View Full Version : Long Term, Interest Only Mortgages?
I heard of a guy who got an interest only mortgage on his house where the rate is ficed for x number of years, then variable, but it is long term (20 years, I think) interest only payments. His rationale is that by the time the 20 years is up (or anytime before), he's going to sell the house and is perfectly happy with reaping just the appreciation without having built up any direct equity. Obviously, these things are designed to get people who can't afford shit into a property with lower payments, and then a lot of times the people get screwed because they hit hard times or can't handle the variables in the rate, but if you have the money to refinance with money down any time and want to buy a property as an investment and rent it out to pay the mortgage as it appreciates, what's wrong with this type of arrangement?
vpkozel
06-21-06, 11:16 AM
Nothing. It's what I have, but I pay extra every month to build up equity faster than I would with a "normal" loan. But the flexibility to not have to pay it is nice.
I heard of a guy who got an interest only mortgage on his house where the rate is ficed for x number of years, then variable, but it is long term (20 years, I think) interest only payments. His rationale is that by the time the 20 years is up (or anytime before), he's going to sell the house and is perfectly happy with reaping just the appreciation without having built up any direct equity. Obviously, these things are designed to get people who can't afford shit into a property with lower payments, and then a lot of times the people get screwed because they hit hard times or can't handle the variables in the rate, but if you have the money to refinance with money down any time and want to buy a property as an investment and rent it out to pay the mortgage as it appreciates, what's wrong with this type of arrangement?
they are designed for property flipping.....you find a property in a growing area and purchase with interest only payments...cause the first 5 years aint nothing but interest anyways....the area grows you sell and walk away.....basically you get to hold use the equity money you would be paying for the time you own the house....say your payment was $2K a month.....interest only payments are around $1600 a month.....that makes sense to me....
long term it really don't make much sense.....
they are designed for property flipping.....you find a property in a growing area and purchase with interest only payments...cause the first 5 years aint nothing but interest anyways....the area grows you sell and walk away.....basically you get to hold use the equity money you would be paying for the time you own the house....say your payment was $2K a month.....interest only payments are around $1600 a month.....that makes sense to me....
long term it really don't make much sense.....
It sounds like as long as you don't plan on retiring there, long term is just as good as short, except if the rate becomes variable,.
It sounds like as long as you don't plan on retiring there, long term is just as good as short, except if the rate becomes variable,.
I so disagree......long term interest only means you own nothing.....you are paying almost what the mortgage would be on a 30 year fixed...saving 1/4 of the payment and getting NOTHING in return...once the 5 years is up the payments toward princible start growing and the interest payments decrease.
It is a short term fix...unless you are doing like VP and paying on princible too.
meatpile
06-21-06, 12:03 PM
I have a 10 year fixed int only that was a point lower than a 30 year fixed.
The rate is 5.125% and will be for 9 more years.
Over 10 years, I'm betting I can earn better than 5.125% in other investments, so instead of having my $$ tied up in a home, I can invest it and have it liquid. The goal is to have the entire mortgage amount in 10 years - if the rates are high - I'll pay the mortgage off. If not - I'll re-fi another INT only and keep my pile growing at a higher rate than the debt, and also maintaining a high tax deduction. In the meantime, I have 9 more years.
Over 10 years on a 30 year fixed, I'd have paid $86k off of my debt. In 1 year since I bought the loan, my equity has increased over $100k. I would have paid off about $6k. In the same year, I have invested about $30k into moderately conservative equities and bonds specifically to offset higher rates if needed. Something about knowing I might need to be ready in 9 years has made me much more excited about investing vs. spending.
It's a game. In 10 years my property taxes will likely be doubled, and in the 30 years I'd have on a fixed loan, my property taxes will be higher than my mortgage was.
I had a talk with a buddy about investment property - not homes. I have no problem having a large mortgage at a low rate on my residence. I would only pay cash for an investment property - I'm too conservative to accept the risk of negative cashflow.
I have to say, at this point, the INT only mortgage for 10 years is one of the best financial decisions I've ever made - next to selling every stock I owned ( non retirement ) summer of 2000 and owning 2 corporations.
However, in 9 years if the combination of:
mortgage rates are double, equity and bond markets crashed, and my dirt has depreciated - I'm fucked.
Then again - I'd be fucked with a 30 year fixed just the same.
I have a 10 year fixed int only that was a point lower than a 30 year fixed.
