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NotCranky
ParticipantYes I am addicted to the blog and headed to the “poor house”.
An, Just think about this, Even though the 400k is hypothetically your’s. If the market tanks your money is gone and it’s “other people’s” money that you are trying to make the most of. In overpriced, risky enviornment like the San diego Housing Market that’s not a very good way to play it. Especially since you can not throw out the real possibility of becoming sick or losing your Job for longer than six months.When you are a really big fish then maybe you can mess around like this.
Using “other people’s” money in RE has been fantastic way to improve wealth but it is all about timing and understanding how to use it and luck. Timing is definitely not in play now. The luck will probably be bad luck.
Participant“In the end the market doesn’t care about justice in pricing, or historical precedent, it will be affordability that determines the market bottom.”
Absolutely agreed. I was merely expressing a sentiment. Its based on a wish for average younger people and conservative lower paid working class to get a fair shot…Yeah nothings fair and they will be alright.
Participant“In the end the market doesn’t care about justice in pricing, or historical precedent, it will be affordability that determines the market bottom.”
Absolutely agreed. I was merely expressing a sentiment. Its based on a wish for average younger people and conservative lower paid working class to get a fair shot…Yeah nothings fair and they will be alright.
ParticipantMy second question is, would $3926/yr be worth it for the safety of liquid cash just in case something happen? Such as a major accident or a job loss?
I am not going to debate cd’s vs money market that’s not the point.
If the stuff hits the fan accident loss of job illness,which is what you say your “hedge” strategy is for you still owe the $400K and have to pay on it plus the remaninder of the balance so its a slippery slope. Since you are using it as a hedge against bad luck at a time when you are way upside down or over leveraged in theory wouldn’t you go through it in a lot less than 102 years and what do you do with that big fat mortgage when your “hedge” is gone? I hope I am not misunderstanding you completely?
One other question about HELOC.If let say you have 400k equity in your house so you open a 400k HELOC and the property dropped by 400k, can you still withdraw from that HELOC?
I hope this is not about another “hedge” strategy :).
Helocs are generally for much less money there might even be a cap at 100k. I said the equity position should be very good I am not suggesting someone should ever heloc out the last dime.The bank will probably pull the loan back though and there are stipulations that you have to report loss of job and such I believe,if its true probably no one does.. I am really not the expert helocs and I have wondered some of those same things just never pushed myself to find out.
I better get some work done or else I am going to be in need of a heloc:). I will check back later. Hopefully someone will answer your questions and fill in any mistakes I am making.
ParticipantMy second question is, would $3926/yr be worth it for the safety of liquid cash just in case something happen? Such as a major accident or a job loss?
I am not going to debate cd’s vs money market that’s not the point.
If the stuff hits the fan accident loss of job illness,which is what you say your “hedge” strategy is for you still owe the $400K and have to pay on it plus the remaninder of the balance so its a slippery slope. Since you are using it as a hedge against bad luck at a time when you are way upside down or over leveraged in theory wouldn’t you go through it in a lot less than 102 years and what do you do with that big fat mortgage when your “hedge” is gone? I hope I am not misunderstanding you completely?
One other question about HELOC.If let say you have 400k equity in your house so you open a 400k HELOC and the property dropped by 400k, can you still withdraw from that HELOC?
I hope this is not about another “hedge” strategy :).
Helocs are generally for much less money there might even be a cap at 100k. I said the equity position should be very good I am not suggesting someone should ever heloc out the last dime.The bank will probably pull the loan back though and there are stipulations that you have to report loss of job and such I believe,if its true probably no one does.. I am really not the expert helocs and I have wondered some of those same things just never pushed myself to find out.
I better get some work done or else I am going to be in need of a heloc:). I will check back later. Hopefully someone will answer your questions and fill in any mistakes I am making.
ParticipantAN
You could hedge your bet or you could go bankrupt. The heloc or mortgage money in cd’s would be for very good equity positions and possesion other assets and at the very least non-employment income to cover. As soon as you use it to survive its a slippery slope so its better to avoid that mentality.ParticipantAN
You could hedge your bet or you could go bankrupt. The heloc or mortgage money in cd’s would be for very good equity positions and possesion other assets and at the very least non-employment income to cover. As soon as you use it to survive its a slippery slope so its better to avoid that mentality.ParticipantThanks for your time Former..I am relatively new here so you wouldn’t know that I have had issues #2 figured out for a couple of decades.I will look at those to see if the “affordibility” question is answered for me.I have come up with affordabilty at a lower point using these two methods.
Issue #1 is where the clarifications are helpful.I don’t think the down turn will be a slave to traditonal rates of appreciation for support. Let me put it stronger I believe the downturn will ignore completely traditional rates of appreciation for support.Just an opinion of course.
BTW I am happy either way although I feel there is more Justice in prices coming way down.In the self serving dept., near term I have equal opportunity either way in fact maybe more if prices stay higher and rates stay relatively low . I like to use my real estate license to help people make good investments so I kind of miss that. It’s a mixed bag.
ParticipantThanks for your time Former..I am relatively new here so you wouldn’t know that I have had issues #2 figured out for a couple of decades.I will look at those to see if the “affordibility” question is answered for me.I have come up with affordabilty at a lower point using these two methods.
