Author Topic: Best ways to save for real estate  (Read 2096 times)

Lan Mandragoran

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Best ways to save for real estate
« on: June 13, 2017, 08:00:29 AM »
I'd like to just have roughly 100k ready for good opportunities in real estate or otherwise, but the specifics of how I should save for that I go back and forth on.

On one hand I could just stick everything in cash, but thats obviously going to burn a hole in my bank account anytime I'm in the process of saving.

On the other I could do something like higher than normal bond percentages in my investments until I'm ready to pull that out.  This is what I currently do but can't help but feeling I may be missing something or that the risk of the stock market dropping right when I need to have the money for a downpayment isn't worth it.

Opinions :)?

Cwadda

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Re: Best ways to save for real estate
« Reply #1 on: June 13, 2017, 11:59:40 AM »
Why do you need $100k cash to get started? You can buy a $100k house with $20k down. Do you feel the need to buy properties with all cash? If so, why?

Lan Mandragoran

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Re: Best ways to save for real estate
« Reply #2 on: June 13, 2017, 01:32:31 PM »
Sorry I should have been more clear.

I dont need 100k to start. I have 1 duplex already. I just want money to make the most of oppurtunities,  I dont want the day to come where I see a 1.5% rent 4plex in a B neighborhood and not be able to quickly pull the trigger.

I would start keeping my eye's open at 30k(earlier if my wife is willing to do another move and do a FHA), 100k was just a number meant to be 25% of a large investment (I could do FHA who knows). 

I definitely wouldn't be doing all cash(with no leverage why not just index), but typically non-live in places will take a higher % down payment.


Anyway, the point isn't whatever the number is, more about where someone should put money that's 2-5 years from being used.  Currently my answer is higher % bonds than I would do if I were using a all index fund strategy, but idk.
« Last Edit: June 13, 2017, 01:35:04 PM by Lan Mandragoran »

Cwadda

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Re: Best ways to save for real estate
« Reply #3 on: June 13, 2017, 02:12:14 PM »
Sorry I should have been more clear.

I dont need 100k to start. I have 1 duplex already. I just want money to make the most of oppurtunities,  I dont want the day to come where I see a 1.5% rent 4plex in a B neighborhood and not be able to quickly pull the trigger.

I would start keeping my eye's open at 30k(earlier if my wife is willing to do another move and do a FHA), 100k was just a number meant to be 25% of a large investment (I could do FHA who knows). 

I definitely wouldn't be doing all cash(with no leverage why not just index), but typically non-live in places will take a higher % down payment.

Anyway, the point isn't whatever the number is, more about where someone should put money that's 2-5 years from being used.  Currently my answer is higher % bonds than I would do if I were using a all index fund strategy, but idk.

Ok I understand now! Do you already have your Roth IRAs maxed? This could be a decent option, because you can always withdrawal contributions without penalties or taxes. This is $11k/yr.

+1 for doing FHA. Picking up multifamily investment properties with only 3.5% down is almost too good to be true.

Neo

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Re: Best ways to save for real estate
« Reply #4 on: June 13, 2017, 09:13:20 PM »
You can buy multifamily investment properties with FHA loans!? I have always been asked to put 20-25% down? Is there some trick to getting FHA loans for rental properties?

Lan Mandragoran

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Re: Best ways to save for real estate
« Reply #5 on: June 14, 2017, 05:18:05 AM »
4 shore! :-P.


Yeah I think the stipulations are it needs to be residential (4 plex or less) and owner occupied for at least a short period

No trick. I'd think most lenders should know that so just ask :)

Cwadda

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Re: Best ways to save for real estate
« Reply #6 on: June 14, 2017, 07:49:52 AM »
You can buy multifamily investment properties with FHA loans!? I have always been asked to put 20-25% down? Is there some trick to getting FHA loans for rental properties?

Yes, it's insane. You can use the rental income towards affording a higher priced place, too. For example I make $40k/year and bought a $350k property because the rents from the other units were $1100/month apiece.

The only condition is that it must be owned occupied for 12 months following the purchase. Easy peasy.

Lan Mandragoran

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Re: Best ways to save for real estate
« Reply #7 on: June 14, 2017, 09:08:57 AM »
yeah... that kind of deal is my current goal.  Bah I should just go hard for the multi-fam FHA/live-in route, wife isn't rly a fan of living in a rental next to our tenants again, but it seems like a pretty easy choice to me when you see how much you can get out of it.

Cwadda

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Re: Best ways to save for real estate
« Reply #8 on: June 14, 2017, 10:57:08 AM »
yeah... that kind of deal is my current goal.  Bah I should just go hard for the multi-fam FHA/live-in route, wife isn't rly a fan of living in a rental next to our tenants again, but it seems like a pretty easy choice to me when you see how much you can get out of it.

You only have to move in 60 days after the closing. Also they don't check whether you're actually living there. As long as your address is there and you're not renting out the apartment that would be owner occupied, you'd be fine.

You can also start looking for a new house about 9 months after acquiring the FHA house - by the time you close you can move out of the multi family right away.

Lan Mandragoran

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Re: Best ways to save for real estate
« Reply #9 on: June 14, 2017, 01:44:29 PM »
hmmmm cool. Thanks for the info =].