Real Estate Crash thread

[Name Redacted]

https://www.npr.org/sections/money/2...ly-about-money

Man, Asheville does not score well.

I'd say that any time that you are on the other end of the spectrum from TX you are probably winning.

[Benny Profane]

Good point.

[schuss]

https://www.npr.org/sections/money/2...ly-about-money

Man, Asheville does not score well.

I mean, it's become a trendy destination, which means you need money to live there now. Really any touristy spot will score shitty on these things as things like housing are artificially inflated by the larger STR market and desirability of the area.

[Benny Profane]

And Boomer retirees.

[dunfree]

The only surprise is Cheyenne, wy

[altasnob]

From July 1, 2020 to July 1, 2021, Idaho had the highest rate of population growth, at 2.8% (about 53,000 people). Texas had the largest numeric growth, adding about 310,000 residents. New York saw the biggest rate of decline, losing 1.6% of its population — nearly 320,000 people.



Washington was among the fastest-growing states. Here’s why that’s no longer the case

https://www.seattletimes.com/seattle...nger-the-case/

[Tryingtostaywarm]

Need some advice from the gurus here.
Own home in Colorado.
Bought for $450k, put some sweat equity of my own work(remodeled entire house), in a very good area
Worth $550k now
Current mortgage VA is $1900 @ 2.35%
My income is $115k a year.
I'd like to keep this as a rental long term(20-25 years), refi to conventional, and buy another property in my area for same amount up to $600k using VA again.
Refi to conventional looks like this.
$6k closing costs
3.5% with NO pmi
New mortgage $2550 @ 3.5%
Rental amount = $2700
So, basically I am breaking even on the mortgage to rental income ratio.
My area will never be bad as I'm in a very convenient location...I would say my house will be $750k in say 15-20 years if not sooner as most houses are already $600-1mil in my direct area. My house is 1500sq ft, on a 1/4 acre with a 20x40 shop.
Is this mortgage to rental income not even realistic or even worth doing? Am I missing something here?
I can float the cash for any emergencies up to say $15kish if it came to it.
My biggest concern is being on $115k a year income, and having a $450k and a $600k loan out on me if I decide to go this route.
Basically, what would ya'll be looking at in this situation that I am not factoring in etc.
Or do I keep this one on VA loan, and go conventional with another one?
Thanks ya'lll

[Name Redacted]

Need some advice from the gurus here.
Own home in Colorado.
Bought for $450k, put some sweat equity of my own work(remodeled entire house), in a very good area
Worth $550k now
Current mortgage VA is $1900 @ 2.35%
My income is $115k a year.
I'd like to keep this as a rental long term(20-25 years), refi to conventional, and buy another property in my area for same amount up to $600k using VA again.
Refi to conventional looks like this.
$6k closing costs
3.5% with NO pmi
New mortgage $2550 @ 3.5%
Rental amount = $2700
So, basically I am breaking even on the mortgage to rental income ratio.
My area will never be bad as I'm in a very convenient location...I would say my house will be $750k in say 15-20 years if not sooner as most houses are already $600-1mil in my direct area. My house is 1500sq ft, on a 1/4 acre with a 20x40 shop.
Is this mortgage to rental income not even realistic or even worth doing? Am I missing something here?
I can float the cash for any emergencies up to say $15kish if it came to it.
My biggest concern is being on $115k a year income, and having a $450k and a $600k loan out on me if I decide to go this route.
Basically, what would ya'll be looking at in this situation that I am not factoring in etc.
Or do I keep this one on VA loan, and go conventional with another one?
Thanks ya'lll

Research DTI and LTV ratios and apply them to your situation. Talk to a bank or broker.
How much equity do you have in the home? How much will they let you pull out (LTV) on a cash out refi for a DP on the new property? Is that enough for a DP on the second property ($150k on a $600k property)? They'll probably want at least 25% on that.

