I recognize this is a loaded question, but interested in the groups feedback so here it goes..... We are looking at purchasing our second home and are debating how much to put down. We can put anywhere from 20% down (assuming base to avoid PMI) to 40% down. Its about a $160K swing to lower the monthly payment by $1K. This is with a 6.25% loan. The lower monthly payment is most appealing from a day-to-day perspective, but I also recognize what the the extra money could do for us if invested accordingly. From researching online, the general consensus seems to be it comes down to personal preference, but what are everyones thoughts?
Agree with this. If the 1K a month puts significant strain on the budget you may be cutting it too close as is. If it doesn't as I assume, just eat that, keep the cash and invest it elsewhere.
Buying a house tomorrow in a small town 10 min from the outer edge of Indy suburbs but growth is pushing that way. $50,000 cash purchase, $85,000 cash renovations. Comps in town are going for 180-220 right now. Rent would be right at $1200 for residential but it's on the main roadway of what could be a cute downtown strip and zoned commercial. If I want to lease to a business it could easily work and I can get $1500 but I can't go back to residential once I do. If I keep it I'm going to do a cash out refi in 6 months to pull my money out. I have three options once the work is done 1. Sell it and make $40,000 2. Pull 100% of investment back out. Rent it residential for $1200. Cashflow $200 and wait for suburban sprawl to drive up value (5-10 years) 3. Pull 100% of investment back out. Try to rent it commercial for $1500. cashflow $500 but it's going to be tougher to get tenants. Anyone with experience have thoughts?
20% #1 or #2 depending what your goals are, flipping in Indiana was great for me. I kept choice properties long term - the problem is outside of a few areas around Indy is rents are comparatively low and people aren’t moving there. If you’re in it for the long haul and going to start a RE portfolio, go for it. Otherwise just take the money and roll it into more flips.
Why not go whatever the lowest down payment is? To my knowledge you can’t refi down to 3%, might as well get that extra leverage now and if you want to renovate it after a few months you have the cash to do so.
Max LTV on Fannie loans for second home purchase is 90% (but would have MI and likely a higher rate at that LTV). 75% for second home cash out refinance.
Commercial all day. Commercial tenants, commercial leases, better rent, not sure on value that's the only problem. In our area cap rates don't matter for small commercial. Price per sq ft is more accurate, more residential style. Small commercial is 300psf where resi is more 225psf. But some parts of town that's flipped. Your buildout will be different for commercial. Probably way less expensive. I'm renting all day long with long term mortgage. Cross collateralizing instead of cashout go do another. We don't sell, get rich slow. Good real estate too hard to buy.
I somehow just learned that social security has limits, and if you cross that they just stop taking that out of your check. So thats cool. Follow me for more tips guys.
I know I'm late to this, but I just opened a Roth IRA through Fidelity(already had an account with them for my 401k). Now what the hell do I do?
Yeah that's about as far as I got in my research. I have no idea what to invest in. This is all a foreign language to me.
This is the Fidelity fund that tracks the S&P500. Read a bit and decide if it’s right for you. https://fundresearch.fidelity.com/mutual-funds/summary/315911750
So, I have the ability to invest through a mega backdoor Roth IRA through work. From what I’ve been told by my workplace brokerage and benefits office, I can contribute up to 60 something thousand a year which I can’t necessarily do, but it would be nice. I already max out my 403B, and put another 15K-22,500 pretax into a 457. However, I’m thinking of reducing, or completely replacing what I contribute to the 457 and using that to super fund my Roth. Any reason why that’s a good or bad idea? Either way, my 403B contribution keeps me in the 24% tax bracket.
Are you planning on retiring early? The 457 withdrawal plans are really nice to support that. Can you do Roth as part of the 457?
Yes, I can contribute to all at the same time. I just need to make sure that maxing out the 457 and 403B won’t somehow limit what I can contribute to the Roth. But, no. I’m getting a bit of a late start, so will probably retire early 60s
I was reading a post on Reddit or twitter that suggested anyone whose income may fluctuate around the thresholds due to bonuses, commissions, etc. can just back door it every year, without issue, just to be safe. Basically said anything over 100k single should do it. ¯\_(ツ)_/¯
Also it's not Mega backdoor Roth IRA, it's Mega backdoor Roth 401k. It's aftertax 401k dollars that can be converted to Roth and either left in the 401k or rolled to a Roth IRA depending on what the plan allows. I guess it's up to you what you want to do between the 401k, 457, 403B, and Roth IRAs (I assume you would have to do the backdoor method based on the amount you are saving). My understanding is the 401k and 403b share the limit while the 457 can be maxed separately. For Roth IRAs you can't do a backdoor conversion if you have a traditional IRA already without converting it. https://www.irs.gov/retirement-plan...re-eligible-for-more-than-one-retirement-plan If the 457 has a Roth option it it, I would do that. You may want to use the other Roth to try and limit RMDs since you are saving so much pretax.
Thanks. Yes, I do have the option of a Roth in the 457. I hadn’t even thought of doing that, but that actually makes a lot of sense. And, for clarify, and if it matters, the mega backdoor Roth pathway is not through my 401K/403B, but through another workplace DCP (401a) that allows non-Roth after-tax deductions.
yeah definitely zero labor extra really to avoid potential headaches if you're in a volatile income world
vanguard makes doing a backdoor roth comically simple. just a big huge button on their traditional ira's saying "convert to roth" and they leave the old account so you can use it again next year.
Anyone care to stick their neck out on 2024 predictions? Recession (2 consecutive down GDP quarters) y/n? S&P500 up/down by 12/31/2024? CPI o/u 3% by 12/31/2024? Best/worst performing Magnificent 7 stock?
Taking a look at my 401k right now. I’m assuming I’m 30ish years from retirement. My current balance is: 77% Blackrock Equity Index (S&P 500) 23% TargetDate (before I realized those are a scam lol) Currently I have it set up for 90% of future contributions to go into S&P but wondering if I should ‘diversify’ a little bit. I have limited options if I don’t do target date but any input would be appreciated: State Street Real Asset NL Series Fund CI C Blackrock Russel 2500 (Small/Mid/Spec) Blackrock NonUS Large/MidCap Blackrock US Debt Index (Bonds)
Yeah I can do a one-time rebalance. I just hadn’t yet because we just switched servicers so was waiting for that. That’s kind of what sparked my question above, didn’t know if it’d be worth getting into a little bit of something besides S&P
I feel like they’re far too conservative for investors in their 20s and 30s. Those people don’t need to be in bonds or whatever the hell else super low returning positions they put you in. Not sure the makeup of them for older investors.
~.08 Then simply choose a further out date. These are actually great set it and forget it options that are common in most ppl’s 401ks. My wife’s 2065 target date has like ~7% bond exposure. No qualms with 100% S&P/VTI, but bonds aren’t the boogeyman and most ppl don’t reallocate properly as the years go by.
I chose the furthest target date fund possible at my first job and it still had bonds. My only gripe. Super low expense total market ETF was a better play IMO.