I'm tired of seeing people posting that "mortgages are just the bank fucking you" and "owning property is letting the...

I'm tired of seeing people posting that "mortgages are just the bank fucking you" and "owning property is letting the jews win" and all this shit. Yes, centrol banks own everything and there's not much you can do about it, but that doesn't mean you have to be a pathetic NEET for your entire life.

Here's how to own a house and make more money with the bank's money than the bank is making:

Find a decent vacant lot for ~$50k. There are lots around if you look online in your area, it doesn't have to be huge but the more you can get over a half acre, the better. Yeah, you might have to look outside the fucking city you spoiled piece of shit.
Now the bank will fund you to build a house on that lot, it's called a builder's mortgage. They give you money in increments based on what the final value of the house/lot will be. They have no problem with lending you $200k to build a house that would sell for $400k.
Their first payment has the cover the cost of the lot AND get your house to 40% completion, though, which is where most people struggle to get through. You'll probably need to borrow some money to get through this part, but don't worry, you'll get it back once the build is done. They are giving you the FULL cost to build the house in full, they're just lame about the increments they give it to you in, in order to cover their ass. They don't want to give you the first payment and have you go to Vegas and blow it, and all they can take from you is a vacant lot that isn't worth what they've given you already.

Other urls found in this thread:

cibc.com/ca/mortgages/calculator/mortgage-payment.htm
ratehub.ca/blog/new-construction-mortgages/
twitter.com/SFWRedditGifs

Build a decent house. As in, don't build a piece of shit. Spend some time looking at floorplans and decide on what you're able to afford square footage wise. I just recently built a 1750sq ft home with a fully finished basement for ~$230k. The monthly payment on our mortgage is ~$1150. Make sure your building contractor is including the price of a fully finished basement in the total cost. Two bedrooms, kitchen, bathroom, laundry room in the basement, and there are two sets of stairs to access the basement. One is from the garage, one is inside. Think about which rooms should be above which; you probably don't want the living room in your basement below your bedroom. Use your head.

Complete the house, and rent the basement out to either a couple or two separate people.
Price the rooms comparatively to what a dorm room costs at your nearest college/university if you're near one, and if you're not, make sure it's priced comparatively to other rented properties in your area. If shitty ass two bedroom apartments that are small in an apartment complex are being rented for $1000/mth, you can get more than that easily. You are offering a brand new, clean, never been lived in, LARGE two bedroom apartment.

Now, use their rent to pay your mortage off. Where I am, shitty fuckin dorm rooms are rented for around $600/mth. That makes renting the basement to two students EASY for $1200/mth, because it's the same price as a dorm but a hell of a lot nicer. We're close to a university, so that allows us to be a bit more choosy with who we want living there as well, but it's not all that hard to find small families looking to rent a basement apartment rather than a regular apartment, because, again, it's nicer.

With the mortgage being $1150/mth and rent coming in at $1200/mth, any amount of money you are able to save is able to be chopped right off of your mortgage. My wife and I budgeted ourselves around $1100/mth, so I knew we are comfortable with giving that up. So we put that on top of the rent, and the mortgage gets paid off fucking way faster.

By renting the basement out and also holding ourselves responsible for "paying" the mortgage ourselves as well, we are able to pay off a shitpile of the mortgage over the course of two years. The interest in the first year was around $6500, and we're aiming to pay off close to $28k. The second year we'll pay off a similar amount, but the interest will be less due to owing less.

In two years time, we'll be able to sell a house that we initially paid $230k for, and have the mortgage paid down to ~$190k, for $400k. Our house was appraised by the township at $450k nearly right after we moved in. If you don't believe that houses sell for a lot more than what it costs to build them, you need to give your head a shake. Houses are still being built, so there's your proof.

