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Congratulations! This is an exciting endeavor.
Learn about CAP rates and other jargon so you can communicate real estate investment like a pro. Consider this book HOLD by Gary Keller for full blown training.
My advice is to ask the lender for your limitations. How much down payment are you investing? You will need $$ leftover for repairs.
How much debt to income ratio will they lender accept for you. It's going to vary between 2, 3, 4 units.
Learn how much appliances, materials, labor, etc cost for remodeling and repairs.
Figure out your comfort level of buying into appreciation-heavy or cash-flow heavy neighborhoods. They are very different. Everybody says they want the middle, but that's elusive and weird.
>I found a great starter-home, but I can only meet the 3.5% downpayment minimum (as opposed to 20%). What's next?
PMI
Not to be dumb, but this book helped me a lot back in the day. https://www.amazon.com/Home-Buying-Dummies-Eric-Tyson/dp/0470453656
You need to sit down and look at all your expenses and see what you can afford. The situation is different for everyone, but the general "rule" is your mortgage payments should be no more than 25% of your monthly gross income.
I have a friend who works for a company that deals with housing foreclosures. I asked him if they work with families at all or just investors, and he said just investors. I've heard that many banks would also rather work with investors directly than with families. They make more $$ that way. Problem is this keeps homeownership out of reach for many families who would otherwise qualify.
Aaron Glantz wrote about this in his book Homewreckers.
The capitalists are doing to housing what they do to everything. Last time I checked 50% of the homes in SD are non-owner occupied. In an ethical society housing is first and foremost a humanitarian concern.
Oh yeah, one more thing fuck Steve Mnuchin
Zo simpel is het niet. Je kunt de betaalde huur niet vergelijken met de hypotheeklasten. In dit goede boek wordt dat alles uitgelegd: https://www.amazon.com/Wealthy-Renter-Choose-Housing-That/dp/145973646X
Sowieso kun je waarschijnlijk in de huidige markt veel meer huis krijgen voor 1500 aan huur, dan voor 1500 aan hypotheek laat staan totale lasten…
There's a book called The Wealthy Renter. It addresses many misconceptions about renting and completely changed my view on the topic. The author is Canadian so talks from the Canadian viewpoint but almost all chapters are directly applicable to the US market as well.
It doesn't answer your question directly but I thought it's an excellent book to bring up.
I owned a house. OWNED it (i.e., no mortgage). Regular maintenance was a lot of work, and unexpected surprises (roof, appliances, furnaces etc.) costly. I sold, and my cost to rent is now less than my average monthly maintenance cost (including property taxes, utilities, insurance etc), AND the ROI from the proceeds of the sale more than cover my rent. Been doing it for about 7 years, plan on doing it the rest of my life. The Wealthy Renter is a great resource that really opened my eyes and saw what a waste of money owning and tying up all my capital was.
I read about this in Homewreckers , most of these giant rental companies now have the tenant reasonable for pretty much any kind of maintenance that's not covered under the law.
Awesome I wish you the best.
In the meantime I highly recommend you check out this book. The Wealthy Renter This book has helped me speed up my FIRE journey. It’s from a Canadian perspective but can totally be applied to the USA (I’m assuming you live in the USA)
There’s nothing wrong with buying a place you can afford. You might be surprised how much money you could save renting in the long term. Cheers!
https://www.amazon.ca/Wealthy-Renter-Choose-Housing-That/dp/145973646X is a good book and in the Canadian market. I'm not going to buy anything on these prices, it's much cheaper and less risky to rent. Even having the money.
Read The Wealthy Renter https://www.amazon.ca/Wealthy-Renter-Choose-Housing-That-ebook/dp/B01B2DK68E
The book will give you some insight into what buying vs renting would mean for you in the long run.
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Best book I've read on real estate ever. Follow this advice and read the book, you'll be well on your path to success. This $32 book in itself has made me hundreds of thousands of dollars.
There's pros and cons of each.
Personally I think the biggest factor is actually not a financial one, but rather what type of lifestyle you want.