The rate is 5.125% and will be for 9 more years.
Over 10 years, I'm betting I can earn better than 5.125% in other investments, so instead of having my $$ tied up in a home, I can invest it and have it liquid. The goal is to have the entire mortgage amount in 10 years - if the rates are high - I'll pay the mortgage off. If not - I'll re-fi another INT only and keep my pile growing at a higher rate than the debt, and also maintaining a high tax deduction. In the meantime, I have 9 more years.
Over 10 years on a 30 year fixed, I'd have paid $86k off of my debt. In 1 year since I bought the loan, my equity has increased over $100k. I would have paid off about $6k. In the same year, I have invested about $30k into moderately conservative equities and bonds specifically to offset higher rates if needed. Something about knowing I might need to be ready in 9 years has made me much more excited about investing vs. spending.
It's a game. In 10 years my property taxes will likely be doubled, and in the 30 years I'd have on a fixed loan, my property taxes will be higher than my mortgage was.
I had a talk with a buddy about investment property - not homes. I have no problem having a large mortgage at a low rate on my residence. I would only pay cash for an investment property - I'm too conservative to accept the risk of negative cashflow.
I have to say, at this point, the INT only mortgage for 10 years is one of the best financial decisions I've ever made - next to selling every stock I owned ( non retirement ) summer of 2000 and owning 2 corporations.
However, in 9 years if the combination of:
mortgage rates are double, equity and bond markets crashed, and my dirt has depreciated - I'm fucked.
Then again - I'd be fucked with a 30 year fixed just the same.let's be nosy.....how much are you saving a month with interest only....I am saving about $550.
Freakshow
06-21-06, 12:11 PM
I've been a mortgage broker for years....I do these all the time. Probably the most popular product I'm seeing now is the 30 Year Fixed Rate...with the first 10 Years IO...I think it's a killer product. Most people refinance or move every 6 years.
If you are buying a home that's worth 300,000 and you are putting down 20%(using this number so a second mortgage doesn't have to come into play in my example) and want to pay NO points...30 Year Fixed...your rate would be 6.625% (yes...rates have gone up THAT much as of late...this is actually a GOOD compared to my competitors). Payment would be $1536.75 per month for 30 years...An IO product would be 6.75% $1350 per month. If you pay principal, the loan is recast each month for the first 10 Years. AFTER the intitial 10 years, your remaining balance remains at 6.75% and is principal + interest amortized over the remaining 20 Years.
Would I use an IO product in parts of Atlanta? Southern California? HELL NO...but the lenders actually have placed restrictions on some parts of the country. MY next mortgage will be IO.
And if anyone wants to refinance or buy a house...I'm your man...send me a PM (shameless plug). :acclaim:
fancypants
06-21-06, 12:16 PM
we need a financial forum..........i love listening/reading this stuff
canesin4
06-21-06, 12:17 PM
muslams don't pay interest.
I've been a mortgage broker for years....I do these all the time. Probably the most popular product I'm seeing now is the 30 Year Fixed Rate...with the first 10 Years IO...I think it's a killer product. Most people refinance or move every 6 years.
If you are buying a home that's worth 300,000 and you are putting down 20%(using this number so a second mortgage doesn't have to come into play in my example) and want to pay NO points...30 Year Fixed...your rate would be 6.625% (yes...rates have gone up THAT much as of late...this is actually a GOOD compared to my competitors). Payment would be $1536.75 per month for 30 years...An IO product would be 6.75% $1350 per month. If you pay principal, the loan is recast each month for the first 10 Years. AFTER the intitial 10 years, your remaining balance remains at 6.75% and is principal + interest amortized over the remaining 20 Years.
Would I use an IO product in parts of Atlanta? Southern California? HELL NO...but the lenders actually have placed restrictions on some parts of the country. MY next mortgage will be IO.
And if anyone wants to refinance or buy a house...I'm your man...send me a PM (shameless plug). :acclaim:
meat ain't moving.....he'd be a fool...he lives on golden property...hell it's better than gold....
so saving the principle for 10 years and reinvesting it may work for him......most of us smucks don't have the luxury of knowing a 10 year forcast on the area....hell 10 years ago ballantyne was gold...then pulte and portrait homes shittied up the water with affordable housing....
that's my worry about the 10 year plan.
