All Forum Posts by: Konstantin Klitenik

@Holden Schwabe Thanks, that gives me some background on the scope of the issue.  Here's a full frame photo of the window.  There is no taper at the top.  The property was a gut renovation but they kept the old windows (not sure if just the sashes or the frames as well.

I recently bought a condo and found this relatively large gap in the window (0.425"). This should be covered by the builders warranty but I want to make sure that the developer doesn't do a hack job in an effort to save money (like installing a piece of foam). What would be the proper way to fix this and what kind of contractor should I consult with?

Thanks!

@Chris Mason What's so special about 3/8?  Is that the amount at which it makes sense to refi?

Purchase price is $925k with 20% down.

I understand that this is a relatively illiquid situation but spending $5300 less in interest over 5 years seem like a good return on $3700.  What am I missing?

I already have an application with a lender and those are confirmed options.

@Bill F. even you if you discount the principal, that's still still a 43% percent return after 5 years, or about 7% annualized.

I'm taking out a $740k mortgage at the end of Feb.  I have the option of 4.25% with no points or 4.125% with 0.5 points ($3700).

Using bank-rate mortgage calculator, I looked at principal and interest about 5 years out (end of 2024).

With 4.25 and no points:    Principal $80,802  Interest $173,997

With 4.125 and 0.5 points: Principal $82,324  Interest $168,695

So putting $3700 towards 0.5 points now, will save me $5,302 in interest and add additional $1522 in equity.

This nets $5,302 + $1,522 - $3,700 = $3,124 (84%) return on $3,700 in 5 years.  

That seems like a very good deal.  Am I missing anything?

Thanks.

@Dan K., if I walk away with $275k, I'd likely put it in mutual funds and bonds, perhaps VWIAX (mix of stocks and bonds), which returned on average 6.5%/yr since inception in 2001.

If I refi, how does it work that I take out the current going price for the condo?  I thought refi would just take my current mortgage, and refinance that into 30 years.

I fully understand that principle that it's not liquid equity but that's fine with me.  I have enough savings where I wouldn't need to access that for a long time.  So I treat it all the same.

One big question is it proper to include principal portion of the mortgage as "income" (or in other words exclude it from expense) because that's not a "true" expense?  In this case, my principal payment is about $6500/yr.  That would almost double the calculated return (from 3% to 6%) which starts to look more reasonable.

@Charlie MacPherson The condo is in North Cambridge, not far from Alewife.  It's at the Reservoir Lofts on Wheeler Street.

@Robert Leonard I'm planning on purchasing a bigger place to live in.

I'm moving to a bigger place and wanted advice on what to do with my current condo.  Here are the details:

Location: Cambridge, MA USA

Purchase price:       $310,000 (2009)

Mortgage Balance: $185,000

Monthly Payment: $1,533 (includes mortgage, insurance, property tax)

Rental potential: $2,350/mo

Sell potential: $490,000

The way I see it, I have an opportunity cost of $490k-$185k less 6% commission = $275k.

My rental would net $9,800/yr less any vacancies and improvements, so that's $8k/yr.

To me that appears to be a 3% return.  Not to mention that if I keep this for at least two years, I'll have to pay capital gains on the sale when I do decide to sell.  Now, the property may appreciate over the next several years but it would need to clear the 20% cap gains tax to make a dent.

Am I missing anything in this calculation?  Would you recommend to sell or rent?

Thanks!