All Forum Posts by: Matthew A.

If the economy was better Yellen would have raised the rates already. The stock market should not be an indicator of how we are doing. Quantitative Easing anyone??

Not sure why you are still considering this person as a tenant. Sounds like he can't afford to put down a security deposit. 

@Andrey

That's great, but appreciation still isn't a realized gain. Appreciation pays you nothing until you sell, or pull money out.

I'm not sure how that can be even argued.

If you buy a million dollars of a stock, and in 50 years it's worth 25 million, you made zero dollars if you haven't sold. That stock has terrible earnings one quarter then files for bankruptcy 3 months later and loses 95% of it's value. You sell, and now your unrealized gains of 24 million went to a realized gain of $250,000.

What if the market had the same correction in that area again. These "investors" bought $400,000 homes in 09/10 and now they are worth $1,000,000 and "add" that into their "gains". Now the market crashes, and they can't get out, dropping their price every 2 weeks, until they are back down to where they started.

Don't confuse  realized gains, with unrealized gains.

Matt

Considering appreciation isn't a realized gain, why would someone include that in their calculation?furthermore without reading the in between comments, i'm assuming it's because he invested a lot of money which is why they are paid off and that's contributing to the 6% cash on cash return.

Leverage will get you more money out of your properties. Paying off a loan is usually not the majority of the payments to own a home, so why do it?

If I paid off my $157,700 loan on my condo in CT, I would save myself $719 a month. Would take me 219 months or 18.2 years to see that money start working for me.

find deals and leverage. If you want to put a ton of money down, buy more expensive apartment buildings, but still leverage.

 Matt

Looked at and analyzed maybe a 100 properties in the new haven county area this year. You will never get 2% in CT unless you are buying in the absolute ghetto. West Haven (also known as Waste Haven) is a dump, even near the water and I looked at multiple properties there. I have lived on the shoreline for 28 years.

Bridgeport is terrible, New Haven (also known as Pistol Waving New Haven) is awful coupled with the highest property taxes 2nd to Hartford.  

My friend is buying up houses in East Windsor and that seems to be the area that has deals left and right. Still though, it is not the nicest of places to live, but I think it's changing. Hopefully adding 8,000 new jobs to Pratt & Whitney should help our little state of CT out that has had terrible governing these past several years.

Matt

The best advice would be to sell as soon as possible, and start over. 

Insane amounts of money on this flip. Don't rent it.

Good job, just don't make the mistake of holding on.

Matt

You qualified for a $130,000 on a single family, I'm not sure how you are going to qualify for 275-500k multi with only 15-20k in your savings account. Lenders will take 75% of the non owner occupied unit's market rent (unless you have a lease already in place) I don't think that would even bring your qualification from 130,000 to 275,000 let alone 500k man. 3.5% minimum down payment on 275 is 10k, not including closing costs, which you will have to roll every single thing into just to secure the loan. If you are trying to purchase anything other than a Duplex, you will have to have 3-6 months of reserves. You will have a lot of PMI, and it will never go away unless you refinance. You would of course hope your home appreciates because if not or goes the other way, then it's a big big problem.

I guess others will come on here and tell you it can be done with no or low money, and blah blah even if none of them have even purchased a first home. I just don't think you have enough income (judging by your approved amount) or enough saved to be investing in multi families.

Focus on buying yourself a small, well kept home in a decent area that falls in line with what you are paying for rent now and save more, or find a way to make some extra income.

If you invest all of your savings of 20k, and you make $200 net each month, it will take you 100 months just to make your money back. The only other way, would be through appreciation, and that is an unrealized gain until you sell. Like I mentioned earlier, if you buy a home for 275 and you aren't making the type of gains you thought PLUS depreciation.. you would be in for a world of hurt.

If your music career isn't advancing, find something else and save as much as you can. Although i'm a huge fan of putting down the absolute least possible to secure any type of loan, I don't think it's the time for you to be investing. 

Don't take any offense to anything I say, just trying to help. 

Matt

@Account Closed

Maybe Tim wants to enjoy his life now, not 40 years down the road when life is uncertain.

I think down the road, but I get depressed thinking about preparing for when I'm 70. 

Yikes.

$25,000 to $310,000 in 3 years. Sell it. Why try to time the height of the market? Doesn't make sense to me, and what's the point of making money in life if you are just going to hold on to the property until you die?

1031 that money into multiple properties that provide better cash flow and enjoy your life, from here on out. Those properties if analyzed correctly would provide you a crap ton of net cash each month and in 30 years will be paid off. 

If you take the other route of holding on, life is an uncertain thing, who knows where we end up. 99% of people would kill to have access to 300k in cash.

Your money, your choice. 

Me personally, would purchase myself a new/relatively new Porsche Cayman GTS (70-90k) so i'll smile every time I'm in a car, make sure i'm situated in a nice area I enjoy living, and invest the rest for cashflow. done, simple.

PS. someone mentioned Topsail. I'm 28 and have gone every single year since I was born with my family :). We have been staying mostly on topsail beach, used to stay closer to the surf city bridge. I look at property to buy with my family all the time so we can have a life long vacation house.  

Matt

Want someone out of the house?

Makes me think of the movie "dirty work" where they try to put fish inside of the walls to get people to leave LOL

https://www.youtube.com/watch?v=OG9EDE_bnws

but seriously, cash for keys I guess.

Sucks, you can't even give someone a 60 day notice to leave. Seems like a market I would never want to enter.

Matt