THE GUTTER
06-21-06, 12:22 PM
Is it more difficult to qualify for the IO loan and what happens after 10 years? You refinance the sales price?
meatpile
06-21-06, 12:32 PM
let's be nosy.....how much are you saving a month with interest only....I am saving about $550.
I forgot - but it's not much more than that. I'm just investing alot more in anticipation of a possible payoff.
The key for me - like Freakshow said - was the 10 year. I've done 2 things for 10 years - be married, stay clean.
I've already been here in my house for 6 - and I'm on my 4th mortgage ( LOL ). When i bought in 2000 rates were 8 7/8%. 30 year fixed.
PLus - something must have been different about the base for IO loans a year ago - mine was less than a 30 year fixed. Freakshow - is it based on LIBOR?
Whatever - the Jumbo fixed 1 year ago was just at or under 6%, and the 10 year INT only was 5 1/8. I don't think I'd have done INT only if it was a higher rate than 30 year fixed.
I also did not choose INT only because I couldn't afford a different type - I think that would be very unwise.
Let's face it - 5.125% tax deductible rate is like free money. I think I could almost borrow at that rate and put it in an 18 month CD and come out ahead - deducting straight off the top and paying LT gains on the 18 months. It's stoopid.
meatpile
06-21-06, 12:37 PM
hell 10 years ago ballantyne was gold...then pulte and portrait homes shittied up the water with affordable housing....
That's interesting. More and more I'm knowing real estate, long term, is only about the dirt. Everything on top of the dirt is an expense.
I'm still tripping about the house around the corner to be dozed at $725k. If I move in 9 years, my house will be demolished. I almost think it would be demolished today. Very close.
outofstate
06-21-06, 12:55 PM
I've been a mortgage broker for years....I do these all the time. Probably the most popular product I'm seeing now is the 30 Year Fixed Rate...with the first 10 Years IO...I think it's a killer product. Most people refinance or move every 6 years.
If you are buying a home that's worth 300,000 and you are putting down 20%(using this number so a second mortgage doesn't have to come into play in my example) and want to pay NO points...30 Year Fixed...your rate would be 6.625% (yes...rates have gone up THAT much as of late...this is actually a GOOD compared to my competitors). Payment would be $1536.75 per month for 30 years...An IO product would be 6.75% $1350 per month. If you pay principal, the loan is recast each month for the first 10 Years. AFTER the intitial 10 years, your remaining balance remains at 6.75% and is principal + interest amortized over the remaining 20 Years.
Would I use an IO product in parts of Atlanta? Southern California? HELL NO...but the lenders actually have placed restrictions on some parts of the country. MY next mortgage will be IO.
And if anyone wants to refinance or buy a house...I'm your man...send me a PM (shameless plug). :acclaim:
Next time put this into words that most here can understand. For example....
If you are buying a mobile home that's worth 3,000 and you ain't putting down anything (cause you is buying it from your ex-BIL's first cousin) and you ain't planning on paying lot rent cause you're gonna park it in your daddy's back yard....and your welfare check is......
Freakshow
06-21-06, 12:59 PM
Is it more difficult to qualify for the IO loan and what happens after 10 years? You refinance the sales price?
May be a bit tougher...but there are ways to get most qualified. This is usually seen in the rate.
And the PURCHASE price isn't part of the equation in a refinance. It's the payoff amount and the value of the home...
Let's say you bought a home for 100,000 and got 1 loan at 7% interest only...using these numbers for simplicity...You'd have a monthly payment of $583. Of course you'd have a huge PMI payment for having over 80% LTV (Loan to Value)...but that's another story...You refinance 4 years later...you'd be refinancing what you borrowed minus any principle. Say you paid NO principle. You'd owe the $100,000...but now your home is worth $120,000. You'd be borrowing at 83% LTV. This will give you a better rate than a 100% (of course rates could be anywhere in 4 years) AND your PMI payment will be MUCH lower.
One thing...refi's can cost $2000-$5000...even more...so you'd need to take that into consideration. You'd probably be borrowing $102,500 or so on the new loan...you'd owe MORE...but you have $17,500 in equity...without paying any principal. Hopefully you've been using the savings to bet on Gamecock games and have gotten rich...