That's $210k in our pockets if the appraisal is accurate, but we paid ~$55k into the mortgage during that time. Now, we could have done that right off the hop (sold it), but the house value is still pretty much "brand new" after two years. Also, if you don't live in the house for at least a year (I think) you get taxed on all that. So you might as well live in the new house you just designed and built for a couple years.

So basically you start with fuck all, nothing, and go to SAVING ~$155k over the course of two years for living in a new house and renting the basement. You don't even have to sell it, if you stay there and continue doing that, you'll have the mortgage paid off in EIGHT YEARS. The bank gave you the money hoping it'd take 25 or even 30. The bank is willing to give you an amortization period of 30 fucking years and you can pay it off in ten and the house is brand fucking new. And if you don't want to commit to that, you can sell it after the 2nd year for a profit.

Now, you don't have to pay the mortgage off that fast. If you're okay with giving the bank way more in interest, you can have your tenants pay the mortgage for you forever. You're still on the hook for property tax and utilities and all that, but not having a mortgage in a brand new house is a pretty sweet deal. It's certainly way better than being the one paying the rent for the other guy's mortgage.

Here's the numbers because I know people will try to say that it's bullshit. You need to make enough money in order to support an $1,100 mortgage payment, that's it. If you can make the mortgage payment, the bank is happy to give you the money and rape you on interest over many years.
Those of you paying rent probably pay close to that already.
My bank is CIBC so I used their mortgage calculator for reference.2.79% on a two year fixed rate
cibc.com/ca/mortgages/calculator/mortgage-payment.htm
>First year
$230,000 + $6417 interest = $236,417 owed
Payment is $1,064/mth = $12,768 per year
1200 in rent x 12 months = $14,400 per year
You are paying $1,100 per month = $13,200 per year
So you're paying off $27600 total minus the interest per year

Which means, after the first year, you owe $208,319
>2nd $208,319
>3rd $186,028
>4th $163,112
>5th $139,551
>6th $115,329

So now you've lived in your house for five years. The bank will make ~$3200 off of you in interest the following year.

>7th $90,426
>8th $64,823
>9th $38,501
>10th $11,440

And obviously the entire mortgage is paid off in the 10th year.
Imagine in ten years from now, you were able to sell a house for $400,000+ and literally put all of the money in your bank account. Are you currently able to save $40k per year and put it into your savings?

Also, these numbers just get scaled up the closer you live to a big city. You need to be approved to borrow more for the vacant lot is the only difference; the costs to build the actual house are comparable. It's the price of the land that is scaled way up, so you just have to borrow more to get started.
Protip: Don't live in the fucking city if you aren't making mad dosh already

So, to round this all up, the bank lent you $230,000 with the intent of you taking 30 fucking years to pay it off. This amounts to them raping you in interest because you took so damn long to pay it. You end up paying them back twice as much, that's why banks love giving out mortgages; people are fucking stupid and don't realize how important extra payments are.

You paid the entire thing off in 10 years, and you were under zero pressure the entire time because, if something were to happen in that time and you were in need of money, your mortgage for that month was already paid regardless. You don't even have to be frugal with your savings, this is assuming that you're holding yourself obligated to pay for your own mortgage and that's IT.

Now, you own a house that costed $230,000 to build.
The bank made ~$34,480 in interest.
You own a house that can be sold for $350,000+ easily, more if you are smart about the design, placement on the lot, etc and now you are making $1200/mth right into your pocket if you don't want to kick your tenants out and take the basement back for yourself. If you want to kick them out as soon as the house is paid off, you've got a finished apartment to put your kids bedrooms, playrooms etc in.
You do plan on having kids, right? Or have you given up on that, too?

You borrowed money from the bank... and you made a lot more money with it than the bank did, as well as got yourself a new house to live in, and worry-free mortgage payments for a decade. Oh, and you own a house in 10 years, and that's by holding yourself to the bare minimum of paying your own mortgage and having tenants. If you can save more than that, you could have it paid off faster.

Bump, good thread.

