Author Topic: Should we "Flip" a house?  (Read 10881 times)

FIreDrill

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Should we "Flip" a house?
« on: February 13, 2014, 10:29:13 AM »
It wouldn't be a true flip because we would plan on living in the place until we move in approx 2-3 years but I have always been interested in flipping houses and it seems like now may be a good time to give it a try.  I've been watching bigger pocket videos and listening to their podcast as well lately and it has sparked my desire to try this out even more and now my wife is starting to come along to the idea.  I've watched my local market for a while and I think it would be hard to get a place for 70% ARV in my area but that's what I would be shooting for.  I think a more realistic number for my area would be 80% ARV but I'm not sure if I want to cut it that close.  Below is a quick view of our current financial standings.


Debts = 0

Assets = 63k (35k accessible for closing and repair)

Monthly Gross Income = 6,800

Monthly Expenses = 2,500 - 3,000


As far as money goes.  We will be freeing up around 10k in the beginning of summer by selling a car and we are currently stashing away about 50% of our income but we could redirect some of that 50% to repairs if needed.  The max purchase price I would be comfortable with would be about 200K.  I've run all the numbers and as long as we get a good enough deal it looks like it would work out great on paper.  Of course, the market could always tank in 2-3 years but any investment has a chance of dropping and I really don't see my local market tanking anytime soon.


So what do you guys think? Good or bad idea? Anything I'm missing?



Thanks!
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Johnny Aloha

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Re: Should we "Flip" a house?
« Reply #1 on: February 13, 2014, 01:48:39 PM »
I think it sounds like a great idea.  It's what we've done and been relatively successful at it.  You are  young, motivated, and in a good financial situation for your age.  Whether you make money or not, you will learn a ton! 

I bought a couple houses before I even knew about the 70% rule and all that stuff.  If I was to go back and do it all over again, I'd network with wholesalers or maybe even do some of my own marketing when looking for a SFH.

Keep us posted.

FIreDrill

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Re: Should we "Flip" a house?
« Reply #2 on: February 14, 2014, 12:20:30 PM »
I talked to my father in law yesterday about flipping houses and got some really good pointers.  He is retired military but they flipped a house on every move so he was able to give me some great advice, especially when it comes to repairs.  My wife are still thinking and praying on if we really should do this but if we decide to go forward we will sit down and agree to a scope of work that we are both willing to tackle.  We will also have to narrow down the areas that we want to look in.  My FIL suggested possibly increasing our budget in order to get a place in a more desirable area,  this should make it easier to sell down the road and I tend to agree with him.  Exciting times ahead. :)

FIreDrill

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Re: Should we "Flip" a house?
« Reply #3 on: February 17, 2014, 10:17:52 AM »
Well, we have decided to go forward and start looking at places.  We also agreed on a scope of work that we both would be willing to tackle and we have our ideal price range picked out.  Contacted our realtor and scheduled an appointment for Thursday to go over the basics of what we are looking for and get the ball rolling.  Now I've got to move some funds around so they are available when needed. 

4alpacas

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Re: Should we "Flip" a house?
« Reply #4 on: February 18, 2014, 01:14:59 PM »
Assets = 63k (35k accessible for closing and repair)


Do you have enough for a 20% down payment?  I would try to avoid PMI. 

FIreDrill

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Re: Should we "Flip" a house?
« Reply #5 on: February 18, 2014, 02:33:55 PM »
Assets = 63k (35k accessible for closing and repair)


Do you have enough for a 20% down payment?  I would try to avoid PMI.

We could get together 20% for a down payment but that would eat up most of the money that we would use for repairs.  I need to look into seeing if we can get the PMI dropped after repairs or even if a refi after repairs would be possible to drop the PMI.  If neither of these options are possible the worst case scenario is we would pay approx 2,160 over a two year period for PMI (90 per month).  The way I see it, the money is much more valuable if we use it for repairs rather than saving 90 bucks a month in PMI. 

4alpacas

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Re: Should we "Flip" a house?
« Reply #6 on: February 18, 2014, 04:43:54 PM »
Assets = 63k (35k accessible for closing and repair)


Do you have enough for a 20% down payment?  I would try to avoid PMI.