Issue #1 is where the clarifications are helpful.I don’t think the down turn will be a slave to traditonal rates of appreciation for support. Let me put it stronger I believe the downturn will ignore completely traditional rates of appreciation for support.Just an opinion of course.
BTW I am happy either way although I feel there is more Justice in prices coming way down.In the self serving dept., near term I have equal opportunity either way in fact maybe more if prices stay higher and rates stay relatively low . I like to use my real estate license to help people make good investments so I kind of miss that. It’s a mixed bag.
ParticipantI saw AN post last night and you guys have beat me to it.
Just looking at the tax question in a straight forward way. Why would anyone want to pay the government $3 to get $1 back? Of course if you have to or want to have a mortgage the write off is a good thing leaving fairness to non-owners out of course..Mortgage money is pretty cheap still,even so
Putting mortgage money into savings long term is a no go obviously.Putting it into cd’s or opening a heloc and trying to time the market housing for leverage investment is another thing especially if there are other asset available to cover.Some people like the idea, some don’t but it has been successful over and over.The opportunity costs of having disappearing equity tied up in a house in a down cycle are big for average wealth people.This cycle for those holders me included, might end up like winning the lottery and watching it dissappear.Of course we have an advantage going forward because our debt load is low but not because we are making the most sound financial decision. Mortgage money is pretty cheap but most of us are dependent on wages to pay for it. I don’t think an investor needs to make a paid off house a sacred thing, regardless of how comfy it might be and it could be leveraged to good results.Another thing..If a house is not an investment why have so many of us paid for “homes” with the gains from other “homes” which would never have happened if we made a stupid investment into the first,second, third…one?
Yeah, I know I am preaching to the choir, mostly.ParticipantI saw AN post last night and you guys have beat me to it.
Just looking at the tax question in a straight forward way. Why would anyone want to pay the government $3 to get $1 back? Of course if you have to or want to have a mortgage the write off is a good thing leaving fairness to non-owners out of course..Mortgage money is pretty cheap still,even so
Putting mortgage money into savings long term is a no go obviously.Putting it into cd’s or opening a heloc and trying to time the market housing for leverage investment is another thing especially if there are other asset available to cover.Some people like the idea, some don’t but it has been successful over and over.The opportunity costs of having disappearing equity tied up in a house in a down cycle are big for average wealth people.This cycle for those holders me included, might end up like winning the lottery and watching it dissappear.Of course we have an advantage going forward because our debt load is low but not because we are making the most sound financial decision. Mortgage money is pretty cheap but most of us are dependent on wages to pay for it. I don’t think an investor needs to make a paid off house a sacred thing, regardless of how comfy it might be and it could be leveraged to good results.Another thing..If a house is not an investment why have so many of us paid for “homes” with the gains from other “homes” which would never have happened if we made a stupid investment into the first,second, third…one?
Yeah, I know I am preaching to the choir, mostly.ParticipantI am more or less center not loyal one iota to a party. I like him,Ron Paul on Foriegn policy and monetary policy concerns which perhaps not that many average Americans tune in and study deeply. His views on the Iraq war could playout big but as some have already posted he will be shot down for being “unpatriotic” and “not supportive enough of the troups” compared to the rest.He will be painted in the media as being weaker than the man or woman we need in case we really do have to “defend our way of life” which I always interpret to mean wealth, against Iran or others.Again I like him for some things better than I am going to like anyone else.
But he seems like a dyed in the wool republican on the other issues like immigration, guns, race which are the ones that are going to play out along with other similiar topics as the election cycle goes on and for better of for worse, do matter to me too and I sympathize with the liberals on these.
Some of his tax/spending ideas sound pretty unrealistic…good to hear but never going to happen and I think he loses credibility left and right if he stresses them to a nation wide audiences. IMO
My two cents..I don’t think he can win or even be a front runner very deep into the campaigns. He might work as a good lure to get people to look at the republicans for a while.Before Conchos good old boy comes to the forefront.
ParticipantI am more or less center not loyal one iota to a party. I like him,Ron Paul on Foriegn policy and monetary policy concerns which perhaps not that many average Americans tune in and study deeply. His views on the Iraq war could playout big but as some have already posted he will be shot down for being “unpatriotic” and “not supportive enough of the troups” compared to the rest.He will be painted in the media as being weaker than the man or woman we need in case we really do have to “defend our way of life” which I always interpret to mean wealth, against Iran or others.Again I like him for some things better than I am going to like anyone else.
But he seems like a dyed in the wool republican on the other issues like immigration, guns, race which are the ones that are going to play out along with other similiar topics as the election cycle goes on and for better of for worse, do matter to me too and I sympathize with the liberals on these.
Some of his tax/spending ideas sound pretty unrealistic…good to hear but never going to happen and I think he loses credibility left and right if he stresses them to a nation wide audiences. IMO
My two cents..I don’t think he can win or even be a front runner very deep into the campaigns. He might work as a good lure to get people to look at the republicans for a while.Before Conchos good old boy comes to the forefront.
ParticipantFor lack of better sense I swam in one like that with all the locals at a club in the phillipines. It was deep and green all the way to the bottom!When you splashed the sun caught the algae and made this cool phosphorescent effect.I hope it was algae!
Yes it was very low end and I like filipinos. Como esta ka?
mabajut giling giling masarap!LOL -
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