Sorry it took me awhile to respond, thanks for all the comments Chelone I have lots of relatives who have a great retirement doing what you are doing. MIL struggled to put the kids through college on a teachers salary and now in retirement is rolling in it. Keep it up I have no problem mortgaging or not mortgaging my own house. Our real estate taxes are high, probably more than many mortgages, so even if you got rid of a mortgage you are still paying 1k a month in taxes. In the above example, I probably would do option 4, if I really had a 5% mortgage I would not pay it off and probably stick part of the money in a CD paying 5.5 or whatever rate I could get above 5! To pay it off really would be leaving money on the table if you could SAFELY get more than that. I agree that Universal life is seldom a good deal and I would only do that if I thought from an insurance point of view it was a better deal than term for some reason. Otherwise I think its just a scam. The problem I had with the post that started this, if you have a mortgage at 5% and now have some extra cash, great, do not park it in your house because you really can get more at the bank. However the advisor was suggesting pulling money out (does not matter REF or HELO) just so you have it in your hands instead of it sitting dead in your house. Thats a great idea but if I am borrowing at 6% and can only SAFELY invest at 5% who is going to pay the spread? Also what about the 10k in closing costs I paid to pull the equity out? Worse what if I do follow a hot stock tip that ends up not so hot?! People are tempted when they have acess to so much cash (I think I could manage but who knows). Dave claims its an issue of safety to have too much equity without owning it outright. The HELO that was suggested would actually be one way to safeguard the eequity. Do not tap it unless you really need it, the perfect storm scenrio that Dave mentioned where people cannot tap the equity and lost their house even though they have lots of equity Thanks for the compliment Celtic, I just could not figure out how to adress the shortfall in an owner occupied property. Ia lso agree with you about the rental increase issue, 6% annally is impossible, office leases around here have a 3% increase, sometimes less. CMarlin I love your examples and you have given me things to think about. My DH thinks I am the most risk averse person on the planet so I doubt we will be competing for property (especially from NY!). In running your numbers why even invest the 500k? If your debt service at 6.7% is about 116k and your income is 144k, even assuming taxes are 20k why tie up so much? Do the lenders require this? Is it to give yourself a perfect storm cushion? Why not put aside 100k in an interest bearing acount instead and maybe put down 100k so you can cover incidentals with the rental income? I have no idea how this works. What is an SFR? Also do you buy rentals locally? You mentioned you research the areas which assumes you go outisde of your local area, do you go out of state? Just curious. What about I have Two real estate stories I think about that stop me from following your lead, I guess if prices really do drop in a mini crash maybe I will rethink it. Although there are still lots of people like me who know a bunch of people who recently got rich on real estate so we wonder if we could do the same and I always wonder about things everybody is doing, someone has to lose money doing it. Not saying you CMarlin I actually think your plan is sound except for the 6% but I assume even at 1 or 3% you will still make money (although how does that play into local tax increase, here they have been increasing taxes up to 6% PER YEAR based on the rapid increas in value of these properties). How many apartments do you feel you need to own when starting out to truly spread the risk so to speak? Also of the 144k, what percentage is overhead unrelated to taxes and mortgage. What are those expenses? Here are the stories that stop me. In 1986 a wealthy physician I know (not well) decided to invest in real estate out of state in Boston. With the 1987 crasg the condo market went belly up and they could not sell these in the late 80s. He and several others were general partners. One of his relatives who got him into this ended up losing her law licsence over this! They tried to sue him and he almost lost everything outside of this (had a large home etc) fortunately most of his assets were in his wifes name anyway for liability reasons relating to his medical speciality, so they dropped the suit when they realized this. This same guy started trading stock on margin out of his retirement account in the late 90s, his account at one point was up to 42 million! Needless to say he is still working after that market crash and he is now near retirement age My father was approached by his accountant in 1975 who was running a tax shelter. He and his partners were buying a building near Lincoln Center in NYC. At the time the neighborhood was a bad and they paid 1m for a 40 story building plus garage (400 per car per month) and retail stores in the lobby (now a Chase Bank, a drugstore and a McDonalds). Dads share would have been 100k but back then he did not have it and even if he did, well I get my risk averse thing from him! For some reason I remember telling him to invest but who listens to a 12 year old and again they really did not have that kind of money to throw out with 3 kids. In 1987 (yes at the absolute height of the market) I bought a last remaining sponser apartment in, you guessed it, that building for more than double what 10% of a 200 unit building would have cost 12 years earlier! This was a fluke dad did not realize it until he saw the purchase contract. They ended up selling the apartments back to the tenants for 10m in 1985! They kept the master leases on the garage and the McDonalds so I am sure that funded someone's retirement. The irony is this was sold as a tax shelter, it was not supposed to even make money! Dad has no regrets (well other than that 4th child they never had!LOL) he says that for every successful deal he was offered, there were 20 that failed and he would have lost his investment I know this is way too much information but its what makes me leary about real estate as an investment. I actually just want a bigger house for me and my household, I do not care if its paid off or not as long as I am not awake nights worrying about how I can pay the mortgage. Still trying to figure out how to get there Its funny I flip flop on the do it yourself investing. I hate being told what to do and need to understand it before I can commit. I also hate mutual funds as a general rule excpet for the ones that are based on indexes. I sort of get frustrated with magazines like money that seem to try to make everyone feel like they need to be in mutual funds and not just one, but a portfolio of them,. Are they secretly owned by a constortium of mutual fund. Also I wonder what an investment advisor can tell me? Its like my theory on stock brokers, if they were so great at picking stocks why would they need me to make money. No offense intended to any investment advisors. I do think an individual investor can beat the market average (or not!) even if they do not have access tp all the inside information because they have flexibility that a mutual fund running 1B does not. Then there are days when I look at my house which is basically decorated but the reality is that it lacks the fine tuning a decorator could give it but I hate the idea of living with something someone else has chosen for me(I tend to return gifts too). Its sort of like that with investing, I am not comfortable with the loss of control but I do not have the time and energy to follow this all the time

