Smith-02

the mortgage improves credit, but when you lose 100k+ on interest..

Dr.Boost

Uh, ok? I guess I missed the part where you proved it's not a good debt? I missed your first edit.


Right, but that $80k house that ended up costing you closer to $200k is worth a shitload more in 30 years. That house/land isn't going to drop in value unless something crazy happens.

If there is any debt that can be considered good, it has to be real estate debt. It's an appreciating asset. A car loses value. Land gains value. Making .5% interest a month on $500 isn't going to get you anywhere. :1
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jinxy

Ok, so you spend 200k on an 80k dollar house to have an asset that's going to hold it's value against the currency when the currency inflates. Your point is? That's not actually accumulating wealth. It's keeping half of the money that you spent on the house at it's actual value. Just because the number goes up doesn't mean you're really making any more money unless the housing market has a huge shift. It doesn't happen often and you actually have the ability of going in the opposite direction and losing money on it.

There are other things you can buy and other ways to make money, even if you're taking out a loan for the capital. Even if you want to keep it simple and just buy a piece of property It would be far better to buy a decently sized piece of land under a corporate entity. Take out corporate loans to purchase the property, build 2 duplexes or condos on it and consider yourself an employee and collect a living wage off of it while the land pays for it's self and you're the 100% share holder. There's thousands of ways to do it where you're not going to lose a substantial amount of money on your initial investment, it's just going to take some thinking on your part.







buying a house is not "good debt" :P

Dr.Boost

Ummm....wouldn't that be considered "real estate"? So you're telling me not to buy a house and a house isn't a good investment, but now you're telling me to buy land and build condos?


You have no idea what you're talking about. Do you really think that if you bought a house for $80k today, it's not going to be worth AT LEAST 4x that by the time it's paid off? You can factor in inflation all you want. You must live in a shitty area where real estate doesn't boom like it does here. In a matter of about 5 years the value of land and houses more than doubled, maybe even tripled. I could have bought a house for $75k, made the payment on it for 5 years, so let's say $600x60 months=$36000 in payments that I had to pay for some sort of housing anyways. I could have sold that same house for closer to $236k 5 years later which means I made my $36k back in housing payments AND I PROFITED $200 THOUSAND DOLLARS. Yeah, that would be a shitty investment. I'm so glad I didn't make that mistake. :1

For the guy that doesn't have a big chunk of money to make other investments, a house is a GREAT idea. You don't need a bunch of money to buy a house and you have to make that payment one way or another. Your credit also gets better. Bah, whatever. It's a crappy idea. I'm just going to rent houses my entire life so I can retire early. :1
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jinxy

Yes, because you're going to pull in capital on your tenets and since you're operating under the guise of a corporate entity, if the venture was to turn sour you don't owe ---- and still keep the wage you're paying yourself.


In actual cash value contrasted to todays currency and the average working wage of a US citizen? No, I don't think the house is going to be worth anywhere near 4x's as much unless you live in a market that has an unexpected housing boom from a new industry/attraction/what have you. All of which will eventually fall back to fair market value or below when the boom is over. Most people do not have the ability to predict the market in such a way as to profit off housing. Please read my post in it's entirety before you digress on irrelevant points. I already covered that in another post. There are safer ways to make money, no debt where you owe a substantial amount of interest is "good debt", although admittedly better than car loans and there are multiple other ways to do what you want to do and make way better on it than buying a singular piece of property.


For example, right now gold is trading at 840 dollars an ounce in US currency, in the year 2000 gold was worth about 300 dollars a troy ounce in USD. Do you really think an ounce of gold in 2000 is worth more than an ounce of gold in 2008? It's still an ounce of gold. So what happened to it's value? Nothing. It's just worth more now against the united states currency due to inflation. It's just about the same deal with the housing market, except housing is not as safe as a bet.

Dr.Boost

So what real world experience do you have that gives you this knowledge? Have you ever made ANY type of investments? A mortgage? Any loans? Anything?

I'm buying a house to avoid paying someone elses mortgage. You can't argue that doing that is a bad idea.

Mortgage>rent

In the long run, in the short run, however you look at it.

These huge investments you're talking about aren't even close to being realistic unless you have a huge amount of cash, equity or a money man that's going to back you. A bank isn't going to give you a ~$1,000,000 loan to buy land, build a condo and sit on it when you have no money and you don't make ----. Let's be real and not talk about ---- that won't happen. I'm talking about buying a ------- house with -0- down and making a ~$1200 payment.
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jinxy

Yes paying a mortgage is better than paying someone else's mortgage through rent. Being the person who's being paid the mortgage by tenets and having them pay for your investment is also better than paying a mortgage by yourself.

I have offers for revolving lines of credit from my little shitty ad-hoc corporation that would make you cream your pants and have called and confirmed their approval. 1-2 million guaranteed, on the spot. Loans for c-corps or s-coprs are not like little mis jane or joe walking down to the local bank and asking for a mortgage for a house based off of your income. It is a completely different situation. If you can prove that it's a viable idea and you will profit off of it, there are people willing to hand you money to do so as long as you pay them their interest. If you ---- up, you owe nothing, the bank takes the property and it's completely detached from your personal living situation.

Dr.Boost

lol, bullshit. They don't give 1-2 million dollar loans to people who make less than $20k a year. :1 If you can't make the payments on the loan, THEY DON'T GIVE YOU A LOAN. What bank/investor is going to loan you $1,000,000 with a monthly payment of....oh let's just say $5000 when you don't even make that??

There isn't a bank in America that will loan you 1-2million so quit dreaming.
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jinxy

Last time I checked you don't pay back corporate business loans with money you make from your personal source of income

Dr.Boost

And you own some sort of big corporation that banks are just dieing to loan millions of dollars?

I thought you were a waiter at a burger joint?

So if people are throwing millions of dollars at you all day long, where are all of your super smart investments? What do you own? What kind of profits are you making?
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