Home buying thread

Keystone

Keystone

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Interest rates are still low enough that I would be pretty confident at being able to secure a significantly higher return investing said cash and taking the mortgage, but I guess there's something to be said for not having that payment as well as the "guaranteed return" of whatever rate you would be paying. No reason it would need to be an all or nothing choice though is there? Could basically lock down half at the likely lower but guaranteed "return" and use the rest to invest.
 
Screamfeeder

Screamfeeder

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Keystone said:
Interest rates are still low enough that I would be pretty confident at being able to secure a significantly higher return investing said cash and taking the mortgage, but I guess there's something to be said for not having that payment as well as the "guaranteed return" of whatever rate you would be paying. No reason it would need to be an all or nothing choice though is there? Could basically lock down half at the likely lower but guaranteed "return" and use the rest to invest.
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Not really needing to be an all or nothing choice at all. I have just always heard that buying cash is "better" because of the hassle being eliminated. But after doing some reading about reinvesting money that would go into a big payment, I am not so sure. I have a meeting with my FP next week to broach the subject. Areas I am looking at are seeing rising prices at a pretty crazy rate too (three neighborhoods throughout Los Angeles) so that factors into my (limited) knowledge. No idea if this changes how things work with the realtors or with things like inspections or taxes either.
 
moonarchia

moonarchia

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Screamfeeder said:
Not really needing to be an all or nothing choice at all. I have just always heard that buying cash is "better" because of the hassle being eliminated. But after doing some reading about reinvesting money that would go into a big payment, I am not so sure. I have a meeting with my FP next week to broach the subject. Areas I am looking at are seeing rising prices at a pretty crazy rate too (three neighborhoods throughout Los Angeles) so that factors into my (limited) knowledge. No idea if this changes how things work with the realtors or with things like inspections or taxes either.
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You'll want to have 20% down whatever you do. PMI is a fucking huuuuuuuuuge waste of money. If you are in one of the 'hot' markets where prices are going up far more than inflation you might want to keep renting for a bit. But you might not. Lots of local variables in play. I know CA is wanting in on the legal weed thing, which will cause huge inventory shortages in the short term while it's still a schedule 1 substance, because banks and investment firms can't do anything directly with growers/sellers, so they use real estate to wash the funds. Sit on the place for 2-3 years, then sell and voila you can put it into the bank or stock market. This will keep the market inventory pretty low, making it a seller's market, and will jack prices way up. But that is a crash waiting to happen as well. Once it gets taken off the schedule lists (Trump or next guy will do it) the inventory will open up much bigly and prices will plummet. Rule of thumb for new house is 5x average income for the area. If it deviates too much outside that a market correction will come sooner or later.
 
Screamfeeder

Screamfeeder

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moonarchia said:
You'll want to have 20% down whatever you do. PMI is a fucking huuuuuuuuuge waste of money. If you are in one of the 'hot' markets where prices are going up far more than inflation you might want to keep renting for a bit. But you might not. Lots of local variables in play. I know CA is wanting in on the legal weed thing, which will cause huge inventory shortages in the short term while it's still a schedule 1 substance, because banks and investment firms can't do anything directly with growers/sellers, so they use real estate to wash the funds. Sit on the place for 2-3 years, then sell and voila you can put it into the bank or stock market. This will keep the market inventory pretty low, making it a seller's market, and will jack prices way up. But that is a crash waiting to happen as well. Once it gets taken off the schedule lists (Trump or next guy will do it) the inventory will open up much bigly and prices will plummet. Rule of thumb for new house is 5x average income for the area. If it deviates too much outside that a market correction will come sooner or later.
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PMI doesn't really apply here at all (I think). I have the option of getting a mortgage, or buying the entire property for cash. Going under 20% isn't going to be a problem. Not sure at all if I understand where you are going with the Legal Weed thing. I would ideally like to get a place that I can actually live in and own for a very long term (not turn around and sell it right away). My rent is absolutely out of control (even for being an amazing area) and I am looking into some of the "hot" neighborhoods in LA for multiple reasons (not just because they are "hot").
 