And at the end of the day, just paying the mortgage isn't worth it. You need to be able to put money away for repairs, pay yourself an income for your troubles. Run it like a business, keep your personal money from flowing into it ever. Or else it is a charity, not an investment.

[Skistack]

IMHO those numbers don’t make any sense. Miss one rent pmt and you’re under water for the year.


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[joeshek]

Need some advice from the gurus here.
Own home in Colorado.
Bought for $450k, put some sweat equity of my own work(remodeled entire house), in a very good area
Worth $550k now
Current mortgage VA is $1900 @ 2.35%
My income is $115k a year.
I'd like to keep this as a rental long term(20-25 years), refi to conventional, and buy another property in my area for same amount up to $600k using VA again.
Refi to conventional looks like this.
$6k closing costs
3.5% with NO pmi
New mortgage $2550 @ 3.5%
Rental amount = $2700
So, basically I am breaking even on the mortgage to rental income ratio.
My area will never be bad as I'm in a very convenient location...I would say my house will be $750k in say 15-20 years if not sooner as most houses are already $600-1mil in my direct area. My house is 1500sq ft, on a 1/4 acre with a 20x40 shop.
Is this mortgage to rental income not even realistic or even worth doing? Am I missing something here?
I can float the cash for any emergencies up to say $15kish if it came to it.
My biggest concern is being on $115k a year income, and having a $450k and a $600k loan out on me if I decide to go this route.
Basically, what would ya'll be looking at in this situation that I am not factoring in etc.
Or do I keep this one on VA loan, and go conventional with another one?
Thanks ya'lll

Agree - these numbers are a no-go. Do those mortgage numbers include cash-out? Do you need to cash-out refi to get into a new place? If no, current mortgage (assuming it includes escrow for insurance and taxes) at 1900, with rent at 2700 would be plausible.

[Tryingtostaywarm]

Agree - these numbers are a no-go. Do those mortgage numbers include cash-out? Do you need to cash-out refi to get into a new place? If no, current mortgage (assuming it includes escrow for insurance and taxes) at 1900, with rent at 2700 would be plausible.

Thanks fellas for the insight.
So, talked to lender again today.
He is recommending I keep current mortgage of $1900 @ 2.25, rent at $2700+ because I'll never be able to get that rate back.
Go conventional on 2nd home(primary residence) which should be a lower rated say..3%ish, take out HELOC of say $50k on my $100k equity, put 5% down on the conventional @ $40k or so(on a $550-600k) home.
Right move? Wrong move?
I am extending my finances here a little bit just due to I'm in the Denver market. I really want to keep this current house because location is key, and I'll never lose money on it ever...that's why I am trying my best financially to make this happen even if it extends me a bit for a short period. Long term investment.

[skiballs]

I'm in the Denver market. I really want to keep this current house because location is key, and I'll never lose money on it ever....

Oh boy… waiting for bunny to chime in.


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[Name Redacted]

Thanks fellas for the insight.
So, talked to lender again today.
He is recommending I keep current mortgage of $1900 @ 2.25, rent at $2700+ because I'll never be able to get that rate back.
Go conventional on 2nd home(primary residence) which should be a lower rated say..3%ish, take out HELOC of say $50k on my $100k equity, put 5% down on the conventional @ $40k or so(on a $550-600k) home.
Right move? Wrong move?
I am extending my finances here a little bit just due to I'm in the Denver market. I really want to keep this current house because location is key, and I'll never lose money on it ever...that's why I am trying my best financially to make this happen even if it extends me a bit for a short period. Long term investment.

That's a better scenario (a VA loan is different than a Conventional BTW). But it still seems to put you into a bind if the housing market were to tank again. You would be very close to being under water on two homes.
Do you have the money saved to float the rental if you can't find renters?
What if you get a big assessment or need a new roof on either place?
Are you including HOA fees, taxes, insurance, utilities, etc on both properties?
Will you need to furnish another home? I just had to replace a fucking microwave and it was $1K all in! Good thing I had a fund for that.

