131

Because you don't have the jobs lined up, it makes more sense to rent for a few months for a couple of reasons: A: You should never deplete your emergency fund of 3 to 6 months for non-emergencies B: Once you land a job, you can make a better judgement as to where to live for the commute. C: Car loans and credit cards are expensive forms of debt that ...


107

EDITED after OP added more details. no taxes have been taken out yet. 24% will probably be withheld, taking you down to 38K. The organization that ran the sweepstakes must withhold 24%. It's the law, and of course you have to claim it on your tax return, whether or not they withhold anything. Because they'll withhold, they'll send you a W-2G saying ...


97

I think this might be an instance of "survivor bias" in that you only tend to hear from the people who were successful at it and made a lot of money off of it. Conversely you don't hear as much from the people who lost their shirt trying to flip a house or those who couldn't secure tenants at a good price. If you're interested in the idea of passive real-...


94

No. Just no. This is a cheesy sales pitch from someone who wants you to take their course on real estate investing for the low low price of $499. It's a non-sequitur: the conclusion does not follow from the premises. Population generally increases: true. More and more real estate will be needed to house them: true, with caveats. And thus you should go ...


72

It's important to differentiate between "living below your means" and being smart about money. Buying a used car with low mileage is generally a smart financial decision considering every car becomes a used car the second you drive it off the lot. Financially, there are only advantages to living below your means. You will save more money which can be ...


70

You did not add a country tag, but in most countries, a plot of land and any buildings built on it become one inseparable unit which usually can not be sold separately. If you sell one, you also have to sell the other. That means if your bank forces you into foreclosure, they will auction the house, the plot of land and the other things you build on and ...


65

There are no rules about how to handle equal offers. A seller is free to accept any offer they want. They don't even have to accept the highest offer if they don't want to. Reasons why a seller might pick one offer over another despite price include date of closing, buyer not having a house to sell, and buyer having cash rather than mortgage. However, ...


62

What is the truth about this? Pretty much no truth. At 48 years old, I received an offer for a job where I was paid far more than any other employment I had previously. I chose it over two other competing job offers that were offered at a very similar time. While I was laid off from that job, rather abruptly, I had a new job within a short time at age ...


57

I can use that property to get a loan for another real estate? Or that's not how loans work? That's not how secured loans generally work. You could get a mortgage on your rental property, but the bank will most likely ask why you are getting a loan (to find out if it is because you are in financial distress). You might as well just buy the second property ...


55

Where is the risk? The short answer is... Property damage from weather, termites, tenants, whatever. How about tenants who stop paying the rent and you need to go through legal channels to evict them? It doesn't cost a fortune but you had better not need that rent to make the mortgage. How about another GFC (Global Financial Crisis) like 2008 when ...


54

Several other good answers that get into the details, but I think there are a few obvious things that need to be said here: Real estate isn't a risk-free golden ticket - investing in real estate involves a lot of risk. It's easy to fail at it, and then you have nothing to fall back on. Having a career with a skilled job isn't as dismal as you've made it out ...


53

First congratulations and well done in both your salary and investment. Hopefully there will be more of this in the future. First I applaud your initial approach. Give some, spend some, save some. The disagreement with your wife is standard. One member of a partnership tends to be more conservative than the other; the disagreements help bring balance into ...


48

To actually answer your (financial) question: What are my options in this situation? Rent out the property share the profit / remaining costs while building equity until you find a buyer. Lower the asking price. You may have to sell it at a loss. Too late to complain now. As they say, you make the money in buying. Looks like you bought too high. Split ...


47

You make $50/hr and are in debt? This is a serious problem! The $50K is a distraction. This is what I'd do: Pay off any high-interest debts (say 7% and above) up to ~$40k (saving some for taxes, ignore if they're already withheld). Stick remainder in a High Yield savings account (e.g. Ally) and forget about it. Discontinue use of credit cards, if you're ...


43

Depending upon the divorce laws in your jurisdiction she could be entitled to 50% of the proceeds of the property sale no matter if she contributes to the payment or not. In some sense she may be doing you a big favor by contributing half. You may want to seek a lawyer's advice on all this because it is so jurisdiction dependent. Typically there are ...


