash flow won't bleed near as much on that 30, and you will probably stay closer to an investment under 150k or so (more maintenance of course the longer you own it).  

This is good info, thanks. I was actually thinking of buying the house in cash, or close to it. Then potetially use that asset to leverage a 2nd home, etc etc. 

[Wulaw Horn 19598]

Just now, SydneyCarton said:

The idea is that the housing shortage will create a pool of decent demand for long term tenants for parents who want to send their kids to decent schools but can't get into a house.

This is good info, thanks. I was actually thinking of buying the house in cash, or close to it. Then potetially use that asset to leverage a 2nd home, etc etc. 

You could do that or you could buy 4 at the same time with 25% down and borrow the rest which would probably be my goal if I had that chunk of money. It all depends on what your point in doing it is. If you want cash flow you can kick off to other things then yeah- that's cool- buy it all at once. If you want to own as much assets as possible for a day down the road as a retirement vehicle (or paying for your kids college/wedding and shit like that) I'd leverage it and buy every time I had 25% down until I was tired of owning houses.  I think you probably benefit from scale and relationships a little more on 4/1 (I.e. it's not 4X as much hassle to own 4 houses as opposed to owning 1) so there's that payoff too.  
I know this- if there is one thing current me would have time travelled back to tell past me it's this- never sell a property you own just rent it. It's probably a 7 figure net worth difference for me when I think of all the houses that I sold. Makes me low key sick to my stomach whenever I think about it.  And my retirement would have been taken care of instead of me doing something like this one time a year for the next 10 years to get to where I want to be at retirement age.  Got to stop thinking of that.

Anyway- again it gets into personal goals on this. It's never a bad thing to own a house without a mortgage, but having the ability to relatively safely leverage OPM and have Other people pay it back for you is fantastic too.   I don't think there is a safer leverage play than real estate, especially boring track houses in decent schools as a play that you are talking about.  

[LCHorn 2751]

7 minutes ago, Wulaw Horn said:

You could do that or you could buy 4 at the same time with 25% down and borrow the rest which would probably be my goal if I had that chunk of money

Highlighting this.  

[Wulaw Horn 19598]

5 minutes ago, LCHorn said:

Highlighting this.  

Unless you are a kid. Then what should be highlighted is never sell a house that you've bought. Just move out and buy the next one and rent it out.  So what if you have to pay PMI on the next house. It goes away and it's not that big a deal.  5% downpayment is nothing if you are thinking of moving houses. Don't be an asshole like I was. 

[Gil Bang 26247]

1 hour ago, SydneyCarton said:

So, you guys think I should buy a rental home, with an eye for unsexy track housing zoned to ok schools as a long term investment?

I think you should learn how to spell "tract".