Over 10 years, I don't see how Ballantine or uptown could lose. They may or may not stay hot the whole time, but they're going to appreciate. I don't know of many places that are going to lose any money or not beat bank interest over 10 years, but if any of you have any horror stories, tell me. I'm seriously thinking about an uptown condo.
meatpile
06-21-06, 01:11 PM
Condos tend to appreciate less in hot markets and get hit harder in soft markets.
This may not be true uptown, though.
Freakshow
06-21-06, 01:11 PM
Uptown condos look good now. I'm a LITTLE concerned at the amount being built...still think they'll be good invesments. Guy in my office has bought 3 shitters in Dilworth and bulldozed them. Building new homes...thinks he'll make $75,000 per deal.
CHEAP homes can have problems. I've run into people that bought a home for say $90,000. Problem with these neighborhoods...foreclosure rates tend to run higher. This pulls down the value in the whole neighborhood. Have had to deal with some PISSED off people. I remember one guy had busted his ass in his yard and upgrading his home. He was furious that SIX people on his street had gone into foreclosure...those home sales crushed his home's value.
Freakshow
06-21-06, 01:12 PM
Condos tend to appreciate less in hot markets and get hit harder in soft markets.
This may not be true uptown, though.
A realtor that send me a lot of business is having this problem with a condo he bought in Mid-Town Atlanta (builder and Fred...you'd like this guy). He said the crazy amount of building has hurt him. His condo is on the market for $5000 less than he paid 4 years ago.
Condos tend to appreciate less in hot markets and get hit harder in soft markets.
This may not be true uptown, though.
That's why I'd only consider right uptown, but like Freakshow said, the availability is still high right now. I see a lot more people living uptown now, though, and the more stadiums and other bullshit we build, combined with the likelihood that gas prices don't come down, I see it as an increasingly desireable location. I could be wrong, though, which is why I haven't pulled the trigger yet.
A realtor that send me a lot of business is having this problem with a condo he bought in Mid-Town Atlanta (builder and Fred...you'd like this guy). He said the crazy amount of building has hurt him. His condo is on the market for $5000 less than he paid 4 years ago.
that is happening everywhere other than downtown.....even Weddington's spike has simmered down...my house only appreciated 30K in 3 and a half years....now it's slowly but surely shrinking back down to what I paid. Interest rates have created a buyers market....if they are qualified and willing to pay....they are getting choice deals.....
Freakshow
06-21-06, 01:26 PM
that is happening everywhere other than downtown.....even Weddington's spike has simmered down...my house only appreciated 30K in 3 and a half years....now it's slowly but surely shrinking back down to what I paid. Interest rates have created a buyers market....if they are qualified and willing to pay....they are getting choice deals.....
Just had a closing on a property at 5th and Poplar (new ritzy condos). The realtor told the buyer to expect about 35% appreciation over the next couple of years...While I think whe might be a little aggresive...she may be close. Charlotte is STILL adding stuff to Uptown. Condos are going up like mad, but there is a new Arena, the light rail BS coming in, Nascar HOF (will that help or hurt???), possible baseball in South End or SOMEWHERE around, plus more and more restaurants, bars, shopping....Some guys here have bought some units in a condo that has not even begun construction...and they are already up $10,000!
Just had a closing on a property at 5th and Poplar (new ritzy condos). The realtor told the buyer to expect about 35% appreciation over the next couple of years...While I think whe might be a little aggresive...she may be close. Charlotte is STILL adding stuff to Uptown. Condos are going up like mad, but there is a new Arena, the light rail BS coming in, Nascar HOF (will that help or hurt???), possible baseball in South End or SOMEWHERE around, plus more and more restaurants, bars, shopping....Some guys here have bought some units in a condo that has not even begun construction...and they are already up $10,000!
That's what I'm seeing and hearing. I'd hate to guess wrong with that kind of money at stake, though.
meatpile
06-21-06, 01:33 PM
That's what I'm seeing and hearing. I'd hate to guess wrong with that kind of money at stake, though.
Are you paying cash?
If not - you may lose a good bit of that 'ideal' 35% appreciation losing renters to brand new units in a couple of years.
That's the trouble when alot of new is being built over a period of time. Unless the dirt goes way up, your property will depreciate - why buy a 3 year old unit when you can buy a brand new one? Why rent a 3 year old unit when you can rent a brand new one?
Cash keeps the alligators away. Alligators will eat even a 25% return pretty quick. Plus the realtor fee...