I literally had no idea you could even do this

cool story bro. you're still merely renting the land because of property taxes

Am I merely renting this Timmies coffee because I paid tax on it, too?

difference is that's a one-off tax. The property tax is annual. never goes away. will likely go up too

and you dont even need to build a mcmansion in the suburbs. find a empty lot or a crack house in some older neighborhood and build a small bungalow thats brand new. who wants to live in the suburbs anyway? with all these cameras and smart phone tech led lighting theres absolutely no reason to be afraid of living in the city anymore

How much is property tax in America/Canada? In Australia/New Zealand I've never paid more than 2k in rates a year.

>theres absolutely no reason to be afraid of living in the city anymore

Well there's the fact that it's expensive as fuck and is priced outside of most people's range. That's one reason.

>difference is that's a one-off tax. The property tax is annual. never goes away. will likely go up too

You can't get away from paying property tax if you want to own property. I don't even know why you're bringing that up, you can't avoid it. It's like saying that you shouldn't work a legit job because you'd have to pay income tax

I bought my five bedroom, on 15 acres, for 200 and my mortgage is less than what people pay for a 1 bedroom apartment. The house is worth 380. I could rent the basement. No card debt, or car notes. It's not so bad.

not in the south

Mine is 1% of the value of the property each year.

the further into a big city you get, the more the prices are going to go up. I'm not entirely sure of what you're getting at, but if you're saying that it's affordable to live in the city in the south, then it's probably way cheaper to do what I've outline just outside of the city. it might be dirt cheap

your thread is useless and can never work in reality when NEETs have little to NO employment history and no recorded income. A bank wouldn't return their call let alone loan them a penny towards something like this. After all if it was this easy to make money the banks would be doing it themselves. Oh wait...

Owning land is fine. Everything else is not.

Wow great point, people that don't have a job probably can't get a mortgage, thank you for pointing this out for the people that might not have known!
+1

Good job dude, 15 acres sounds unreal. Are you near a college or university by chance?

this. also in places/towns that DONT suck enjoy paying 7-10k a year in property tax (200k-400k home) or lose your land and house.

That get comfy quick scheme falls apart after you manage to get your home built and have to pay 80% of your neet bux salary just on tax.

Bump - OP knows his shit

Ehh, I have a house with 15 year mortgage now. I've thought about renting a room in my basement but then I wouldn't have the freedom that I do know in my house.

If I were more of a hippie, I'd do an AirBnB or something but having new strangers every week sounds even more weird.

You know, it's not for everyone man. If you're already kind of set, you might not need to make a sacrifice like giving up the basement and having tenants, right? Maybe you're fine without.

Well my property tax is $4500/yr and I don't think my area sucks. $10k/yr would mean I'd be living in a million dollar home

So here is my situation, what should I do?
>I have an empty lot by the lake, 1+ acre
>I own outright my other house values around 200k
> I want to build a nice large home on said lake lot.

I never heard of a builders lot and I don't believe you. Do you have some links.

How many times have you done this?

What is the minimum amount of income you need to pull this off? $50k+?

weew boi that is one old pasta

OP did you forget to mention that porperty prices pretty much rise all the time? that original $400K valuation will likely be much higher after 10 years too.
nice post

Dude, if you own a 1 acre lot by the lake, you can make a fucking ton. Cottages where I live sell usually sell for more than houses.

It's called a builder's mortgage or a builder's loan, and if you already outright own a house and a vacant lot, the bank will have no problem with giving you one. You're in a great spot in my opinion. Build a nice cottage on that lot and start renting it out.

I've seen shitty looking cottages near here rented out for $3000+/week all godamn year long. All fucking year and I'm not making that up.

I don't know what kind of links to give you though. Here's a canuck link ratehub.ca/blog/new-construction-mortgages/

I've done it once, why the fuck would you do it more than once? Unless you're going to try to make a career out of it.

