We are first time homeowners buying a house with cash. Does it make any sense to still finance to put the money back into stock market?

My fiance and her financial advisor seem to think this is a good idea, but I am really not on board. US 30 year bonds trade at 2.8% yield last I checked. The best fixed 30 year rate we can get for a mortgage is 4.25%. If smart money is saying a good 30 year risk free yield is 2.8%, I have no clue why we would pass up the equivalent of getting a risk free 4.25% yield.

The arguments for getting financing are that the stock market on average can earn 7-8%. I am really skeptical of this though because we aren't doing the investing ourselves into indexes, the advisors firm is doing the investing and taking their fee (Yes I know. But that's a whole 'nother battle). In addition, PE ratio's indicate the markets at a high, and in my opinion this is a perfect time to take out some money and invest it in say – a house.

That said, the other argument for financing is that the effective rate of financing is lower because mortgage interest is deductible from taxes. Admittedly I know nothing about taxes, but it seems to me like that can't possibly be so significant an amount as to tip the tables.

Anyways, we need some neutral help from someone who has been through this or knows what they are talking about. Helpful thoughts please? Is there anything we aren't considering? We close soon and still aren't confident about any of our options. Really appreciate the help.

More real estate tips at Program Realty Wix site

Advertisements

$1350 rent vs $2800 monthly mortgage & hoa? Rent vs Buy

Been in rent stabilized apt since 2011. Rents moved up from $925 (I think) to $1350 currently over the years (goes up 2 to 4%? Each renewal). 1 bedroom apt. Started to look for coops usually range in $350k to $450k range. I figured after 70k to 80k down payment (excluding the closing cost and other fees) the monthly payments would come down to $2,800 to $3,000 depending on purchase.

Without disclosing any further (personal financial info) does this make sense rent vs buying in context good investment for retirement?

I don't plan to own the coop for investing rather have it as a form of forced saving/ something to fall on as. opposed to paying ever rising rents.

Currently I have 1 Bedroom the coop would be 2 bedroom. I don't care whether its a rental or coop for me a roof is a roof. Coop is a choice I would make due to several personal reasons which I don't want to disclose.

***Queens NYC area is must and has to be walkable distance to train maybe 7.

Q.1.In terms of having more money for retirement is it advisable to buy or rent right away? Or do I save more by renting? How long can I do that for can someone give me insight on numbers or how to compute?

Q.2.Is there any point in timing the market or just dive in? NYC

Q.3.Is it advisable to take money out of 401k I think first time buyers some penalty free withdrawal? Might also tap into stocks that I have been purchased via job — do you feel liquid cash is a must instead of all this?

Q.4. If there is buyers remorse or I find it absolutely beyond my means to be able to pay monthly mortgage+whatever they make you pay in coop what is my recourse? I heard coops are nightmare to resell as the board can deny your buyer and never tell you why?

Q.5. For $300k to $350k what's best purchase option coop / condo / house? Specific to Queens NYC I plan to use it as place to stay not to resale or anything but if worse comes to worse maybe sell it when I am old?

Q.6.Not keeping into account that I might be able to work forever or even next year (hypothetically speaking) how would one calculate what you can afford? My worse fear is no income coop ownership.

Q.7.Is real estate the only best way to invest for retirement besides stocks? (Ignoring the 401k stuff) I am talking about you trying to get max possible returns without risking it.

I don't believe in taking responsibilities without thinking and than being forced to go through it so am trying to think this through. Everyone else around me probably thinks I am thinking about this way too hard. Frankly home ownership is to me like raising a child huge huge responsibility.

I feel most of my fear comes from not knowing the exact numbers of monthly $$ estimates. I would get anxiety from surprise increase in monthly HOA when I already feel as opposed to renting the owning cost is almost double.

I personally would love to just keep renting forever and keep moving to lower rent areas and use that money to invest in stocks or something?

Stick to coop vs condo, since house owner is simply not possible in queens for under $350k that too close to a subway line.

More real estate tips at Program Realty Wix site

[Update] Seller’s home appraised 70K shorter than expected

I created a post a couple weeks ago, and I just wanted to post an update with the resolution.

TL;DR Backstory: we were trying to buy a house in southeast MI, and the appraisal came back 70k too low. We disagreed with the results, and weren't sure what to do next.

Resolution: we switched lenders and appraised again. The new appraisal came back 10k above target.

I really appreciate the feedback we received early-on, and I'm very happy we can move forward with the purchase, with confidence that we did not overbid.

Just a small follow-up question: should I share this information with my original lender? Maybe even send them the new appraisal? This seems like a very severe discrepancy, which might be worth investigating.

More real estate tips at Program Realty Wix site

First Time Buyer – Home Purchase Questions

(Location – NJ, USA)

My wife & I are looking to purchase our first house. We found one that we like, but its listing price ($375K) was slightly above our purchasing comfort zone . Our realter said that, based on comps, we could get the house for cheaper than the listing. Our initial offer was $340K at our realtor’s recommendation. Seller countered with $365K. We countered with $350K and they came down to $360K. We then went to $355K expected to end up meeting in the middle at $358K; however, they came back and said they will not sell it for anything less than $360K. We are pre-qualified for much more than that, so mortgage isn’t a question (and monthly payments don’t change that much between $350-360K).

