All Forum Posts by: Eric P.

Are there major local bubbles?  Yes.. Is there a major national bubble?  I don't really think so.  Majority of areas here in the North East are only like 8% off their bubble lows.  We just purchased a turn key home last year that needed nothing, we got it for $400k here in Jersey.  It had sold for $520k at the peak of the bubble and was $350k in 2003 as new construction, so around the Philly suburbs at least, I'd say no, there is no bubble at all.

With that said, many areas in CA, Seattle and TX have experienced some major home appreciation over the past few years, and I believe that has a lot to do with foreign investors purchasing property in cash driving up those particular markets.  

80/20/0 and 80/15/5 loans don't really exist anymore. You really need to have perfect credit to get an 80/10/10 and they'll limit what you can borrow. There are still those 3.5% FHA loans and some 100% loans through credit unions, but again you need to qualify and the home purchase size will be limited based on income.

So even if there is a bubble, and it were to pop, I don't think it'll hit main street and the housing market nearly as hard as it did in 2008-2009.  I believe a bubble pop would hit wall street and 401ks more than anything, hopefully we don't see greedy business laying workers off for their bottom line.. could get the market back to reasonable numbers that make sense and actually trade based on fundamentals which would make for a great buying opportunity for the masses even on the short term.

I was wondering whats involved with trying to sell a home as an owner?  I have a title company, a real estate attorney, and a Realtor friend that could help me through the process.  If I end up selling I'd just really like to save on the Realtor commissions and walk away well ahead instead of just breaking even.

CONGRATS!!!

We bought our house about 6 months ago.. It had also sat on the market a fair amount of time.  We waited for another price drop and came in with a low offer.  They also covered our closing costs.  The identical house across the street is now under contract with an asking price 7-8% higher than what we paid.  With slightly less land and just a little smaller, also covered in carpet.  Sometimes those homes that just sit on zillow can be the best ones to go in with a low offer, people get desperate over time.  We plan to stay there many many years, but theres something nice in knowing you wont lose your shirt to realtor fees if you suddenly had to sell.

Wife and I just purchased our first home, so its back to saving for my goal to break into long term REI. We've been putting away about $3,000 a month the last 5 months (also paying down some student loans). I want a minimum of $10k for surprises and emergencies on the property and I'll likely need 25% to put down so we're gonna look for deals under $150k hopefully within the next year. When we bought our home we were approved for $550k but went with a home that was $400k so I assume we could get the bank to lend us another $100k for this first rental property. With rates as low as they are I think this is probably our best option.

My youngest brother is actually going to be going away to school about an hour away and thinking about living on campus.  I've considered getting a place near that school, letting him live there free and picking up some roomates.  He can be my live in property manager and keep everyone in line.. and he knows if he slacks off his a$$ is OUT!  

I'm risk adverse so I wouldn't own a property without having at least $10k in the bank cash to cover surprises vacancies, evictions, or damage starting at day 1 on each property. I'd also figure in those expenses each month in the rent.. since Id already have a $10k safety net that additional rent collected to cover damages and vacancies would just go into a Roth IRA each month (Can always pull the principle out if needed). With that said, I'd likely only be comfortable purchasing 1,2 or 3 properties at first where I know if all 3 of them were vacant my left over salary each month could cover the expenses if I redirected IRA contributions that month. But overall, I'm very big on safety blankets and sleeping well at night. 6 months worth of bills cash for each place if you only have 2-3 should be the standard in my opinion.

I haven't jumped in to REI yet so maybe I'm missing something. But isn't the point of this that the loans kinda support themselves? So lets say I had 5 properties I was renting each cash-flowing $200 a month and I lost my job. Wouldn't my properties really be helping me stay a float with an extra $1,000 a month?

Haha I know I know.  We just bought our first home, I'm just building up a bigger emergency fund.  Then I have some 6% student loans I wanna get rid of.  After that I'll begin saving for my first investment property.  I'm facing a bit of job uncertainty over the next 6 months with some business changes coming so I'm not gonna be comfortable jumping in till then anyway.  Hopefully my 4 year nursing degree lands me something so I don't take a pay cut if it comes to that.  

But I'll be keeping an eye out for this thread, very interested to see how it all comes together.  Looks like very little upfront capital needed with the potential for a nice big payday.  BEST OF LUCK!

You sir are my hero.  My wife and I both work, our student loans are below $30k total, credit card debt just about totally gone.  We bank a fair amount of money and I have a few months bills worth of emergency fund.  We just bought our first home that is about 22% of monthly income and I am in constant panic!  I'm seriously building our emergency fund to 9 months of bills even though my wife works for the state, we're both W2 employees, and I have a 4 year nursing degree as a backup even though I work in business.  And we don't even have kids yet!

My suggestion being a new home owner would be DON'T go by rules of thumb or percentages on your personal home.  The percentages really just don't work and never made sense to me as things like food, gas, childcare all cost the same no matter how much you make.  Someone making $150k a year spending 30% of monthly income on housing is still going to have WAY more disposable income each month than someone making $50k a year and only putting 10% of monthly income toward housing.  

Remember when you buy you're really locked there cause you'll have to pay Realtor commissions when you go to sell, there really isn't an easy out without taking a financial hit unless you can rehab and flip.

Make a tight budget and talk to a financial planner.  You guys have a lot of eggs in 1 basket and honestly, there is NO WAY I'd own a home in your situation, just sayin.. too much too lose if 1 thing goes wrong.

Congrats!  I'm still nervous to buy my first lol

 Don't worry, I'll be making that first step soon enough.  We actually just purchased our first home.  Got a great deal so we're happy.  Just need to get used to being a homeowner.  And because we want to begin investing in real estate I'd like to have a minimum of 9-12 months worth of personal monthly expenses saved in an emergency fund.  In addition I'd like to get rid of some of my higher interest student loans (Currently owe about $26,000 at $400 a month with like $14,000 of that at 6% so paying off the 6% loans would cut my monthly payment in half)..  Once we hit those 2 goals we'll be jumping in, till then I'll keep on gaining great info here like in this post and hope that when the day comes I'm not faced with analysis paralysis.