Khane

Khane

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Speaking of hot markets I was in Fort Collins CO over the weekend and that whole Denver + Denver Suburbs area is going crazy. It's really strange riding down the only highway to and from Fort Collins and seeing all the new construction in the literal middle of nowhere. It's all carbon copy construction and doesn't seem very desirable but it's getting eaten up with no end in sight. They almost look like Disney resort properties. I realize it's becoming a big tech industry area of the country but it seems like a bubble waiting to pop.
 
moonarchia

moonarchia

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Screamfeeder said:
PMI doesn't really apply here at all (I think). I have the option of getting a mortgage, or buying the entire property for cash. Going under 20% isn't going to be a problem. Not sure at all if I understand where you are going with the Legal Weed thing. I would ideally like to get a place that I can actually live in and own for a very long term (not turn around and sell it right away). My rent is absolutely out of control (even for being an amazing area) and I am looking into some of the "hot" neighborhoods in LA for multiple reasons (not just because they are "hot").
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States where weed is legal have a huge problem with cash that cannot be deposited into banks or put into the stock market because it is still illegal federally. Real estate is one of the only things they can legally put that money into, with the side effect of it being legal to use all the money on the other end when they sell the property. This results in them buying up almost all inventory in the area. They sit on it for a few years. Flip it and rent it. Then sell it or keep renting it out. This means people who want to buy are competing with them on all properties. Prices rise. Inventory remains small. As Khane just pointed out in Denver this has led to housing being built every fucking place north, south, and east of town. Traffic is a bitch, though, so there are limits on how far away you can live if you work in the tech center. Prices in Denver proper go up up up, and people who work in the suburbs and can live farther out can sell high and buy lower.
 
Screamfeeder

Screamfeeder

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moonarchia said:
States where weed is legal have a huge problem with cash that cannot be deposited into banks or put into the stock market because it is still illegal federally. Real estate is one of the only things they can legally put that money into, with the side effect of it being legal to use all the money on the other end when they sell the property. This results in them buying up almost all inventory in the area. They sit on it for a few years. Flip it and rent it. Then sell it or keep renting it out. This means people who want to buy are competing with them on all properties. Prices rise. Inventory remains small. As Khane just pointed out in Denver this has led to housing being built every fucking place north, south, and east of town. Traffic is a bitch, though, so there are limits on how far away you can live if you work in the tech center. Prices in Denver proper go up up up, and people who work in the suburbs and can live farther out can sell high and buy lower.
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Ah Copy that.

So you're saying I should go into my local dispencery and ask them to show me some places?
 
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moonarchia

moonarchia

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Screamfeeder said:
I was being somewhat sarcastic, but I wonder if you could actually find some decent property through them.
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I realized you weren't 100% serious, but they are there to make money. If you can make it worth their while and they have a property you are interested in, commerce yo.
 
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Lanx

Lanx

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Screamfeeder said:
Not really needing to be an all or nothing choice at all. I have just always heard that buying cash is "better" because of the hassle being eliminated. But after doing some reading about reinvesting money that would go into a big payment, I am not so sure. I have a meeting with my FP next week to broach the subject. Areas I am looking at are seeing rising prices at a pretty crazy rate too (three neighborhoods throughout Los Angeles) so that factors into my (limited) knowledge. No idea if this changes how things work with the realtors or with things like inspections or taxes either.
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We did cash, our realtor said we were only 2 out of hundreds that hes had that did cash.

We were able to dictate more terms w/ cash, (lowered price, got new ac unit) since it's cash, no need of that loan approval and rejection and shit.

we also saved on closing costs, which was 100ish compared to like 5 to 6k

And we were able to bully our way in. It didn't work our first time, however that was a new development, so the developers were keen on selling only at the list price no matter what.

i wouldn't be able to tell you which way to go, just what paying cash was like for us.
 
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Sludig

Sludig

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Khane said:
Speaking of hot markets I was in Fort Collins CO over the weekend and that whole Denver + Denver Suburbs area is going crazy. It's really strange riding down the only highway to and from Fort Collins and seeing all the new construction in the literal middle of nowhere. It's all carbon copy construction and doesn't seem very desirable but it's getting eaten up with no end in sight. They almost look like Disney resort properties. I realize it's becoming a big tech industry area of the country but it seems like a bubble waiting to pop.
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It is, in only 4 years my house as one of those middle of nowhere off the highway towns going from Ft Co to Denver is closer to doubling in price than not. (250 which was buying after 6 months of gains had already risen the area from ~205-220 ish), and now I have neighbors that have sold for fucking 390 I think it was.

