[Requesting Suggestions/Recommendations] - First time home buyer

[Cornflakes]

I have played with options a plenty and it is not comparable by any means to real estate. Leveraging is there but with Options you need be right on both direction and timing, extremely hard to achieve consistently.

If you buy an option that is five years out and the stock moved in your favor in 2 years, you are not going to see a whole lot of benefit of that leverage when you still have three years to go.

2x,3x, 4x ETfs are just vehicles created to suck the lifeblood out of most investors and handout small return to a small group. The only people who make money with those are brokers and market makers.

 

[Kenkoko]

I have played with options a plenty and it is not comparable by any means to real estate. Leveraging is there but with Options you need be right on both direction and timing, extremely hard to achieve consistently.

If you buy an option that is five years out and the stock moved in your favor in 2 years, you are not going to see a whole lot of benefit of that leverage when you still have three years to go.

Options trading is not like real estate investing. But don't you also have to be right on both the direction and timing to make money in RE?

You are probably talking about out of the money options which have no intrinsic value. Buying anything longer than 1 year out of the money options is generally regarded as gambling. If you buy near the money or in the money year + options, then it moves with the stock

 

[Kenkoko]

2x,3x, 4x ETfs are just vehicles created to suck the lifeblood out of most investors and handout small return to a small group. The only people who make money with those are brokers and market makers.

What is this argument based on? Are you saying 2x 3x ETFs do not track correctly? That would be false.

If you are basing the argument on who makes a killing financially, then yes I agree with you. But couldn't we make the same argument about RE? the agents makes a killing not the investors.

 

[momopi]

Folks,

I have been renting in Irvine (UCI area) for the past 7 years. Considering the interest rates, I have decided to buy a new home. I just started looking
[list type=decimal]
[*]My budget range in $700k - $900k.
[*]I am looking for a 3+ Bedroom
[*]Would prefer a bedroom on the 1st floor along with kitchen. (Some plans have kitchen on the 2nd floor)
[*]Small to mid size backyard preferred (not a hard requirement)
[*]Have kids in elementary school
[*]Given my range and requirements, I am willing to compromise on my communte/drive time. Work in Irvine, currently.
[*]I am looking for June/July 2021 time-frame. Can move in earlier or wait, if needed.
[*]From my limited research, looks like the avg HOA is $200-$250. Would want to stay in this range.
[*]Can pay extra for the home in comparison to higher HOA.
[/list]

Questions, needing your expert suggestion/recommendation/opinion
[list type=decimal]
[*]I visited Portola Springs Communities. However, communities that are in my range (Celeste, Montara) seem to be sold out. Would you know if there are additional homes planned around there?
[*]I plan to visit Great Park. However with the Memorial/Cemetery and Chemical issue, not sure if I should consider them? On the website, I see some homes available in Rise Park, Novel Park and Cadence Park.
[*]Are there other new communities that are going to be built in Irvine and any rough time frames?
[*]From your experience, what are other things a first time home buyer should consider in the grand scheme of things.
[/list]

Hopefully, your responses help others as well, who are in a similar boat.

Thank you for reading through. Sincere, thanks.

As others have mentioned, it'll be tough to find new homes in your price range and specs.  However, if you're willing to settle for SFR's built in early 2000's, it may be possible to find a SFR for under $1 million with $50-$60/month HOA and low mello roose.  Check West Irvine area by corner of Jamboree and Robinson Dr.  Look up "Myford Elementary School" on the map.

There are also SFR's in the Walnut community with low HOA and mello roose.  Look up "Harvard Circle Park" near Walnut and Harvard.  These homes were built in late 1990s.

 

[irvinehomeowner]

That 3.5% was awesome timing and ended up being 80x more looking at my current equity.

Not like I knew... I just wanted to buy a house.

 

[Mety]

If you would like to be a homeowner, just buy. If your lender approves of course...

 

[kpatnps]

I love when I read post like this. Reassures me there?s always lifelong renters for my properties.

It always gives me a good chuckle, reading posts like these.

A rental property in Irvine is nowhere near the top choice for any savvy investor.

And having lifelong renters is not even a top consideration of the advantages of investing in real estate.

Dont you love brag posts that fail?

 

[irvinehomeowner]

Since we are discussing investing, which should really be a secondary concern when buying a home there are a few things to consider:

- Interest rates are the lowest they have been ever
- Paying your mortgage increases your equity even if appreciation is flat, something renting does not do
- Some people don?t know how to invest. Since ken likes to mention mentoring younger people, so many young people I know still don?t take advantage of their 401k, esp with match.

Again, there are advantages and disadvantages to both. Yes, Irvine is expensive... but if you can afford it, it?s a great place to own and live. Or rent and own rentals.

 

[usctrojancpa]

I have played with options a plenty and it is not comparable by any means to real estate. Leveraging is there but with Options you need be right on both direction and timing, extremely hard to achieve consistently.

If you buy an option that is five years out and the stock moved in your favor in 2 years, you are not going to see a whole lot of benefit of that leverage when you still have three years to go.

Options trading is not like real estate investing. But don't you also have to be right on both the direction and timing to make money in RE?

You are probably talking about out of the money options which have no intrinsic value. Buying anything longer than 1 year out of the money options is generally regarded as gambling. If you buy near the money or in the money year + options, then it moves with the stock

Home prices tend to be much less volatile than stocks/options and in the longer term and a desirable area like Irvine will always appreciate over the long term.  Sure the timing of the purchase will affect the return on the purchase of the home but if the home is owned for the longer term the home will end up being worth more than what it was paid for. The price of land and labor will continue to go up over time so that will support home prices, especially with all the helicopter money that the Fed and Gov't have thrown out during this pandemic.  I thought back in March/April I'd be able to get my planned home renovations down for a discount...nope, looks like I'm probably going to pay more than I would have last year because there is so much demand for home renovations.

For most buyers, a home is a commodity that holds intrinsic value because it creates a sense of stability for their family.  I've had several buyers this year that have moved from the greater LA area as well as from other larger cities to Irvine because their jobs have become "mobile" and the main reason for the move to Irvine was because of the schools, location, safety, planned community, etc. With where interest rates are currently, there's no reason why buyers should put more down other than they need to for the home purchase because when the inflation rate is higher than the inflation rate you create additional positive leverage.