Real estate bros halp

My wife wants us to buy a dumpy house, restore it and then rent it out after we move on from the next city we are going to. I have been insistent in the past we NOT buy a house til all the boomers are dead. How fucked am I or is it feasible to make a profit this way?

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bump

find a house with an option to rent then buy at the end of the contract and wait to see what the market does......nigga

.. Okay that seems absolutely retarded user

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I own a dumpy house. I got it for cheap, done a couple improvements here and there, but it's still a shitshack. The way I see it is I can have the mortgage paid off in five or so years. Then I can go buy another house, sell my old house, then use the proceeds to pay off like half of the mortgage of the new place effectively making my mortgage on my new home as cheap as my old home and pay it off sooner.

This as opposed to buying a nicer home out the gate and paying more in interest over the years. Idk if it was a good idea, I guess we'll see. Part of my reasoning was that I didn't want to buy a nice home near the top of the market. So if my home loses 60% of its value due to market crash itll hurt far less than if I bought an expensive home.

I would honestly wait right now m8. You might find housing prices to go down pretty significantly in the next year, I certainly don't think they'll go up, and I think you can negotiate some pretty killer rent now.

That said, I just refinanced and got a 3% fixed rate 30 year mortgage, so money is incredibly cheap right now.

I took a similar approach. I bought a cheap house in a nice area, with good land. I'm basically in it for land value. If the market crashes, my hit isn't so bad and I'll be able to recover likely pretty quickly. It's also a place to live.

Real Estate Major here: It's viable, if you're going to put the money into fixing it up you may want to look at just flipping and selling, but alot of the value is impacted by your neighbors and the area around you. If you are going to rent try to buy in a college town or somewhere that has alot of people so that you can rent it out easily, also looking for a duplex rather than a regular house will pay its dividends. you'll get more $ per square foot every month

Fair point.

We will only be in the area we are going to for 3 years and I am horrified to try to rent this thing to someone. I don't want niggers living in it and destroying the home. I would rather just flip the thing outright.

The home we would buy and then flip(or rent, undecided yet) would be near a military base so I know there is some decent turn over there.

Also, I would be using a VA homeloan which means there is no down payment needed. I guess it would come down to the fees/realtor costs and how cheaply we can renovate. I know fuck all about this stuff and it horrifies me we would own something 3x my net worth.

Just wait for the market to fall dude, even if it doesn't "crash" prices are going to fall minimum 10-20% over the next year and probably more. At that point I'm going to by a duplex and rent out the other half so some wageslave can pay my mortgage.

Why do you think the market will pull back so much?

>buy $100k house
>she spends $150k to restore
>sell at $200k
never let women make business decisions

The competition among realtors is insane rn, your realtor's cut should be between 1 and 3% How handy are you? if you can DIY and make the upgrades your self (obviously not including electrical work) then you have a real opportunity and raising the houses value. Otherwise you will be contracting the work out and that gets expensive. How long do you expect to live there before you move? Is the mortgage going to be paid off before or after you start renting? Most people usually rent properties after the mortgage is paid off so that if they lose a tennant they dont have to worry about foreclosure

That is exactly my fear. She would do her damndest to make it a HGTV house and spend every fucking penny we have.

Imo a house you will be able to rent out for significantly more than the mortgage payment to half decent tenants is never a bad investment. If the market goes down after you buy it think of it as dollar cost averaging in.

Also since you plan on living in it you get access to better loan terms than for a pure investment property

Just because you don't need a down payment, doesn't mean you shouldn't pay a down payment. Don't buy something you can't afford. My house I can literally pay off, but since interest rates are so low I can make more money with the use of that money elsewhere.

The economic situation right now is pretty dire.

The U.S. economy suffered its sharpest decline since the Great Recession and the head of the Federal Reserve warned the second quarter would be even uglier. He said “We are going to see economic data for the second quarter that’s worse than any data we’ve seen for the economy." Yes the stock market is up, but the stock market is extremely expensive right now and most smart money is in cash. This could be a very, very, ugly couple of years ahead of us. You need to make sure you don't get over your head.