We purchased our home as an "AS IS" foreclosure with a VA loan.. I can tell you that there is no such thing as reduced pricing simply because it is listed as AS IS when it comes to a home loan if that is what you are asking? The lending party will inspect and appraise the house and property at what they consider a reasonable price whether you feel it is reasonable or not regardless of the asking price.. The inspection will reveal in written detail what is acceptable and what is not.. AS IS means as it stands NOW..meaning that the institution that owns it will not put any further work into that property for repairs etc. It's up to the foreclosing owners to decide if they will make any improvements such as roofing, etc. to get the property sold but usually AS IS means no further repairs unless the prospective buyers want to throw money into that property and bring is up to inspection codes before going to closing. It would be foolish to throw your own money into housing that may in the end not be yours.. Keep in mind that YOU will be paying for all inspections and appraisals most likely..we did anyhow.. I will admit freely that the VA and FHA have a very thorough inspection system which is for your benefit and we have dealt with both of these government backed loans. I will also mention from experience that foreclosures are almost certain to have liens of some type on them and ours was not discovered until the title search was completed and that lien must be paid off by the owning/foreclosure institution and that sure held up our closing date. I am sure others have had exceptionally good results with buying a foreclosed property, we didn't, and I will never deal with a foreclosed property again. I see nothing wrong with the concrete flooring as long as it's not cracked, it is acceptable flooring in different parts of the country. I would definitely contact the owning institution listed by way of the realtor and get your answers upfront as to who and what resposibilities are for each party. YOUR lending institution is there to safe guard you and themselves, not so with the sellers. Good luck and happy house hunting and get it ALL in writing!

roselvr, you couldn't be more wrong, but that's what happens when you make up your own story, including endings. Go back and reread this post, making like you have no clue what is going on. Maybe ask a friend to read it to see if they get confused. I am not the only one confused; it is due to the way you originally told the story. I mentioned that if you would have added more facts to your 1st post - Chin up everyone, our home sold in 2 day, BY OWNER, for 15K over the Appraisal. The Appraisal came in ridiculously low, but then again if you would read the comps they used, you'd see at least a partial reason for it. then a blurb more here about the appraisal.. Next I would follow with, the buyers looked at other houses for more and said ours was the best for the price, and that even though the appraisal came in low and they knew we didn't have the contingency, they are still happy because they can pay the difference. yada yada This just goes to show that in real estate, you never know what will happen! The ONLY mention of Court was due to 'discussion', CHATTER, between ALL of us, as far as what happens, or COULD happen in instances such as this when the Appraisal comes in lowballed. There was never plans that we were going to Court, because they truly LOVE the house, and it meets the list of criteria that they had lined out during their search. There were no threats, period. Had you added this part (about lunch / and discussing) before mentioning court the 2 times you did, it wouldn't have sounded like a threat. As I said, it's the way you told the story. Now if for whatever reason you NEED to feel that we scammed our buyers, then have at it, I don't really care. I have learned that there are people like you and a few others on this board who just can't stand it if someone else has a bit of happiness or good fortune. Hubby and I are thrilled, our buyers are elated. I said that the way you put things made it sound like. After you elaborated, we now know more of the story. I'm probably in the same boat as you FWIW. I highly doubt they will find comps similar to our house due to different reasons, size, shape, landscaping, driveway. So I have a personal interest in a story such as yours. So congrats, and if you haven't closed I hope all goes well.

Interesting twists and turns and the conversation is kind of like one we're having at work - where is AI valuable, and where are "soft skills / people focused skills" valuable? In Zillow, I would think that they have a myriad of tools available from which to draw and SHOULD be reflective of what an appraiser SHOULD use, as well. Appraisers are supposed to be a data driven as possible to remove bias and the potential for fraud. Banks want a very "safe" value estimation to reduce their risk. OTOH - a Realtor i would view as having a forward looking perspective to judge (or intuit) the market GOING FORWARD in order to advise their client on the future attractiveness and appreciation of a property that they will take into consideration that would be different than an appraisal number. Also, for the seller, the Realtor should be able to see that same thing and price accordingly. Appraiser (and Zillow) likely use only backward looking tools, but I would expect Realtors to add insight and the more emotional aspects of any transaction in order to be able to give better insight into the future state and if something is priced right / a good deal based on a more forward view.