We could get together 20% for a down payment but that would eat up most of the money that we would use for repairs.  I need to look into seeing if we can get the PMI dropped after repairs or even if a refi after repairs would be possible to drop the PMI.  If neither of these options are possible the worst case scenario is we would pay approx 2,160 over a two year period for PMI (90 per month).  The way I see it, the money is much more valuable if we use it for repairs rather than saving 90 bucks a month in PMI.
I don't know what area you're in (and therefore know nothing about the market), but I can't help but wonder.  What happens if the market falls out?  Rent falls?  Home prices fall?  Do you still think it would be worth it?

FIreDrill

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Re: Should we "Flip" a house?
« Reply #7 on: February 18, 2014, 05:05:14 PM »
Assets = 63k (35k accessible for closing and repair)


Do you have enough for a 20% down payment?  I would try to avoid PMI.

We could get together 20% for a down payment but that would eat up most of the money that we would use for repairs.  I need to look into seeing if we can get the PMI dropped after repairs or even if a refi after repairs would be possible to drop the PMI.  If neither of these options are possible the worst case scenario is we would pay approx 2,160 over a two year period for PMI (90 per month).  The way I see it, the money is much more valuable if we use it for repairs rather than saving 90 bucks a month in PMI.
I don't know what area you're in (and therefore know nothing about the market), but I can't help but wonder.  What happens if the market falls out?  Rent falls?  Home prices fall?  Do you still think it would be worth it?

Honestly, yes I think it would still be worth it.  There are no immediate threats to my local market that I can see but a market crash is totally possible.  If I was going to let the possibility of a market crash keep me from investing then I wouldn't even invest in the stock market.  I'm not going to let the "possibility" of something happening prevent me from trying something that I'm interested in.  That would essentially be letting my own fear take control of my life and prevent me from doing something I want to do.  What I am not going to do is go into this blindly without knowing anything about it or make a deal where the margins are too close for comfort.  We are also planning an exit strategy if we are not able to sell and currently that exit strategy would be to rent it out so we are taking into account those numbers on possible deals as well.  Again, it is totally possible that the market drops out and even that strategy could be threatened but it is also very unlikely that rent would be affected that greatly in my area.

You seem to give off the impression that this is a bad idea.  Any specific reason why?



Thanks for the discussion :)
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4alpacas

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Re: Should we "Flip" a house?
« Reply #8 on: February 18, 2014, 07:16:29 PM »
Maybe I watched too many house flipping shows on HGTV.  I've never done a flip. I was just pushing the question because I was interested. I don't have an opinion, but I enjoy a good thought experiment.

FIreDrill

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Re: Should we "Flip" a house?
« Reply #9 on: February 18, 2014, 07:40:39 PM »
Thanks for asking, it helps me re-think different situations as well.  :)

greenmimama

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Re: Should we "Flip" a house?
« Reply #10 on: February 25, 2014, 11:57:26 AM »
This is what we are currently doing, we call it a slow flip, we live here and are finishing up the basement, but when we bought it, it had been completely stripped, and we re did everything, it's a high end home in this area and we hope to sell it this summer, and then put our equity into some more real estate.

When we bought it we had to get a construction loan to make it livable, we didn't end up using it all, we cash flowed as much as possible, but we put quite a bit into it, but fearing the unthinkable, it will have been a great investment, fingers crossed, prayers offered. It's hard when it's everything you have, well not really but a huge chunk of it anyways :)

So let us know how it goes!


FIreDrill

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Re: Should we "Flip" a house?
« Reply #11 on: March 01, 2014, 08:17:59 PM »
Greenmimama:  Thanks for sharing your experience!


Just posting a little update.  We have looked at about 5 places now and are interested in 1 of them.  It's in the higher end of our price range but is in an amazing neighborhood and has great schools.  Looking at previous sales in the neighborhood they usually get asking price or higher and sell fast.  It needs a bit of work and after crunching numbers I would expect to drop 40k into it over the next two years.  We are pre-approved through conventional financing but since we are looking at mostly HUD homes we will need to go through the pre-approval process again with an HUD lender.  ARV value on the home would be 330-350k and we would want to get it for around 200k.  I'm not very confident that we will get it but hey, at least we actually are on the same page with this place.  Either way we will need to get per-approval done for offers on future HUD homes.  We ended up getting a nice tax refund so that will add to our pot of cash for the down payment and repairs.  Also sold off our Roth IRA investments so those are now available to transfer out of the Roth accounts for whenever we purchase a place.  Overall, everything has been going good and we are really excited about the whole process, :).