40

the highest offer we could make is substantially below the asking price by around 5%. I wouldn't necessarily call that 'substantial', especially if the property has been on the market some time (I surmise this from "sales in our local area are slow"). That you are ready to proceed also makes you a strong contender, and reduces the window of opportunity for ...


39

The sales pitch: A few decades ago, I had a friend that was starting out in real estate investing. He explained his reasoning like this: Buy a starter home. Get a decent house/condo with the best rates because it is an owner occupied purchase. Live there for 5 years. Buy another house, get some renters lined up for the first place. Renters cover the ...


38

It doesn't feel savvy to offer without Conditions Precedent like Financing Condition, Subject to Appraisal Inspection, Legal Review, Survey. For the average buyer, those typical conditions are very important. But for a team of investors, they are handling many of these internally. The purpose of visiting the house before making the offer is to do an ...


35

The basic premise of what your father is saying is equivalent to: Buy land. They ain't making any more of the stuff. - Will Rogers And probably, if you look at this at the timescale of centuries or millennia, it's probably roughly right ignoring volcanic islands. But There are some complicating factors to this: Not all property grows in value at the ...


35

What you do with your income, and with your windfall, should be based on your retirement goals, which you have not mentioned. For many people, a paid-off residence and $1M in the bank would mean retirement could already start. But it seems your lifestyle (young children, Porche 911, etc.), won't quite allow for that. So you acknowledge that you will be ...


35

Other answers do a good job explaining direct financial disadvantages, so here's another point of view: Living frugally might negatively affect your social life. For example, if your friends like going out for expensive dinners, choosing not to join may damage your relationship. Appearing to be rich, for example by driving a nice car, may increase your ...


34

I know this from Poland. This is a semi-legal poaching technique used by estate agencies. It's semi-legal because the agencies (company) cannot impose a buyer, but an agent (a sole representative) is not forbidden from doing that. This is used to create leads for them they could then show to their clients. It works because buying direct, with cash, makes ...


32

You've really answered your own question, without even needing to go into the financial details. "I just don't like the idea of getting in debt and not being able to move any time soon." If you want to be able to move at short notice, home ownership is not for you. OTOH, if you plan to stay where you are, like gardening, auto mechanics, woodworking, or any ...


31

@Adam Klump gave the advice I would personally follow, but I want to give a third possibility. I'm not from the US, but it seems to me that you don't have to buy the house outright in cash, you still have the possibility to take a loan. You'll still be able to pay it off whenever you want, and may be able to negotiate low interest rate and have the money ...


30

Depends what your father meant when he said "real estate was a good business" and that "real estate prices mainly go up." You could be a real estate agent, a landlord, a commercial property investor, or even the guy with a hardhat and hammer who builds houses. Each of these folks can have radically different outcomes from being in the real estate business. ...


27

The "We Buy Houses for Cash scheme" is targeting desperate and misinformed property owners (like elders and minorities) through pressure purchase tactics to rip them off by taking the low ball offer with cash. In the process, the scheme maker (some are real-estate agents) actually already has a willing buyer, and this allows them to sell the house with ...


25

Anecdote: My grandparents gifted me and my girlfriend £30k so that we could buy our first house together, and I contributed a further £3k towards the deposit for a better mortgage rate. Over the next two years, I paid for the bathroom to be re-done at £7.5k, as well as the windows and doors for £2.5k, so the house went from being worth £210k to £250k... and ...


25

Compound interest is only relevant when you get paid interest and you reinvest it. In cases where you buy, hold and sell, with no income generated during the holding period, there isn’t any income from the investment to reinvest. There’s no interest, and hence no compound interest. The ‘growth’ of home values is just a ‘paper’ (re)valuation. If you paid $...


25

where is the risk? Losing renters Damage done by renters Unexpected maintenance Legal liability Capital losses Other factors that should be included in expenses: Routine maintenance Paying the landlord (essentially a part time job for him) I'm not saying it's a bad investment - and it sounds like he has a decent property for an amazingly cheap price, ...


23

You are overlooking the real cost of automobiles People have a strong tendency to wildly delude themselves about the true, total costs of automobiles. AAA tallies up the total, real ownership cost of a reasonably recent car. It came out to $8,841 last year for a 15,000 mile/year car, with SUVs pulling up the average. You didn't say where you aim to ...


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