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Using the NY calculator is the wrong approach. Palo Alto assets will never trade for the same cap rate as Stockton or Modesto.
Investing in stocks vs real estate:
Only idiots leave equity in real estate.
You refinance and take all your money back out, as well as tax-free profits as soon as equity is high enough to do so.
Then you re-invest all that money into either more real estate or stocks, if you go with more real estate you repeat this process over and over.
In case you can’t hang in there financially when the market nosedives, just send the keys to the bank, they will eat the loss for you (try that with stocks, lol).
If you rent, 100% of your money is LOST forever, you have to deal with huge annual rent increases and get kicked to the curb when your Lord wants to sell to cash out his huge profit after you paid off his house for him.
Could you elaborate why the calc isnt suitable?
Why take equity out vs just getting a loan?
You refinance and take all your money back out, as well as tax-free profits as soon as equity is high enough to do so.
Then you re-invest all that money into either more real estate or stocks, if you go with more real estate you repeat this process over and over.
So, is it going to pop again any time soon? I can't understand where all this money is coming from over the last 3-4 years. Did everyone's income double in the last 3-4 years? I don't know a single person whose income has doubled.
I don't see how the answer can be low rates. We've had low rated for quite a while now.
So, is it going to pop again any time soon? I can't understand where all this money is coming from over the last 3-4 years. Did everyone's income double in the last 3-4 years? I don't know a single person whose income has doubled.
What drives me crazy is that people started seeing their primary residence as an investment, rather than simply a place to live
We bought a house in Idaho. Not sure yet what to do with CA one. Can rent it out, or sell it and not have a mortgage on the new purchase.
The Federal Reserve can’t control it anymore. All they can do is stop printing money. They can’t raise rates significantly enough to control inflation. There’s too much money out there buying up things. And the national debt is 30 trillion.
If you rent it out, and for some reason you decide to return to California, you will have a place to land. Someone who posts and comments on Patrick's site relocated from California (maybe San Diego?) to relocate to Arizona only to return here.
As a real estate flipper
If you rent it out
Are We Headed Into Another Real Estate Collapse?
Is there really any doubt in your mind?
Are We Headed Into Another Real Estate Collapse?
Is there really any doubt in your mind?
For me personally the price of entry has always been too high for me to dip my toe into the waters of real estate investing.
If you want rental property do it in a red state.
zzyzzx saysAre We Headed Into Another Real Estate Collapse?
Is there really any doubt in your mind?
When? How?
When? How?
But if a tenant can pay the carrying cost
probable outcomes.
Fortwaynemobile saysWhy take equity out vs just getting a loan?
Take equity out = do a cash out refinance aka getting a new loan with cash (equity) out.
With single units, like a condo or SFH, the rent/price ratio is not favorable. Duplex to 4plex get a little better ratio. To get more favorable ratio, one has to look at 5+ unit apartment. In fact, the more units/building, the better the ratio. I’m looking to scale up to 20 units rather than staying at 6-12 units.
Congrats on the house in Idaho. 🚀🚀
WineHorror1 saysWhen? How?
IMO, the combination of the ending of the foreclosure and eviction moratoriums and higher interest rates is going to be the catalyst for a housing downturn at some point. This is going to free up a lot of units, but it will take time.
I thought the moratorium were over. If not, why not?
As a real estate flipper
Eman saysAs a real estate flipper
If I were flipping, I wouldnt be using that calc either. At least not using it conventionally.
But the calc isn't meant to aid flipping decisions - it's meant to compare renting vs buying for typical cases where the owner stays put for multiple years, and to also help you understand how heavily each of the factors influence the result. I think it works pretty well for that.
Maybe you haven't looked at it lately, but it has many inputs, and all are adjustable, so using local market parameters is not only possible, but a centerpiece of the calc.
Someone posted a house in Sunnyvale sold for $2.8M. The guesstimate is the house rents for around $4.2k/month. Let’s say the seller came to you and said he’d sell it to you for $1.8M, what would you say? Also, if the housing market were to drop/crash, do you, or anyone here, think this house would drop below $1.8M?
As long as they don't tear out your walls to get pipe and copper wire or blow up the garage with a meth lab.
Yes, this issue was discussed on the board last week. Let’s see how it goes.
Yeah, not to own rental property, but as a landing spot if he or his family changes their minds.
I believe a new law was just passed (or is about to) where in multi-family your tenants can ban together and say, "The rent is too damn high", and the state will simply take it the fuck away from you. Oh, here it is:
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I see most people here now post about politics and the Wuhan Flu. I'm in agreement with most here: I'm a former liberal who voted for Bill Clinton but I voted for Donald J. Trump in 2016 and in 2020.
Today the world is in crisis and real estate prices in the US are crazy high.
I have friends who have just put their homes on the market. And others, who should know better, who are awaiting real estate lotto to be 'able to purchase' homes in communities in Arizona and Florida. I don't think I've heard people speak about waiting in line to buy up a tract house in a gated community since 2006. What gives?
https://www.realtor.com/news/trends/how-record-high-gas-prices-soaring-inflation-will-affect-homebuyers-and-owners/?source=patrick.net