Blindsquirrel

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Re: Should we "Flip" a house?
« Reply #12 on: March 02, 2014, 10:00:40 AM »
    Sounds like you should pounce if the work is doable and the ARV will be where you need it to be.  I would not stretch yourself too much and having another person (home inspector? General contractor?) look at it before you make a huge investment is probably not a bad idea. I have done 20 or so deals and always have a competent fellow look at the house.  Your first real estate investment is exciting. A couple of my first RE investments were total dogs, some of my later ones have been so good it is nuts. Good luck!

greenmimama

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Re: Should we "Flip" a house?
« Reply #13 on: March 02, 2014, 10:46:03 AM »
I'm sure you have heard this before, but you will probably spend more than your budget, so have a plan on where you will get the money. Keep us posted.

FIreDrill

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Re: Should we "Flip" a house?
« Reply #14 on: March 02, 2014, 03:41:44 PM »
Blindsquirrel: 

We are planning on making the offer contingent on several factors like Home Inspection and Financing although I don't think financing will be an issue, we just have not gone through the HUD loan pre-approval process yet but are planning to this next week.  Making it contingent on home inspection is really just a safety net to where if we find out it needs major work like foundation repair then we can bail out. 

Greenmimama:

Our current repair financing plan is to use savings and cash flow as much repairs as possible.  After closing we would have close to 20k as of now for repairs but that will jump up to 30-40k in the next several months assuming I sell my Mustang early summer and we continue to have a nice chunk of excess funds every month.  Right now the back up for repairs is to get the home into decent shape and then if we run out of funds to look at taking out a HELOC.  If we got this place at our 70%ARV-Repair evaluation and everything went according to our estimates our profit on the sale in a couple years would be over 50K including the increased COL and Sales Commissions.  In my mind 50K is a good amount of padding and I'm currently trying to overestimate repair costs and other costs that could cut our profit margin.  Feeling pretty good about everything so far, I think the hard part will be getting the right place for the right price. 

Blindsquirrel

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Re: Should we "Flip" a house?
« Reply #15 on: March 02, 2014, 05:27:17 PM »
    Good deal, keep after your goals and you will meet them.

FIreDrill

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Re: Should we "Flip" a house?
« Reply #16 on: March 09, 2014, 05:15:00 PM »
Over this last week I was able to get pre-approval from a HUD lender and went over the loan details with a fine comb... I'm actually really liking HUD home loans... 5% down with about 4.9%apr on a 30 year, but the best part is no PMI!  After getting pre-approval we talked with our realtor and decided to come in with an offer of 185k which is wayyyyy below current asking price.  The place has only been on the market for 30 days so It hasn't seen any price drops yet.  We should here back from the bank by Tuesday so it will be interesting to see what they come back with.  Current asking is 299k (way to high IMO),  I'm predicting they come back at 250-260k.  Excited to see how this plays out!

erutio

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Re: Should we "Flip" a house?
« Reply #17 on: March 10, 2014, 02:40:00 PM »
Wow that is quite a spread in offer price and asking price.  Thanks for the update, let us know how it goes!

FIreDrill

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Re: Should we "Flip" a house?
« Reply #18 on: March 10, 2014, 02:46:55 PM »
Wow that is quite a spread in offer price and asking price.  Thanks for the update, let us know how it goes!

Haha, yes it is.  I believe they are asking way too much in the first place given its current condition but we both like the place so why not go after it even if that means a ridiculous low ball offer.  Our realtor suggested to start at 185 and the way I look at it we would never know what would happen unless we made the offer.  After all, the money is made on the buy right? ;)  All of that being said, I still felt a little weird coming in soooo low compared to asking...

FIreDrill

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Re: Should we "Flip" a house?
« Reply #19 on: March 12, 2014, 01:36:21 AM »
So we heard back from the bank today and they countered at full asking price, haha. Guess we will be looking at different places, :p.  So this is how our first offer turned out.

Days on market = 32
Offer = 62% of list price (so low even I felt a little weird making it)
Previous offers on home = 0 (found this out from my realtor)
Counter offer = 100% of list price. (Really???)


So obviously there was no way that we could of worked out a deal on this property at this point in time.  We have a couple houses that we are going to go see and we will continue to watch to see what kind of price drops happen on this house in the future.  Our first offer didn't go like I would of liked it to, but hey I guess it's a learning experience right?  Also, I believe the counter offer would of been pretty different if this property had been on the market for 90+ days.  I guess we will see what happens down the road.

