Quote:
Originally Posted by OneHungLo
Tommy, let's use a real world example.
We each have $100k a piece.
Tommy buys 1 house with cash. Tommy's earning 10k a year in rental income
OneHungLo buys 10 houses and puts down $10k on each house. OneHungLo takes out a $900k mortgage for 30 years. OneHungLo is breaking even early on, but as the mortgage gets paid down, OneHungLo is earning rental income.
At the end of 30 years -
Tommy's 1 house is now worth $200k making him $20k a year in rental income.
Onehunglo's 10 houses are now paid off (thanks to his tenants) and are now worth $200k a piece ($2 million in total) with $200k a year in rental income.
Who would you rather be?
^^ This is just rudimentary real estate investing. You don't have to be an "economic guru" like you claim to be able to grasp this.
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Better hope you don't have a fuck head playing with the economy then.
because in another scenario one gets mortgaged maxed and then finds interest rates got up 10x what they are now. Property prices cash because less can afford a new loan and those that are going broke dump theirs for what they can get. And all of a sudden your left with a dead asset, that's worth less than you paid for it, and costing your more than your making. Right now, well the past 5 years.. is good times, if your not paying down your debt, be prepared for some serious life adjustments.
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Nice recap here on the events of the past week.
Stoking a fire with gasoline: why the US share market shuddered
Stoking a fire with gasoline: why the US share market shuddered