Renting offers more flexibility, less headache of dealing with potentially costly issues, money not tied up in real estate.
Owning offers the free of having your own place to do what you want (though somewhat limited if you live in strata), equity, some degree of ensuring your cost of living doesn't go up as much (like rent), etc.
I'm more of a pro owning guy, like most of PFC, but there are arguments to be made on both sides. Many do choose to be lifelong renters by choice. See this book: https://www.amazon.ca/Wealthy-Renter-Choose-Housing-That/dp/145973646X
Hey don't feel scared - you are way ahead of a ton of people. I would rationalize a couple things and make a life plan/budget?
1) why do you want a house? You should read the wealthy renter. Its this great book written by a Canadian real estate economist who breaks down the market in each city and also explains the pro's and cons of renting vs buying. And the Canadian mentality. https://www.amazon.ca/Wealthy-Renter-Choose-Housing-That/dp/145973646X
2) Do the yearly breakdown for your financial goals. Like given where you are now at what point do you want to buy a house or have a certain amount invested? And understand that due to rise of cost of living and also housing prices that it may be difficult to buy a home especially on a single salary. So know that some of this, is out of your control. Like for example, a double income, no kids couple are obviously at an advantage but maybe you want kids and a house.
3) know that you are going to change, and your financial goals are going to change. Maybe in now you really want a house, but in 3 years your really want to travel or in 5 years its more important for you to live closer to family?
Just make sure you got that Emergency Fund, kill high interest debt, and follow the instructions of the about section of this subreddit first and the rationalize/plan your worries.
The HELOC would come out of your mortgage. Since you haven't paid off any of your mortgage then you'd have $0 in the HELOC room. There are other ways to increase that, like getting the house reappraised and getting additional room in the HELOC (call your bank on that). For SM there's a book written by Smith's son, I found it really helpful. Master Your Mortgage for Financial Freedom: How to Use The Smith Manoeuvre in Canada to Make Your Mortgage Tax-Deductible and Create Wealth https://www.amazon.ca/dp/1999171608/ref=cm_sw_r_cp_apan_glt_i_VGJZPY6CJ4Z6Z67PGAJ8
Your pretty right about this and gets a lot worse. I just got through this book called Homewreckers and he talks a lot about what happend after the 08 bust. Like wallstreet pretty much picked up all these foreclosed homes in the tens of thousands,loaded these homes with a ton of debt, and then repackged all this debt into securities and sold it right back to the market. It's pretty fucking crazy.
These guys don't give a fuck about being landlords, they rent out these homes with condtions in the lease that pretty much makes the tenant responsible for all the maintenance and the repairs.
This thread is a gongshow b/c everyone's latching onto the FrAnChIsE suggestion. All I'm going to do is link this:
https://www.amazon.ca/Wealthy-Renter-Choose-Housing-That-ebook/dp/B01B2DK68E
And suggest you check out a own vs. rent calculator b/c owning doesn't always come out on top.
Spent 6 months looking for an apartment because I wanted one that was nice enough to want to live in long term. That was a decade ago. Still love it. It has all the feel of a super high-end downtown condo... at 1/3 what owning a similar unit would run me. (I save the rest - /r/justbuyVGRO)
My lifestyle is exactly the same as my friends who are spending 3x as much to live across the street.
I think a lot of people have a hate on for renting because they’ve lived in shit apartments with awful neighbours and landlords.
Book suggestion: The Wealthy Renter. Really lays bare the economic implications of overpaying for a home. (ref.: “Implicit Rent”)
Your local library might have it. You don't even have to read the entire 256 pages. I'm guessing it's your first home? You'll get A LOT out of reading just the few chapters that apply to you. Will cover some unknowns you might not have considered. Good luck
Passed my first time, I recommend the Patricia O'Connor The SAFE Mortgage Loan Originator National Exam Study Guide: Second Edition
There are bulleted points and practice tests.
