Author Topic: Anyone else here buy their residence for cash?  (Read 2209 times)

Dividend Bro

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Anyone else here buy their residence for cash?
« on: September 15, 2017, 10:30:59 AM »
I am in a unique situation where I purchased my first real estate property (primary residence) for cash ($70k) in a MCOL city. The house is approx 15% of my total assets, will be more once fully renovated.

In the last several months, I have been working closely with a successful RE investor and have essentially created a job for myself in their company. I would be taking a significant paycut to do this, with the upside being learning how to run a successful multi-million dollar real estate company, and potentially uncapped earnings.

My original plan was to complete the reno of the house, refi, get a roommate, and repeat. However, if I don't get a mortgage on this property right now, my cost of living would be so ridiculously low that it would allow me significant economic freedom and a bit of a safety net in case this whole thing doesn't work out. I am just so focused on re-investing the cash back into the market or other higher earning opportunities that it's hard for me to ponder the benefits of a free living situation.

Question is, has anyone been in a position where they've purchased a house or apartment for cash to allow you the flexibility to pursue new or different opportunities? How has it worked out?

boarder42

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Re: Anyone else here buy their residence for cash?
« Reply #1 on: September 15, 2017, 10:46:20 AM »
I am in a unique situation where I purchased my first real estate property (primary residence) for cash ($70k) in a MCOL city. The house is approx 15% of my total assets, will be more once fully renovated.

In the last several months, I have been working closely with a successful RE investor and have essentially created a job for myself in their company. I would be taking a significant paycut to do this, with the upside being learning how to run a successful multi-million dollar real estate company, and potentially uncapped earnings.

My original plan was to complete the reno of the house, refi, get a roommate, and repeat. However, if I don't get a mortgage on this property right now, my cost of living would be so ridiculously low that it would allow me significant economic freedom and a bit of a safety net in case this whole thing doesn't work out. I am just so focused on re-investing the cash back into the market or other higher earning opportunities that it's hard for me to ponder the benefits of a free living situation.

Question is, has anyone been in a position where they've purchased a house or apartment for cash to allow you the flexibility to pursue new or different opportunities? How has it worked out?

keeping the capital liquid and invested would allow for more opportunities than tying it up in a fixed asset thats not easy to liquidate.

BTDretire

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Re: Anyone else here buy their residence for cash?
« Reply #2 on: September 15, 2017, 12:07:38 PM »
I agree wih boarder42 on this.
 However, we did pay cash for our home 23 years ago,
but we didn't have any grand plan that could have
required more money than we had after buying our home.

Rosy

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Re: Anyone else here buy their residence for cash?
« Reply #3 on: September 15, 2017, 12:32:43 PM »
Diversification is a good thing, owning one property clear and free is a fine thing. Depending on your next move, it may give you options for financing your next property. Lots to consider here.
Real estate is a tough business, but depending on your skill sets and the wise use of a good real estate lawyer so you stay out of trouble, it can be quite lucrative.
Of course like gold, one can buy coins or invest in a gold mine, flip a residence or invest in Reits - it all comes down to the opportunities at hand and your willingness to take on a different challenge. It is a risk, but one you have more control over than a simple investment.

So in essence you cannot compare the two as they are two very different things - does dealing in real estate suit your skill sets and personality?
Is this a great opportunity, the kind you have been looking for all along? What is the worst case scenario?...
 

Capt j-rod

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Re: Anyone else here buy their residence for cash?
« Reply #4 on: September 15, 2017, 12:47:12 PM »
I do rental properties... This is a strong move if played properly. Distressed property is usually difficult to borrow money to buy. This is when I pull up and pay cash. Renovate it nicely then leverage it to buy another. Yes there are way better investments than paying cash for your primary residence... BUT there is also a huge freedom when the monthly bills are nil. I suggest making a house payment to yourself and pretending that you have a mortgage. Once this builds up re-invest. The payment on a $70k house would have been about $500/month. As long as this money is invested wisely you will come out just fine and financially free of worry. Not having any bills allows you to have a large savings ratio as well as unlock opportunities like the position you are considering. Would I have borrowed? Probably yes with the rates this low. Did you screw up? NOPE! You won either way in my eyes.

 

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