Gosh, so many post in a day. I am swampped just to read all the postings.
This technician (assumes making 60K) purchased a house for less than 700K and within 4 years, it is appreciated to 1.1M. He paid (assume a 4% interest rate) 28K*4=112K in four years and if he sells now, he will get back over 300K tax-free. What’s his rate of return? 300K/112K, that is close to 300% within 4 years.
My point is that just like the tech boom in 1999, if you buy and sell right away, you are making big money. If you do not cash out, you will be in trouble. That’s also called the bigger fool theory. I respect the “fool” who bought and sold at the right time and laugh at the bigger fool who bought and hold although the difference between them may be just purely luck.
If I remember correctly, PS was calling for a 40% decline. For his 1.1M mansion, 700K is where it should be. So as long as he can afford the payment, everything is great.
Yes, only if he can afford the payment 🙂 As they said, devid is in the details.