Southern_Yankee
06-21-06, 01:35 PM
I remember one guy had busted his ass in his yard and upgrading his home. He was furious that SIX people on his street had gone into foreclosure...those home sales crushed his home's value.
Crazydave?
:woohoo:
Just had a closing on a property at 5th and Poplar (new ritzy condos). The realtor told the buyer to expect about 35% appreciation over the next couple of years...While I think whe might be a little aggresive...she may be close. Charlotte is STILL adding stuff to Uptown. Condos are going up like mad, but there is a new Arena, the light rail BS coming in, Nascar HOF (will that help or hurt???), possible baseball in South End or SOMEWHERE around, plus more and more restaurants, bars, shopping....Some guys here have bought some units in a condo that has not even begun construction...and they are already up $10,000!
I built some condos on Pecan....from the time the development sign was in the ground to the time I obtained the CO the units prices increased $50K.....only a handful of original investors actually moved in and didn't flip their property....
samething with some condos off Clarice I was working on before moving to FL. Those units were preselling and then reselling before the ground was broke for $20-30K more......
really doesn't matter what kind of loan you have in these cases.....but I can assure you that this condition does not exist in Ballantyne....too many developers have saturated the market and the land is plenty...
union county attempted to infuence market prices and catch up the municipalities by placing a moritorium on building...it worked for a while...but now with interest rates the way they are.....houses are taking longer and longer to sell.
vpkozel
06-21-06, 01:46 PM
Over 10 years, I don't see how Ballantine or uptown could lose.
Bank of America or Wachovia leave. Wachovia would be the better bet.
meatpile
06-21-06, 01:49 PM
...but now with interest rates the way they are.....houses are taking longer and longer to sell.
Boy that's scary, because interest rates are fucking low.
HardHarry
06-21-06, 01:51 PM
Boy that's scary, because interest rates are fucking low.
Just closed a refi a good bit under 6%. They're still low. Also, Micstool is apparently right about the Charlotte market - it's a complete sellers market in the non-McMansion homes. No f'in inventory left in mid to lower range.
Boy that's scary, because interest rates are fucking low.
they aren't 4 and 5% fixed anymore....alot of the risky buyers are squeezed out....not as many buyers equals not as many home sales....which equals buyers market....
Bank of America or Wachovia leave. Wachovia would be the better bet.
A few years ago, I would have figured that either of them leaving would equate to a death blow for the city. Now, I'm not so sure, though it would definitely extend the timeline for appreciation. I'm thinking we're just about over the hump, from "1 or 2 horse town" to "real city".
HardHarry
06-21-06, 01:53 PM
anything under 8%, based on history, is a low rate environment. 4% & 5% are ridiculously low.
vpkozel
06-21-06, 01:55 PM
A few years ago, I would have figured that either of them leaving would equate to a death blow for the city. Now, I'm not so sure, though it would definitely extend the timeline for appreciation. I'm thinking we're just about over the hump, from "1 or 2 horse town" to "real city".
It would be a bloodbath for those 2 areas.
anything under 8%, based on history, is a low rate environment. 4% & 5% are ridiculously low.
was nice while it lasted...picked up a couple properties at 4-5% fixed....couldn't afford to do that now unless I went interest only....one of the properties I bought sold 5 years later for almost what I paid....interest only would have killed me on that one....
Freakshow
06-21-06, 01:56 PM
30 Year Fixed with no points...mid to high 6's. Depends on the day. 6.625% today...Lot of people got accustomed to the ridiculous rates...these are still low.
meatpile
06-21-06, 01:58 PM
30 Year Fixed with no points...mid to high 6's. Depends on the day. 6.625% today...Lot of people got accustomed to the ridiculous rates...these are still low.
I paid 8 7/8 in 2000, and the housing market was SCORCHING.
HardHarry
06-21-06, 01:59 PM
Lots of places offering 30 year fixed with no PMI for 80+% loans for about 6.25%. 15 year fixed for 5.75%.
Lots of places offering 30 year fixed with no PMI for 80+% loans for about 6.25%. 15 year fixed for 5.75%.
none of that touches 4-5%
who wants to take a chance on a 10-15 year refinance only to save a couple hundred a month.....unless you are flipping or selling with in 5 years...you would be a fool not to take a fixed.....
unless you are like Meat and live on Gold and know how to invest the saved money....
not many people are going to fair very well with interest only over 5 years....especially with the over building going on in Charlotte.