Guizmo

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Re: Should we "Flip" a house?
« Reply #20 on: March 12, 2014, 09:32:42 AM »
StudentStacher:

I don't know how the market is doing where you are looking at, but my brother and I were looking at doing a flip and it has been insane. He is a builder and real estate agent and I manage properties as well. Houses here have several offers within days. We had a cash offer on a house that was literally just framing, brick, sheet rock and roof. No electrical, plumbing, kitchen, etc. we were approximately 20% below asking and they still decided to wait out for someone to meet their asking price.

I say all this because your market is anything like ours, you will have a hard time finding a property. So my advice is to not be disappointed if you have several rejected offers. It might take a full offer on a short sale to get a good property.

FIreDrill

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Re: Should we "Flip" a house?
« Reply #21 on: March 13, 2014, 04:39:24 PM »
Thanks for the advice Guizmo.  How the first offer went down was a little disappointing.  I found it funny that they countered at full price and then dropped the asking price by 10k just two days later, lol.  We are looking at another place today that is in a totally different price range, asking is 173k and its an as is HUD home eligible for 203k financing.  I'm interested to see what kind of condition it's in cause current comps go for for around 220k.  Also need to do some research on the specifics of 203k loans.

golfer44

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Re: Should we "Flip" a house?
« Reply #22 on: March 13, 2014, 04:49:12 PM »
Be sure you have multiple exit strategies. It's not as crucial because this isn't a traditional flip, but it is something to keep in mind.

If you can't sell it in your 2-3 years, will you feel comfortable A) holding onto it and renting it out, B) staying there, C) ???

FIreDrill

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Re: Should we "Flip" a house?
« Reply #23 on: March 13, 2014, 05:09:53 PM »
Be sure you have multiple exit strategies. It's not as crucial because this isn't a traditional flip, but it is something to keep in mind.

If you can't sell it in your 2-3 years, will you feel comfortable A) holding onto it and renting it out, B) staying there, C) ???

Definitely, I have gone over the numbers, and while it wouldn't be an ideal rental investment, we would be able to use it as a rental for an exit strategy and it would be at positive cash flow.  I also wouldn't mind staying a little longer because I love my job but the 2-3 year time frame is really the soonest we would move away IF we did end up moving away.  Currently school is keeping me locked into this location at the moment.  Can't really complain about a free college degree, :).

waltworks

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Re: Should we "Flip" a house?
« Reply #24 on: March 13, 2014, 06:42:30 PM »
Honestly, if you are dealing with a bank, you are NEVER going to get a lowball ($185k on $300k asking?!?) to work, basically. They can keep the house on their books and not realize the loss for a looong time - and yes, it's basically irrational, but that's the reality. They won't take super lowball offers, especially now that a lot of those foreclosures are actually appreciating. I'll add a caveat, I guess - maybe you are operating in some market I'm not aware of where this will work.

If your realtor is giving you advice to try this, you need a new realtor. It's not entirely true that there's nothing to lose by asking - you are putting in time and effort and then making an offer that isn't realistically going to be accepted. You are also wasting other people's time, not just your own. If you keep doing that, you will just keep spinning your wheels indefinitely.

-W

Thegoblinchief

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Re: Should we "Flip" a house?
« Reply #25 on: March 16, 2014, 07:41:49 AM »
And sometimes banks will be smug asshats and counter ABOVE their asking price just because they can :P

Y'all live in weirdo land compared to my area. Where I live is still super depressed compared to the peak in 07. Most houses are still down 30-40% and sit on the market forever.

FIreDrill

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Re: Should we "Flip" a house?
« Reply #26 on: March 16, 2014, 11:11:35 AM »
Haha yeah the market where I'm at actuallly never dropped in the 09 crash which was interesting.  We are considering looking at this from a long term renter prospective as well now so we are also trying to find single family homes in good neighborhoods that would meet the 50% rule.  This may be a more obtainable goal for the market we are in since rent can be pretty high here. My wife use to work for a residential property management company so we have a good idea of what a rental will take.  We looked at a fixer the other day and it would of taken too much work that we wouldn't be comfortable with ( Foundation stuff).  Today we are going to look at a place that would make a great rental and appears to be in great condition so it's pretty much the total opposite od what we have been looking at. haha

