I have lived within my means my entire life and am very careful with my financial decisions. I found this line:
Your plan is reckless, and it is not uncommon. Frankly, this line of thinking and decision making is why we are in this crisis.
Extremely insulting.
Not meant to be at all my friend. I really tried my best to convey that in my response, while at the same time trying to give you some cause for hesitation.
And not to get into it bc you have the right to be insulted, but I think most would agree, and it appears as though many already have, that this is reckless.
So here goes: 300k on you and your wife's income is reckless. I think even you agree bc you have got creative and are looking at a possible "partnership" to work around the bank essentially
telling you this would be reckless by not approving you. So, first I think it's important to look at your motivations here. You mention we're at the bottom, you mention a 10 year horizon for your investment in the home, you mention a partnership...
These comments and ideas sound like you look at this home as an investment, almost a business, as so many people have. And they got burned. In investments I strongly recommend that we put little faith in our ability to time markets. If we could predict markets with accuracy everybody would have bailed out of the market in the fall and bought back into the market at it's bottom on March 9th, rest in peace BIG
Your home is your home. Over the long run you will benefit from from leverage and equity which will build significant wealth. Leverage is using other people's money to invest, and the avg Americans best chance at using large amounts of leverage to their advantage is in home ownership. If you are looking for a partnership, I think your looking for trouble. Unless this is Big Love and the person is part of your big happy family I think you are introducing risk, to your relationship AND your investment.
If you knew the market had another 15% to drop would you be rushing to find a partner? That would mean the house you like today for 300k could be yours in a couple of months to a year for just 255K!! think about that.
I think you are highly motivated by your opinion that there is money to be made bc we have hit bottom. there is nothing wrong with taking market timing into consideration, but it shouldn't cause you to make decisions that are dominated by it.
How about this angle Jsaad. Do you want your wife's roof dependent upon a partner? Assuming you have someone who is willing to dump money into this home for 10 YEARS waiting for a return on their investment, your LIFE is in the hands of someone else. They don't have as much riding on this as you, that leaves you in a dangerous situation. What if they lose their job, or just get sick of throwing money away until 2020!! Think about that, they are going to pay for your American Dream until the year 2019 - 2020!
What if the Nut from the Granite State has it all wrong and you are correct? What if we HAVE hit bottom, and the market spikes 30% in 2 years. You just finished putting on a new deck, you still have some boxes in the garage you haven't even UNPACKED yet... and the "partner" wants to sell and collect his check. Now you have to look to uproot your fam and buy a new home, in an inflated market mind you. You too will be paying 30% more for your next house, there goes a good chunk if not all of your earnings.
There are so many possibilites of this going sour. Partner with someone on investment property. Set up an LLC, find a porperty that will turn a positive cash flow, then you invest with a partner. But I urge you to think about what it would be like to have someone making decisions that affect your life with nothing but profit on their mind.
Dangerous at worst,
really unpleasent and very stressful at best.
Topic: What would you do? (Real Estate Question) (Read 32589 times)