The house has been owned by a redevelopment firm since 2009. They listed the house for sale in 2009 ($459K-$389K) and in 2010 ($369K-$364K). The house sat vacant for several years and they re-listed the house at $375K in September of this year after interior renovations. The neighborhood is nice and adjacent to a neighboring town that has seen a recent real estate boom (which we are generally priced out of). No flood zone concerns.

A few questions:

-The tax assessment increased from $248K in 2016 to $373K in 2017 (50% increase!). Would interior renovations cause this increase? (would only be interior as nothing has been added / fixed up in the exterior). Can the seller get involved with tax assessment and could they potentially manipulate the appraisal to be able to increase the listing price?

-Our realtor said that the purchase would be $13K less than the assessment, giving us immediate equity, but is that true? I’ve read that assessments are averages and have little to do with the individual property value. We are aware of and factored in the higher property taxes to our projected monthly mortgage payment.

-Our realtor said that additional negotiation can occur after inspections. I’m guessing that is true? We know that the seller will replace the water heater / furnace (estimated at $5K) if we accept the $360K offer. There are other things we know that will need addressed (radon mitigation system needs improvement; basement sump needs a backup; need to install a washer / dryer hookup; gutters need cleaned and guards installed) that we were hoping to leverage on the seller if possible.

-Assuming inspections don’t find significant issues, getting this house $15K off the listing price feels like an accomplishment; however, is it?

More real estate tips at Program Realty Wix site

Seeking opinions on relative worth of our condo (very simple questions)

I plan to sell my condo soon. I live in a ~120 unit gated community in Atlanta. My unit is somewhat unique in the neighborhood.

Two close comparables just sold for $192 and $194K. The key differences between mine and those two are: – those are 2 floors, 2 BR/1.5BA, 1050 sqft – mine is flat, 2 BR/2BR, 1100 sqft

Trying to figure out if (all other things equal) these differenes would push my unit above or below the prices they got? Thanks all.

More real estate tips at Program Realty Wix site

Erentpayment.com: If you were expecting to them to give you your tenant’s money stop holding your breath

If you use erentpayment.com you are likely hosed. Get your tenants to cancel before the next payments are due.

Check out this thread at BiggerPockets

Rick, the manager keeps changing his story on what is actually going on. Here is his latest explanation.

Delayed October Payments We regret to inform you that our payment processor, eCheckit, has informed us that it expects to file for bankruptcy protection shortly. We are told that it suffered losses due to a fraud and that its processor, Check Commerce, has held over $4 million of it's funds and will not release the funds to the intended recipients at this time. Please note that eRentPayment had nothing to due with the fraud eCheckit suffered. It was apparently caused by another client of eCheckit.

The transactions potentially affected were submitted after approximately 7:31:00 PM (Pacific time) on 10/03/2017 through approximately 7:01:33 PM (Pacific time) on 10/12/2017. Any transactions submitted after this time period should not be affected as they are being processed through eRentPayment’s new direct bank relationship. Similarly, any future transactions should not be affected as they will be run through the new direct processing relationship.

We do not know if or when Check Commerce will send the pending transactions to the recipients. Accordingly, you should consider your options including having the tenant contact his or her bank to request the transaction be reversed. Specifically, the tenant may initiate a return for an ”Incomplete Transaction.” We understand that the return code for this is “R10” and the bank will require a written statement from the tenant. Also, the tenant will have a limited time period to request the return from his bank, usually within 60 days from the date of the transaction.

Although people that were due payments after the affected window are complaining that their payments have not come through either.

More real estate tips at Program Realty Wix site

EXIT Choice Realtors and brokerage negotiating

Hello. I’m going to try to keep this post short and simple so if you need more details, please ask.

I am in a position to join EXIT Choice Realtors. I also have been accepted to a good grad school for IT. I can’t decide which to do, school means debt, real estate is risky.

I’ve decided that I will join EXIT if they agree to pay my start up fees and first year dues. I was quoted at $750 USD by the brokerage for total start up fees. Is this something that happens? Keep in mind, I have nothing to lose, if they say no- I’m out of there and I go to school I’m January.

Another thing. Thus business model that EXIT has is ringing slightly MLM to me. I get 30% of my sale, my recruiter gets 10%, and the brokerage gets 60%. Is this kind of fishy to anyone else or is that just the way the industry is?

Thank you! I would also like to hear if anyone has experience with EXIT Choice and what their thoughts are on the company.

More real estate tips at Program Realty Wix site

Relocating and buying

We've decided to trade in Los Angeles for Colorado but I have questions on logistics.

I'd like to sell the LA home and move straight into a new home in CO, but how do I do this? I need the profits from the sale for our down payment.

To make things a little more complicated, our jobs won't kick in until at least a month after moving, so we won't have a paycheck to show the bank for our new loan.

I'm open to any ideas and advice!

More real estate tips at Program Realty Wix site