Read the wealthy renter: https://www.amazon.ca/dp/145973646X/ref=cm_sw_r_other_apa_i_dAEIFbJQ7TR6T
Before you make any housing move. Its an easy quick read. Really enjoyed it and learnt a lot. It might just change your mind about owning instead of renting. Goodluck!
Here's another option. Get a readvanceable mortgage and buy growth ETF's. Use the increasing credit limit to make interest payments.
Or read a book https://www.amazon.ca/Master-Your-Mortgage-Financial-Freedom/dp/1999171608
You're thinking too small. You and some friends need to get some money together to buy up the failing banks behind the foreclosures. Then you'd have 1000s of homes to flip/rent out, and you'd be getting 'em even cheaper for buying in bulk.
Great book on this stuff is Homewreckers by Aaron Glantz.
Get this book
Read it front to back, then go through and study every chapter. Make sure you can differentiate the different laws and what their purpose is. The rest is pretty easy to get down. I studied a chapter a day the 8 days leading up to my test and passed on my 1st attempt. Take it seriously though it is a hard test so over prepare. And good luck!!
Home Buying for Dummies. I'm pretty sure I read an earlier version than the 4th edition, but here's the book on Amazon. https://www.amazon.com/Home-Buying-Dummies-Eric-Tyson/dp/0470453656
I have fond memories of it going into detail about the various items that will be covered in closing; but, as I recall it covered the whole spread of home buying in one degree or another.
There are a few reasons for me:
- My current rent is affordable and I have great landlords, so the current living situation is chill and comfortable.
- There are things associated with owning a home I want no part in at this stage of my life, such as maintenance and higher costs to moving. If I decide to move jobs to a different city, something I'd like to leave open, this makes it much easier.
- The money I would be saving for a house/using for a mortgage, I am investing in ETFs, Couch Potato style. The set it and forget it allows me to relax and not stress about finances.
- I live in a HCOL area (not Vancouver or GTA), so buying a place is expensive.
- Easier to save money to travel on my vacation time.
My dad is also encouraging me to focus on saving, and not bother looking for a place, so it's great that I have family support for what I am doing. He's got me to read a couple of books on the topic, and I'd really recommend The Wealthy Renter for more reading on saving money at a good rate while renting. It certainly requires more diligence, as a home you buy is a forced savings plan, as by paying your mortgage you're building equity, but it discusses that it isn't the only way to go about it.
> a reit doesnt give you a place to live. thats why property is better than owning a reit.
Depending on where you are located in Canada, the math may not work out as cleanly as you think it may. A book that you may want to check out (haven't read it myself):
Interview with the author on TVO:
> The third option would be nice, but now I'm looking at outweighing the amount I'm "sinking" in rent against the amount I bring in from the rental property, minus the mortgage payments. Life starts to get complicated at that point, but it does at least offer a safety net of not losing my primary residence.
So wouldn't it make more sense to rent? That is safer than owning an illiquid asset like a house.
> Personally, the thing I like about real estate is the hands-on piece of it. I like knowing I own a full property and have full control over it.
- If you're a LL and the property is rented/occupied, you DON'T have full control over it.
- No disrespect but this sounds like something a child would say. I want because I can play with it. I don't know if that belief is a sound investment strategy.
- To me, at the end of the day it is about the following:
- The return
- The risk
- The amount of effort/time involved
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I would suggest you start by reading a lot because it would be very helpful. Start with the following book:
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I wouldn't stop there but I would definitely read it and get a grasp of a bunch of things.
the rule of law and dispute resolution are good institutions to have, but those aren't regulations on the market, nor do they prevent monopolies, nor are all monopolies bad.
> you get a mass boom, as speculation kicks in, you see people get massively wealthy, everyone wants the same, they all pile in! "Me too!" but at the first scandal, the whole edifice crashes down around your ears. Welcome to unregulated derivatives
this is just all wrong. i'm not going to get into it since i don't have all day, but here's ben powell again to educate you; https://www.youtube.com/watch?v=yRj2OSNWRC4
or if you prefer reading, i recommend The Housing Boom and Bust by Thomas Sowell