FIreDrill

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Re: Should we "Flip" a house?
« Reply #27 on: March 18, 2014, 10:14:02 AM »
Just a little update if anyone is interested.  It looks like we are leaning more towards buying less of a fixer upper and going more for a good future rental unit.  We looked at a 3 bed, 1.5 bath, 1 car garage ranch the other day that has been recently renovated and we are considering making an offer on it.  It would rent out for about 1850-1900 per month in the current market and with the financing I will be getting that will put it within the 50% rule (if the loan amount was for 100% of the purchase price).  It's a really nice little place although I was looking forward to doing some sort of work myself.  It is also listed at the top end for comps in our market.  I could really care less about the cosmetic updates that have been done but what really sells if for me is that the roof, furnace, and hot water heater are all fairly new.  I would assume this would lower our maintenance costs when we do rent it out sense we will most likely not have and big ticket items to replace for a while.  Also, this location is ideal for rentals and they usually don't last very long before being rented out.  We are going to try to go look at it again today and from there we may make an offer.  It's kinda funny, we would be going from a 1 bed 500 sqft condo at 1000 a month to a house at 1200 a month, lol.

waltworks

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Re: Should we "Flip" a house?
« Reply #28 on: March 18, 2014, 12:26:00 PM »
Wow, you're in a market that never crashed and there are houses that will make the 50% rule with 100% financing? Where is this, if you don't mind me asking?

-W

FIreDrill

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Re: Should we "Flip" a house?
« Reply #29 on: March 18, 2014, 12:59:35 PM »
Wow, you're in a market that never crashed and there are houses that will make the 50% rule with 100% financing? Where is this, if you don't mind me asking?

-W

Haha, no problem.  We live in Alaska, county of Anchorage.  Didn't see a lot of down turn through the 09 crash, not even that many foreclosures, and the majority of renters where I would buy are going to be Military families who get an extra rent allowance every month for living off base.  This area also has a lot of oil workers that commute to the slope and back to anchorage for 3 week on 3 week off work.  New constructions is usually priced high and there are not a lot of single family places on the market in our price range, most of them are Attached zero lot lines.  Our market could be effected greatly in either way by what happens with oil production or military moves/downsizing (oil production would prob have a greater affect than military).  Right now we are in a total sellers market and the as the population has increased over the years builders have not been able to keep up with demand.

FIreDrill

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Re: Should we "Flip" a house?
« Reply #30 on: March 18, 2014, 01:09:16 PM »
Correction... It would come in right at or a little above the 50% rule with 100% financing.... After our down payment, it would easily clear the 50% rule.

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FIreDrill

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Re: Should we "Flip" a house?
« Reply #31 on: March 20, 2014, 11:08:19 AM »
Well after negotiating a little bit we ended up getting an accepted offer at listing price with the sellers paying 6k of our closing costs.  The goal was to get the seller to cover our closing costs so we could have that extra 6k to go towards meeting the 20% down mark but it looks like we will be just short of that mark still.  PMI will cost us about 67 bucks a month and we plan on paying down the principal enough after 6 months to drop it all together.  I've been looking at different loan structures and while I never thought I would got with any type of ARM loan I ran the 5 year payment scenarios on a 5/1 ARM versus a 30 year and the 5/1 ARM would save us about 12k between the lower payment and the extra principal payoff over the initial 5 year fixed period.  During this time would would be making extra payments and try to pay down a good chunk of the loan with the goal of refinancing in 5 years.  If the market stays flat we will have a minimum of 30% equity after the 5 year fixed period, most likely 40-50% with the amount of extra payments we want to make.  In this case I don't see any issues with going for the 5/1 ARM and rolling the savings into principal payoff with the goal of refinancing in 5 years.  Also, after the fixed rate period the arm is based off of the market index plus 2.25%, it can not adjust more than 2% in one year and can not adjust more than 5% over the life of the loan.  We are not expecting to have to worry about this but it is good to know.

I know if the market crashed our plan to refinance could be in danger but even taking that into consideration it still seems pretty solid to me.

What do you all think?

waltworks

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Re: Should we "Flip" a house?
« Reply #32 on: March 20, 2014, 12:01:34 PM »
The ARM only makes sense if you either expect interest rates to stay crazy low *forever* or you plan to sell within 5 years. I thought this was a flip? Or is it an occupy-then-sell-someday now?

