***Official Real Estate Thread***

[hammies]

We got in back in '97 for $260K. 5% down, $247K mortgage @ 7.9%, PITI was almost $2100/mo when you added in our PMI. Our AGI in those days was about $80 - 90K I recall. Of course we refi'd several times since then, most recent 15 years at 2.71%

We made our last PITi payment of $1750 2 years ago and our house at the time was worth about $1.3M.

 

[Mr Doof]

Californians, what do you all think is a reasonable/safe debt-to-income ratio for purchasing house? The national recommendation is about 36% but it seems most people in California play by different rules.

And if you do own a home and are comfortable sharing: what was your debt-to-income ratio when you purchased? And when do you buy?

I got used to paying 40-50% of my net income on rent, so doing same for a mortgage was easy.

Got to keep using that college cookbook of 1000 Potato Recipes for a long time......

 

[sdsrfr]

I got used to paying 40-50% of my net income on rent, so doing same for a mortgage was easy.

Got to keep using that college cookbook of 1000 Potato Recipes for a long time......

was gonna say somewhere near but no more than 50% - although I’m sure many do.

 

[SurfFuerteventura]

Bought lot with wedding gift cash as a down payment, paid loan down for 2 years. This instead of the van I wanted to use for surf trips round the Iberian peninsula whilst living in Madrid.

Low builders loan rates prompted us to use the lot as collateral for one. Was planning on selling the home after, and then buying the van free n clear.

Turns out we got built all told for 130k. With only a 120k mortgage loan, used funds to pay off lot loan and homes builder.

1 month after completion the Madrid Train bombings took place. I was late to the station that day, luckily for me. My usual commuter train was one that blew up in Atocha. That very same night, after volunteering for 8 hours at the body bank they set up at the Juan Carlos Fair Center, drove home and proposed to wife that we rent in Madrid and get the hell out. Never looked back, especially after we were offered gainful employment down here.

Our DTI was under 25%. We racked it up to 50% and hacked away at the loan. Haven't worked over the table since the 2008 crisis... don't ever plan to again either. Refi'd to half mortgage payment as soon as we lost the unemployment subsidy 2 years after losing the job.

Now, almost 20 years later, we have 2 rentals in Madrid, free and clear, and our residential home is under 70k in debt on a property easily worth 380k-420k depending upon how fast you want to sell.

Sitting on over a million in equity, we are currently looking at our old and in the way home next. We'll use the equity in our residential property down here, and pull the trigger on a nice seaside condo in a quiet coastal Spanish or Portuguese fishing town.

R.E. is the way.

 

[casa_mugrienta]

Californians, what do you all think is a reasonable/safe debt-to-income ratio for purchasing house? The national recommendation is about 36% but it seems most people in California play by different rules.

And if you do own a home and are comfortable sharing: what was your debt-to-income ratio when you purchased? And when do you buy?

We put something like 30% down for 10% DTI.

 

[StuAzole]

I said it earlier, but I think the concern will come from HELOC’s that are not yet in use thus not showing in the “numbers” yet.

Once their cash flow runs dry - the compulsion will be to grab it from where it is available and the cheapest, which is from their home equity.

Have to bet the banks have drawn up some really enticing loan products for the unassuming.

Why would they run dry? Unemployment isnt an issue.

 

[sdsrfr]

Why would they run dry? Unemployment isnt an issue.

sh!t happens in life and it’s expensive. thats why.

and when it does you can spend your cash, you can spend the banks money or you can spend your house’s money.

house money comes at an attractive rate and banks aren’t going to go out of the way to point out the risks.

 

[silentbutdeadly]

took out a HELOC during Covid for two small projects. Paid it off quickly. I imagine I don't represent the majority

 

[hammies]

We put something like 30% down for 10% DTI.

A realtor once told me lenders will go higher DTI for an expensive house than for a cheap one, because your minimum cost of living excluding debt service is relatively constant.

 

[casa_mugrienta]

A realtor once told me lenders will go higher DTI for an expensive house than for a cheap one, because your minimum cost of living excluding debt service is relatively constant.

I dunno.

What I was approved for was a mortgage 3x bigger than I took out.

 

[Subway]

I said it earlier, but I think the concern will come from HELOC’s that are not yet in use thus not showing in the “numbers” yet.

Once their cash flow runs dry - the compulsion will be to grab it from where it is available and the cheapest, which is from their home equity.

Have to bet the banks have drawn up some really enticing loan products for the unassuming.