Technically, you don't need money to actually do it, but you need to get approved for a bigger loan from the bank if you don't have any money to start. If you can make a big down payment on a mortgage on the vacant lot, the bank has equity in the lot and it's easier to get them to give you a builder's mortgage against the lot.

Man, house prices in Ontario fucking skyrocketed this past spring. A buddy of mine was living in a fucking shitty little house, like not a nice house, and he bought it for $164k three years ago and he sold it for $310k this spring. Made out like a fuckin bandit

Well yeah but it's important dude

I am trying to avoid a loan, right now I am saving to build.
Something to look into though

Are you planning on selling that lake lot or building to rent it out and make money?

Thanks brother

My bank is cibc too and I think I might be able to actually do this right now. They have already approved me for some mortgages

How does one deal with a builder without allowing him to fuck you on construction time, overheads etc?

Well the best way is definitely by doing some research into what each trade is going to be doing, really. When you know that all of the plumbing in a new house is done with plastic tubing that fucking anyone can install in literally one day, it becomes easier to tell if something isn't right.

If you don't know fuck all about construction, you need to put a lot of faith in the GC (General Contractor, the company that manages the build) and they are making money too. It would help if you knew someone that had a basic knowledge that was willing to help out a bit.

The bank agrees to a certain amount, though, and the GC has to agree to have everything with that budget. If they go over budget because of how much time it took or something, that's not what they agreed to. The bank is only lending you so much. It's definitely harder if you don't know anything but it's incredibly easy to do a bit of research. If the GC tells you the electrical is going to cost $20,000, call a local electrician and ask them to ballpark the cost of basic electrical install on a new house. If they tell you around $10,000 then tell your GC to fuck off and look for a new one.

cheers m8

Top rated Post!

They're just lazy. A rent is pretty much the same per square foot as a mortgage payment on something comparable without the tax advantages or equity accumulation. They simply don't wan't the responsibility of maintaining the property and/or they can't get 20% down.

But rather then face up to the fact they are lazy poorfags, it's just easier to claim sour grapes.

To live in mainly maybe rent if we need to move.

For me it always came down to this:

I need a place to live. My options are as follows:

1. Home ownership (condo or house)
2. Home rental (apartment, house, condo, etc)
3. Alternative home (RV/House Boat)

In my area a 600 square foot shitty apartment rents for ~2k per month. There are homes in the area in non-shitty neighborhoods which could be had for a comparable mortgage payment. There are almost no places to long term live out of an RV or house boat, and options for a house boat are expensive since you need to rent a space at a dock.

So your options are throwing your money into a black hole or getting equity for what you're putting into your home. Right now I have coworkers who are renting a place a fraction of the size of my home for the same price, and their money is going away forever. Meanwhile if I sell tomorrow I get back practically everything I've put into it. The only argument people have is the tired old bullshit

>I don't want to maintain a home
>buying/fixing my own stuff? AWFUL!
>lawn care or shoveling snow? No way!

These are soft excuses for soft people. If you pay a 2k mortgage you're throwing away 24k per year. Is 24k per year in equity worth occasionally having to replace a dishwasher yourself, or cutting the grass for an hour on Saturday? I'd say so.

Correction 2k rent. Mortgage is obv. not throwin git away

I pay nearly 4k a year a block away from the ghetto. I paid 35k for the house 7 yrs ago, fixed it up and it is now worth 140k. I will now go bankrupt living in my 35k house near the hood
God bless America!

Recently saved up enough money to buy myself an apartment.
Bought it for $123k and am renting it out. Mortgage is $950/mo, renters are paying me $1100/mo
If you can get in to property in any way its probably going to be worth it.
It was just recently appraised as being worth $160k

or, take those 230k dollars, put them in a fund. get 10% profits each year. wait 8 years.

230k * (1.10)^8 = 493k

you doubled the money, and you didnt even have to lift a hammer or deal with fucking noisy students. only risk is that the economy wont crash. (will just be a setback of few years, if it does)