Was why I was thinking about trying to find something that isn't too far from utilities to be ran in the plains East of highway 85, but not too high land priced, and try to get away with a much nicer system built home or one of those garage steel structure type homes. (Really I'd love to flee the state but nervousness about decent paying jobs elsewhere even with lower cost of living)
 
Pops

Pops

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Screamfeeder said:
I've been doing some light research lately and wanted to know if anyone here as any opinions of Cash vs Mortgage. Meeting with some realtors in the next month or so. Planning on getting far fucking away from Santa Monica rent.
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Inventory in Los Angeles Continues to Decline - Mansion Global

WLA up 21% in a fucking year to 1.2 milllion. What's a jumbo go for now 4.5%? Forget the tax deductions, they are capped now. Can you earn more than 4.5% on your money? Borrow it.
 
Frenzied Wombat

Frenzied Wombat

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Screamfeeder said:
Not really needing to be an all or nothing choice at all. I have just always heard that buying cash is "better" because of the hassle being eliminated. But after doing some reading about reinvesting money that would go into a big payment, I am not so sure. I have a meeting with my FP next week to broach the subject. Areas I am looking at are seeing rising prices at a pretty crazy rate too (three neighborhoods throughout Los Angeles) so that factors into my (limited) knowledge. No idea if this changes how things work with the realtors or with things like inspections or taxes either.
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The only real reason to pay cash is if the housing market is so hot you risk losing out on your dream house because others are offering cash. A seller faced with a choice between a mortgage offer and an all cash offer will obviously always go with the latter. But all cash offers are generally rare, as most people either don't have the cash or desire to buy outright.

Absent the issue above, with today's stock market and current mortgage interest rates, imho it's best to put 20+% down and take a 15 year mortgage. Think of it this way-- first off you get the mortgage interest as a tax deduction. Second of all the money you would have bought your house with can be put in the stock market.. Taking 2017 as an example, if you had decided to put 200K in a Dow index fund instead of using it to buy a house outright, then you would have made a smart choice, as the interest you made in the market is far more than the interest you have to pay on your mortgage.
 
Screamfeeder

Screamfeeder

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Frenzied Wombat said:
The only real reason to pay cash is if the housing market is so hot you risk losing out on your dream house because others are offering cash. A seller faced with a choice between a mortgage offer and an all cash offer will obviously always go with the latter. But all cash offers are generally rare, as most people either don't have the cash or desire to buy outright.
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Yeah the areas I am looking at are very hot right now with home prices going up quickly. There are some other cash buyers out there but after talking with my planner and watching a few amazing properties go quickly I am most likely going to be a full cash buyer so I can bully my way in once I find the best spot. I will still have plenty of money in my investments but since I have decided to make SoCal my home for the next at least 15-20 years I really just need to get away from renting.
 
Screamfeeder

Screamfeeder

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Pops said:
March home prices make their biggest jump in 4 years—and half of the biggest housing markets are now overvalued

Prime selling time is now Scream. Going to have trouble getting a deal. If these coming bumps in interest rates don't crimp the economy too bad, it's going to be another good year.
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Yeah I read about that. One of the realtors I met with and am considering going with said the same thing, BUT not in my price range. Homes in my range have been cooling and are still WAY below the pre-recession peak. The biggest risk for me is if I decide to move a lot sooner and need to sell after prices drop. I have two more realtors I am meeting with this week before I start to make any real jumps.

Just from my laymans eye of watching the market the last two months, about 10 of the 15 or so properties I was looking at went for within or below their asking price. If it all comes out looking like a bad time, I will most likely just go the super frugal route and rent somewhere (not in Santa Monica...fuck me) and put some other plans on hold for a year or so.
 
Cad

Cad

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My house is now up a little more than 50% from when I bought in 2011. Shows no signs of slowing down with all the people moving to Dallas and my neighborhood being closed off and built out but demand rising.
 
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