So, what is the closest thing to a "no-lose" real estate investment in the Charlotte area UNDER $400k? I see a lot of little lakefront developments popping up in SC as "country/retirement" places for Charlotteans that seem to be selling well, but I don't trust those at all.
So, what is the closest thing to a "no-lose" real estate investment in the Charlotte area UNDER $400k? I see a lot of little lakefront developments popping up in SC as "country/retirement" places for Charlotteans that seem to be selling well, but I don't trust those at all.
think they said it 3 or 4 times....downtown.....is your best bet.
HardHarry
06-21-06, 02:18 PM
So, what is the closest thing to a "no-lose" real estate investment in the Charlotte area UNDER $400k? I see a lot of little lakefront developments popping up in SC as "country/retirement" places for Charlotteans that seem to be selling well, but I don't trust those at all.
IMO, there is very little risk in the market you are looking at. The only time you might not come ahead is short term. Anything 5 years + is gonna make you money. RE is the best investment readily available to most folks.
think they said it 3 or 4 times....downtown.....is your best bet.
OK, how about shitty little house (like trhe ones around Graham), versus highrise luxury apartment condo, versus townhome Uptown?
OK, how about shitty little house (like trhe ones around Graham), versus highrise luxury apartment condo, versus townhome Uptown?
commonwealth is where you buy.
and hurry.
IMO, there is very little risk in the market you are looking at. The only time you might not come ahead is short term. Anything 5 years + is gonna make you money. RE is the best investment readily available to most folks.
not if you do an interest only loan for more than 10 years in a saturated area.
commonwealth is where you buy.
and hurry.
:whoosh:
should have bought last year...but there is still some good shit around commonwealth in the 100-300 range.....this shit will be hot in 5 years.
because of this development....
http://ww.charmeck.org/Planning/Rezoning/2006/018_032/2006-026%20Project%20Plan%20Booklet.pdf
HardHarry
06-21-06, 02:35 PM
not if you do an interest only loan for more than 10 years in a saturated area.
Anyone who does 100% financing I/O loan and doesnt pay down the principal some is an idiot. That has nothing to do with the market or risk.
Anyone who does 100% financing I/O loan and doesnt pay down the principal some is an idiot. That has nothing to do with the market or risk.
READ THE THREAD TITLE
meatpile
06-21-06, 02:39 PM
Sadic -
I'd look at places like NODA, MIdwood, Elizabeth, Edges of Dilworth, Sedgefield, WILMORE, WESLEY HEIGHTS.
You'll get dirt there.
HardHarry
06-21-06, 02:40 PM
READ THE THREAD TITLE
I did man. There are no prepayment penalties on most I/O loans. The minimum payment is just that, a minimum. has nothin to do with market risk. Like vp said, you get one of those loans for flexibility, but you pay the fucker down some.
Damn, any loan really needs to be paid down 6% just to cover the damned agent commissions. Even then, you still wont break even.
meatpile
06-21-06, 02:41 PM
Anyone who does 100% financing I/O loan and doesnt pay down the principal some is an idiot. That has nothing to do with the market or risk.
I disagree. It depends on the term of the loan, the time spent at the residence, the rate, the cashflow, so many things.
If you put down 20%, stay for 5 years, move, and can't sell it for what you paid, that's worse than INT only, zero down, there for 5 years and bringing a check to close.
But this is a different subject.
I did man. There are no prepayment penalties on most I/O loans. The minimum payment is just that, a minimum. has nothin to do with market risk. Like vp said, you get one of those loans for flexibility, but you pay the fucker down some.
Damn, any loan really needs to be paid down 6% just to cover the damned agent commissions. Even then, you still wont break even.
so when you get to the 10 year and you are still paying 100% interest and no princible unless you choose to pay it and the interest rate now becomes variable at 8 percent or so....you think this is smart? You could be fixed and paying more than 1/3 to 1/2 of your payment to princible at the 10 year mark and actually own the house.....
anyway you slice it 10 years interest only with no plans of refinance or sell is a HUGE risk....you have nothing when you are done if you don't pay towards princible and there is a chance the area goes bad or interest rates return to 8%.
Interest only is a SHORT term solution to finacially strapped individuals.....not many of us are buying homes in Myers Park.....Sadic sure as hell ain't....so why would he do that unless he planned on refinancing in 5 years or selling?
you want to sit on the $20K you invest and pay rent? DUMB. If the property value doesn't increase ....you are fucked....why gamble over a couple hundred bucks?