They have and they are bombarding me. I’m bad enough about not quickly paying off the mile and perks building credit cards I use, last thing I want or need is another line of debt lol. (Which is precisely why they keep mailing me offers And by any standards my debt to income ratio is perfectly fine. It’s still retarded paying high interest credit card debt, but they really do get you hooked on the miles and perks. sometimes I’m better about it than others.

I was good about not leaning on them too much when my business was basically dead in the water for 16 months. But once all that billing started coming back, well, flights start getting booked more impulsively and more often

as @Random Guy wisely says ”it’s all just blips on a screen man it doesn’t matter”

 

[Muscles]

Put 20% down for a house in Hawaii that was in terrible shape. My PITI was about 50% of my income starting out. This was in 2017 and the rate was 4.25%.

I spent the last 5 years remodeling the house on the weekends. I became a major DIYer and put another $50K in materials into the house.

I watched the interest rates closely during Covid and locked in a non-VA 2.5% 30 year mortgage. My payment is now $900 less than when I first bought. At the peak of the RE craziness I could have cashed out ~$900K in equity but didn't.

I've done well so far in RE but I still remind people we've been in a crazy Fed controlled market since 2008. Everyone is a genius when rates are low and homes keep going up in price. I'm glad I bought when I did but I was careful with not overextending myself. My mortgage is currently the only debt I carry and I've never taken equity out of the house.

 

[SurfFuerteventura]

Put 20% down for a house in Hawaii that was in terrible shape. My PITI was about 50% of my income starting out. This was in 2017 and the rate was 4.25%.

I spent the last 5 years remodeling the house on the weekends. I became a major DIYer and put another $50K in materials into the house.

I watched the interest rates closely during Covid and locked in a non-VA 2.5% 30 year mortgage. My payment is now $900 less than when I first bought. At the peak of the RE craziness I could have cashed out ~$900K in equity but didn't.

I've done well so far in RE but I still remind people we've been in a crazy Fed controlled market since 2008. Everyone is a genius when rates are low and homes keep going up in price. I'm glad I bought when I did but I was careful with not overextending myself. My mortgage is currently the only debt I carry and I've never taken equity out of the house.

RE equity is a great retirement fund vehicle.

900k would get you at least 2 rentals that could "pay for themselves", and once paid off would leave you sitting in a place where all you have to do is worry about what tide you want to surf.

No need asking how I know, it's my personal experience.

 

[sdsrfr]

RE equity is a great retirement fund vehicle.

devils advocate would say RE is a great investment vehicle - so long as the natural disaster report comes out clean.

I was really happy to see my house was not in an area dependent on a dam not failing. made me appreciate neighborhoods that were the first built in a given area.

The surveyor who had their pick of the land and knew what was up.

 

[grapedrink]

RE equity is a great retirement fund vehicle.

900k would get you at least 2 rentals that could "pay for themselves", and once paid off would leave you sitting in a place where all you have to do is worry about what tide you want to surf.

No need asking how I know, it's my personal experience.

Basically my play. Got one investment property that will be operational as a short term rental soon. Year round market. Next 2 will be 1 in a strong summer and 1 in a strong winter season, and will multiply up from there. Both established vacation areas that have been around a lot longer than the AirBnb, are mostly built out and have recurring visitors. Might sell off some if they give me headaches and the appreciation is there, and roll that into paying down the winners.

Mailbox money 4 lyfe

 

[bluemarlin04]

RE equity is a great retirement fund vehicle.

900k would get you at least 2 rentals that could "pay for themselves", and once paid off would leave you sitting in a place where all you have to do is worry about what tide you want to surf.

No need asking how I know, it's my personal experience.

I have a paid off commercial zoned condo I rent out. In the PNW.

The cash flow is incredible. And I can use it anytime I want

Edit: I should add. I sold my property at the absolute peak of the market and made out close to a half million in tax free money.

I still can’t believe someone paid close to 1500 SF for my beach cottage but I wasn’t gonna say no.

 

[SurfFuerteventura]

devils advocate would say RE is a great investment vehicle - so long as the natural disaster report comes out clean.

I was really happy to see my house was not in an area dependent on a dam not failing. made me appreciate neighborhoods that were the first built in a given area.

The surveyor who had their pick of the land and knew what was up.

Knowing where NOT to build is an art few appreciate.

 

[casa_mugrienta]

 

[grapedrink]

Knowing where NOT to build is an art few appreciate.

Not in California. Here we are building everywhere we possibly can because we don’t have the luxury of choosing

 

[casa_mugrienta]

Knowing where NOT to build is an art few appreciate.

But I want a house on the beach.