Real estate discussion

Prob half of homeowners are in that same boat. It’s going to create a lot of new landlords too when they realize they can hold their 2-3% rate and make double their mortgage payments on rent. This will lead to even less inventory sadly. I rarely recommend people become landlords with just one house but when you’re making double your mortgage payment it’s hard to lose in that situation if you screen very well for tenants.

I’ve posted this website before and it’s only in certain markets. But you can search properties with Assumable loans here. Great deal it seems to save 2-3% on the balance of the mortgage. You have to take a loan out for the down payment or pay cash.

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I’ve thought about that as well, but like you said, you’d really have to screen VERY well for tenants. Our current home is too high end to be rented IMO, unless we landed the ideal tenants. Its not the greatest thing since sliced bread, but the risk & cost of replacement would be too great… I mean some of the materials alone wouldn’t make sense for most rentals (in our area anyway). Custom cabinetry, higher grade granite, solid wood floors, quality interiors doors & casework, nice appliances, etc. Even with a significant deposit that would do absolutely nothing.

That is a common issue as well… these home are always at top dollar and we would immediately do some sort of renovation. So where is the value in that? :hot_face:

That used to be the case but in today’s world a lot of high earners are renting. They don’t see the value in being tied down to one location. Rather invest the 1-2 million elsewhere besides the inflated real estate market. Simple interest alone on 2 million would pay rent for most areas on a very nice home.

And as for damages, if they’re high earners and have good credit you can litigate for more then the security deposit if they damage things. It’s not ideal but I’d rather sue someone making 500k a year with an 800 credit score than a bum tenant. The odds of collecting the judgement are exponentially higher.

On the flip side, those $500k tenants can also afford great lawyers… Even worse if the tenant is a great lawyer :slight_smile:

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I hear ya and that works if you’re in the right market. You’re too accustomed to the Miami area and what life is like there. :smile:

Our area we are in the upper tier of earners and the higher end real estate is more of the exception and not the norm. The market for higher end rentals is small here…

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I wouldn’t rent to an attorney :rofl:

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Fran Healy Meme GIF by Travis

Bay Area prices dropped when there were tech layoffs over a year ago, increased with NVIDIA stock, and only recently pulled back a little.

Would you be able to rent these places out with an assumed mortgage? The mortgages probably have covenants against it?

I’ve never seen a mortgage that doesn’t allow you to rent. Owner occupied mortgages you can rent after 12 months

So if you assume one of these mortgages, do you then have to live in it for 12 month before you can rent it out? I understand each mortgage is going to be different, but maybe there’s some kind of industry-wide standard here.

If you assume a mortgage means it’s 1 of 2 types, FHA or VA. Always, always read the full contract before signing anything and consult with a lawyer if unsure.

  1. FHA mortgage. You have to move in within 60 days and then live in there for 1 year as your primary residence before being able to rent it out. After 1 year, you can rent it out
  2. VA. You have to live in the house for a majority of the year, so not really feasible to rent. However, with VA you can assume a 1-4 unit property, so if you assume a duplex, you can live in 1 and rent the other out.

Source: I’m a real estate agent & hud.gov.

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So a va mortgage only allows you to rent if it’s a multifam? Interesting I thought they had the same 1 year rule most owner occupied mortgages do.

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VA loans can differ in requirements, that’s why it’s important to read the contract first so a person will know. I haven’t dealt with a VA assumption yet, they are extremely rare where I live.

But who is “you” referring to? The original mortgagor or the assuming mortgagor or both or either?

“you” is the person assuming the loan. That clause is in there to try and stop people buying FHA loans as investment properties to just rent them out, since FHA is by its original design supposed to help people with less means get loans/homes.

Home prices in SoCal still crazy and now that spring is on the way, seems like the direction is up not down. Available inventory is still low and everyone with cheap mortgages are not selling.

Probably worse in Silicon Valley.

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SoCal: Neighbor just sold their house which is similar to mine. I bought mine last year. A 9.4% increase in price in about 15 months. The interest rates are similar to what they were last year. I can’t imagine how the market would behave once/if the interest rates go down.
Mine is a smaller home so it sells easier. I noticed that all the bigger and more expensive houses in the neighborhood are just not selling.

And just like that, homes flying off the shelf in my suburb within a day or two again. That lull was short lived here.