-W

FIreDrill

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Re: Should we "Flip" a house?
« Reply #33 on: March 20, 2014, 12:14:38 PM »
It was originally a discussion of if we should flip a house.  After looking at all the variables involved it seems buy, live, and eventually rent would be a good way to go for our market and our current financial position.  We would live in this house as long as we are in this state and then look to rent it out if we moved out of state or if we ended up living her long term and wanted a larger place, but that would be wayyy down the road.  Could you expand on why an ARM only makes sense if market interest rates stay low?

Edit:  It would seem to me that the only reason to do an ARM is if you will be doing an accelerated payoff,  if you are planning on refinancing after the initial 5 year term, or if you are selling selling at 5 years.  We would be refinancing...  IDK, maybe I'm missing something huge here...  Also,  I know interest rates are going to fluctuate so the ONLY guarantee between the 5/1 ARM and the 30 year is that we would save 12k in the first 5 years with the 5/1 ARM.  Unfortunately I do not have a crystal ball to see what rates will be like in the future,  but those first 5 years would be set in stone.
« Last Edit: March 20, 2014, 12:51:09 PM by StudentStacher »

waltworks

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Re: Should we "Flip" a house?
« Reply #34 on: March 20, 2014, 01:05:40 PM »
Essentially an ARM is a self-refinancing loan. So if rates go up, you pay the higher rate. Rates go down (not really possible at this point) you pay the lower rate. If you refinance, you will just end up at around the same rate you would be getting with the ARM at that particular time (probably like LIBOR +2 or something like that).

Obviously you can lock that rate in (whatever it is) but you'll pay a bunch of closing costs on the loan and it's a hassle, so in the end if you're going to be there a while and then rent it (with no set plans to sell at any particular time), the ARM doesn't make a whole lot of sense IMO.

If you aren't already aware, the 30 year fixed rate loan is a pretty unique product in the world of finance. It is something that a private investor would NEVER offer you, so for all practical purposes it's free government money (whether that's a good thing overall is of course open to debate). Especially now with rates ridonkulously low.

In a nutshell, ARMs are for people with lots of cash who don't want to tie up their money in a house, plus suckers who want a lower up front monthly payment and don't have a plan for when the rate adjusts down the road. It does not sound like you fit in the former category and you don't want to be in the latter.

-Walt

It was originally a discussion of if we should flip a house.  After looking at all the variables involved it seems buy, live, and eventually rent would be a good way to go for our market and our current financial position.  We would live in this house as long as we are in this state and then look to rent it out if we moved out of state or if we ended up living her long term and wanted a larger place, but that would be wayyy down the road.  Could you expand on why an ARM only makes sense if market interest rates stay low?

Edit:  It would seem to me that the only reason to do an ARM is if you will be doing an accelerated payoff,  if you are planning on refinancing after the initial 5 year term, or if you are selling selling at 5 years.  We would be refinancing...  IDK, maybe I'm missing something huge here...  Also,  I know interest rates are going to fluctuate so the ONLY guarantee between the 5/1 ARM and the 30 year is that we would save 12k in the first 5 years with the 5/1 ARM.  Unfortunately I do not have a crystal ball to see what rates will be like in the future,  but those first 5 years would be set in stone.

SDREMNGR

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Re: Should we "Flip" a house?
« Reply #35 on: March 26, 2014, 10:24:02 PM »
Get the 15 or 30 and hold on to it.  It's less brain damage to lock in the low rate and let it appreciate over 30 years.  After you are 40 or 50 or 60 or whenever you want to start selling off, you can take advantage of the 2 out of 5 year rule and live in and sell off your homes, tax free.

Too many people look at the near term return rates and don't think enough long term.  The 5/1 may seem good now but it's a crappy loan when markets turn south.  I suspect you pay for car insurance and you would pay for house insurance?   Think of the 30 year fixed loan as a interest rate insurance.   Sure you pay for it, but ask all the people who lost their homes if they'd rather have gotten the 30 vs the adjustable loans they got and then couldn't refi.

I know MMM himself is all about paying off and living in a modest home, but if you don't have to sell, don't.  The beauty of the SFR investment vs the commercial or industrial or apartments is that you can get all or most of your appreciation back out tax free.  Even with 1031 exchanges (said 1099 initially... taxes on brain), the other types of real estate and even tax sheltered retirement accounts have to pay long term gain taxes.  Not so with SFR.  Someone let me know if I'm totally misunderstanding the IRS rule on sheltering $250k/$500k on sale of primary home.
« Last Edit: March 27, 2014, 03:11:55 AM by SDREMNGR »