[Dantheman]

I just had to replace a fucking microwave and it was $1K all in! Good thing I had a fund for that.

The fuck?

[Benny Profane]

Oh boy… waiting for bunny to chime in.


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Just stay away from dry grass and high winds.

[Ted Striker]

That must have been some microwave

[Tryingtostaywarm]

That's a better scenario (a VA loan is different than a Conventional BTW). But it still seems to put you into a bind if the housing market were to tank again. You would be very close to being under water on two homes.
Do you have the money saved to float the rental if you can't find renters?
What if you get a big assessment or need a new roof on either place?
Are you including HOA fees, taxes, insurance, utilities, etc on both properties?
Will you need to furnish another home? I just had to replace a fucking microwave and it was $1K all in! Good thing I had a fund for that.

You are 100% correct that this is a gamble, ableit a very stable one compared to other investments.
Problem I forsee happening. Currently, I can afford a second property in Colorado. In the future, I don't think that'll be the case.
I can float the rental for a year no problem + any problems that should arise up to say $15-20k cash.
Assessment/HOA is a non-issue. I don't do HOAs. Furnishing all that is already taken care of.
The only reason I am thinking of doing a rental is cause I can do all the work for it myself. As in, I can do all repairs, including roofing, myself minus HVAC.

[Name Redacted]

That must have been some microwave

We got gouged like no other but had no other option that would get a microwave into the unit by the time the folks paying $3500 for a week's stay in the unit checked in. Cost of doing business. The place cash flows quite well so not a dent in the repair budget.

[Yukonrider]

Need some advice from the gurus here.

Sounds like the HELOC is the way to go. The rate on your primary is really good, and I wouldn't change it. The $800 you can get for renting your primary isn't bad, but depends on how much you need to borrow from the HELOC to get the 2nd.

Your DTI will be the limiting factor, especially on that income with those notes. What does the math on the new place look like as far as payments and such? If this is actually a long term play it will be somewhat difficult to lose, but you will eventually need to weather a storm, so being cashflow positive is good, especially if you can't cover losses for an extended period of time.

[fastfred]

Just cause the denverpost and every other media outlet is announcing a minimum 15% gain for the metro area doesn't mean shit

It means they drank the coolaide that realtors zillow and mortgage brokers spewedout to prop up there personal interests

My unfortunate prediction for 2022 is that chickens are coming to roost this year the mental fall out of a sick society and the economic reckoning from the covid hangover is coming tell me I'm wrong in Dec 2022 please

[skiballs]

I liked the deleted post better.


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[fastfred]

fuck an a
I deleted my other post

your scheme sounds just like 2005 don't do it seriously don't do it

you only got 100k in equity that really isn't shit that's nothing in the colorado or metro denver market that 100k can disappear tomorrow

so you are going to borrow against that equity to buy another over priced property unless you are going to clear half of the rent into your pocket that doesn't work your going to borrow against nothing to buy another over pirced place just no

things are all hot and perfect right now but you will be left holding the bag when no one wants to pay 3k for rent and you are over extented (2005)

once the boomers starting shitting in bed and interest rates go up the awesome never going to bust denver market is going to do that did you miss 2007 even 2001 wasn't pretty either
your late to the game don't do dumb things

not trying to be an asshole just being realistic

[fastfred]

I liked the deleted post better.


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drugs and alcohol and a ten plus hour day herding cats
then I went to target hoping to see some milfs and all I saw was a fatty with a box of cupcakes she shouldn't be eating and I stood there high as a kite wondering what happened to society along the way
I guess milfs only shop from 9-1 (lessoned learned from two weeks ago)

[skiballs]

It ain’t the booze and drugs my friend.
The hands of time can be a real motherfucker.


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[neufox47]

That must have been some microwave

Welcome to the world of built in microwaves! We make them special so we can charge you 5x the amount they should cost!