I can't spell worth a shit...but I know about construction and realestate.
Sadic -
I'd look at places like NODA, MIdwood, Elizabeth, Edges of Dilworth, Sedgefield, WILMORE, WESLEY HEIGHTS.
You'll get dirt there.
See, I see those places as a little more risky than Uptown. When you say the value is in the dirt, you're really saying location. My feeling is that for those places to appreciate, Uptown will have to appreciate first/simultaneously, and Uptown real estate is physically more limited than anything outside of it. At least that's how I'm thinking today.
Freakshow
06-21-06, 03:15 PM
Sure...but look at what they are going for NOW. YOu can still get good affordable stuff there. Uptown, Dilworth, etc...should continue to appreciate...but they have already moved up quite a bit.
I did a purchase for a woman last month in Dilworth. The place was LITTLE. She paid $475,000...had to offer $9000 OVER list in order to get it!!!
My first choice was Dilworth...couldn't find shit within my range...
2nd choice was Elizabeth but I couldn't find anything decent that I liked...
3rd choice was NoDa....found what I wanted in a growing area...
Wilmore and Wesley Heights need tons of work....
HardHarry
06-21-06, 03:23 PM
I can't spell worth a shit...but I know about construction and realestate.
I don't doubt it. I also don't think we're really disagreeing. I just think R/E is a great LT investment no matter what, and I/O products are for ST flexibility, not for LT purchases.
My first choice was Dilworth...couldn't find shit within my range...
2nd choice was Elizabeth but I couldn't find anything decent that I liked...
3rd choice was NoDa....found what I wanted in a growing area...
Wilmore and Wesley Heights need tons of work....I had peole buying $350-400K homes in myerspark/dilworth that were only 900 sf and then contracting $400K to remodel the house and make it 4000sf. So they end up around $700-800 to get what they want.
funny thing is...Charlotte's market is so under valued.....I moved from a 3 year old all brick 3000sf house in Weddington on more than an acre....into a 2200 sf house in South Florida....they want $700,000 for the South Florida house.....CRAZY!
QueenCityHillbilly
06-21-06, 03:25 PM
Wilmore and Wesley Heights need tons of work....Wilmore is still a few years away from not sucking ass, but Wesley Heights is already solid. A buddy of mine over the last five years has watched every drug dealer on his street moved out, and his 65,000 dollar investment has already grown to nearly 300,000 with little work on his house. All around him, it's nothing but 200,000 condos going up. If you can get in that hood, I'd highly reccomend it.
Wilmore is still a few years away from not sucking ass, but Wesley Heights is already solid. A buddy of mine over the last five years has watched every drug dealer on his street moved out, and his 65,000 dollar investment has already grown to nearly 300,000 with little work on his house. All around him, it's nothing but 200,000 condos going up. If you can get in that hood, I'd highly reccomend it.
Or is it too late and better to buy in Wilmore? Where are these places, btw?
Wilmore is still a few years away from not sucking ass, but Wesley Heights is already solid. A buddy of mine over the last five years has watched every drug dealer on his street moved out, and his 65,000 dollar investment has already grown to nearly 300,000 with little work on his house. All around him, it's nothing but 200,000 condos going up. If you can get in that hood, I'd highly reccomend it.
I considered it with all the condos and townhomes going up around that area. I like how the greenway is there also but I wasn't sold on the area.
Or is it too late and better to buy in Wilmore? Where are these places, btw?
Wilmore is the neighborhood on opposite side of Dilworth (on West Blvd).
Wesley Heights is the neighborhood behind the bojangles off the 77 exit near uptown...
HardHarry
06-21-06, 03:34 PM
Looks like the secret is beyond just being out about Wesley Heights. I just "discovered" it recently myself, and I'm usually the last to hear about this kinda stuff.
Look at the list prices these days:
Wesley Heights (http://www.carolinahome.com/findHome/results.cfm?nextStart=21&prevStart=-19&displayMax=20&start=1&CFID=2787236&CFTOKEN=20486276)
You will be waiting for both those areas......
Commonwealth and Morningside has plans to become a Dilworth....look at the link I posted. I found several homes in the 100-180 range back in September-November.....I was on the verge of buying 2-3 of them before my wife started banging out her boss and I got popped with another dui.
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