We would get a loan for the home and would only live in it for 3 years. I am handy and can do everything probably but electrical and plumbing. Is the realtor cut the only thing you lose money on in a transaction as the buyer?

>prices are higher than ever before in history, even after factoring inflation
>percentage of household income going to mortgage has increased a lot in the last 5 years
>mortgage deferment at all time high, it only delays people losing their mortgage by 3-12 months
>people who own rental properties are not getting rent from tenants and they are only allowed to defer 1 or 2 of their properties, rest will default
>increase in lending standards requiring 20% down-payment or more, from 1-5% people used to get easily

Less people will be buying and more people will be selling or foreclosing, simple as that.

>mortgage deferment at all time high, it only delays people losing their mortgage by 3-12 months
The really scary thing about that is that people needed help with their mortgages immediately after this crisis started. Which tells me they couldn't afford the house anyways.

I know that lending has gotten much stricter than before the subprime crisis, but it might not be strict enough.

So is buying a foreclosed property going to be our best move?

You’re clueless man, no offense. Real estate can be pretty intricate and obviously capital intensive. I would stay clear of it until you are much more educated on the subject. I’m a commercial landlord but when I first started in residential I had a masters degree in real estate finance and was still learning new things every day. Start reading and lurking on BiggerPockets, educate yourself fully before contributing your hard earned savings to a physical asset that can quickly become a liability and not an asset. I’ve seen many amateurs and newcomers burned in RE because they see an HGTV episode and think it’s an easy process that can take a few weeks. The show leaves many many things out, seeing as much of real estate is boring clerical work and obtaining permits. Is there money to be made this Avenue? Absolutely. You should only be renting if you are young or need ultra flexibility with moving. Start educating yourself first user

>smart money is in cash
Imo its better to be in PMs and crypto. I think we're headed for stagflation. I'm also long nonperishable foods. My pantry is stacked, boys.

I tried to rent a home. Whatever work you think will be required, triple it. You have to be an unscrupulous degenerate slumlord to make any money renting out properties. Don't listen to the fags that say "I have ten properties with a monthly income of $20000." All that money goes back into maintenance, insurance, mortgage, taxes, etc. Unless you stick it out for 30 years you wont really see much profit. Even then, if you calculate to inflation yadda yadda. It aint worth it.

Nope, best option is a short sale. Look it up, there will be a ton of them available in 6-12months and every time one happens it causes prices in the area to drop. They set up a chain reaction.

It very well might be. Banks will not release those all at once, but you'll need to watch the market closely.

Crypto has not proven to be very stable. Cash absolutely has risks of inflation, but I'm only talking of keeping it there while the market corrects.

buying a house in the next 3 months would be a terrible idea. These collapses take time, they dont crash overnight.

No shit fuckface. Shame you didn't get a degree in logic. There is a reason I created this thread.

Sounds like you bought the wrong home user. Don’t let one bad deal give you the wrong impression. Most of my properties are operating around a 9% cap and an effective IRR of 20%+. Just have to find the right deals and be patient, I typically browse 1000 listings before I start running pro formas and DCF analysis on maybe 3 of them. Have to weed through the shit to find the gold

rude desu

I’m just highlighting effectively how clueless you are here lol. The questions you’re asking are the ones that were being asked sophomore year in Finance 205. And here you are, on an anonymous forum trying to figure it all out. At this point, just give the money to your wife and let her invest it. No way she is dumber than you are

user got angry that he’s asking entry level questions and got called out for it. Nothing like trying to suffice you’re shitty formal education with an anonymous forum. Many of us were destined to remain in poverty.

I am asking entry level questions because up until now i have not even entertained the idea of buying a home for any reason what so ever. When I have some shitskin living in poverty larp about being a real estate expert it is rather annoying.