For the Finance Bros

creepycoug

In a weird way, I'm thinking this will work to my advantage given my retirement timeline.

Building a vacation house. Own the lot on the lake free and clear. The house we designed (always easier to draw up a house than build one) was going to be between 900 and 1m to build, and a lot of that was lumber and the fact that contractors have been in the catbird seat. "You'll pay it and you'll be happy to wait 18 months for me to start."

Rate hikes have already cooled off housing, and another 100 bps won't help. Eventually, this should catch up to the market. Lumber is already heading back down, and eventually contractors will be hungry again. I've dealt with them when they are, and the conversations are very fucking different. "I can get us a dirt guy who will do that in a couple of days. He owes me a few favors and we can get it for $X." vs. "We need a good dirt guy for that and they're not cheap. At least $X and up from there."

I figure I can finance part of that, albeit at higher rates, and then when rates come back down, and they will at some point, I can re-fi. But I can't re-fi an overpayment on the house. It's a toggle, but I'd rather take the higher financing cost than pay more on the underlying purchase price. The former can be fixed later when rates change; the latter is permanent ink.

Happy to have anyone tell me that's a stupid way to think about it and why.

As to my portfolio, I'll still pour cash into equities aggressively, and an extended dampening of the market will give me better buying.

This all assumes my income is safe. I'm superstitious so I'll pass on making bold prognostications about that. When things get shitty enough, nobody is safe. But I'll say this much ... the nature of my role is such that you don't start with me when cutting time comes, and you'd typically go through several rounds before you got to me. That would hold true at pretty much any organization. But, again, in the end, we are all eligible for the chopping block.

Pitchfork51

I'm a reformed finance guy now a tech guy. So I don't understand

creepycoug

Addendum: this is all predicated on the assumption that the rate hikes actually help manage the inflation problem. If we have rate hikes and no downward pressure on inflation, then I'm not doing anything.

Pitchfork51

creepycoug said:

Addendum: this is all predicated on the assumption that the rate hikes actually help manage the inflation problem. If we have rate hikes and no downward pressure on inflation, then I'm not doing anything.

When you just lose all your money in 2019 you don't even have to worry about it. Just focus on income lol

But to me it sounds like you are okay regardless just keep the plan straightforward and don't get screwed


Otherwise you fall into the trap of like I gotta get this perfect even better than I would for clients! Then you fuck it up by procrastinating and coating yourself time.

If you sit there trying to time the future you'll end up with no house and pissed regardless


And due to the fact I'm trying to weasel my way into being your son in law I suggest you move asap

DoogieMcDoogerson

I am in the exact same boat. Retirement timeline 8-10 years off...

Bob_C

Rates aren’t going down anytime soon, at least not without a huge event. I’d take new money out of the market as there is going to be another 20% dip and then wait for the economy to crash and then build. Gonna be a lot of people out of work and should be able to get a far cheaper build 12 months from now.

creepycoug

Bob_C said:

Rates aren’t going down anytime soon, at least not without a huge event. I’d take new money out of the market as there is going to be another 20% dip and then wait for the economy to crash and then build. Gonna be a lot of people out of work and should be able to get a far cheaper build 12 months from now.

My guess about return to low rates is entirely based on how well the moves work on inflation. If we have to make several more jumps to get it under control, then I assume they'll do that. By the then the economy should be more than cooled off, and nobody likes being at the helm when that happens, and the pressure, political and otherwise, to push rates back down to free money is very hard for the lever pullers to resist. That's how I see it rolling out. How long that will all take is the big question.

But as we're seeing with gas, price manipulation causes huge changes in behavior. Keep hiking rates and people will stop buying houses until prices are yugely adjusted accordingly.

WestlinnDuck

creepycoug said:

Bob_C said:

Rates aren’t going down anytime soon, at least not without a huge event. I’d take new money out of the market as there is going to be another 20% dip and then wait for the economy to crash and then build. Gonna be a lot of people out of work and should be able to get a far cheaper build 12 months from now.

My guess about return to low rates is entirely based on how well the moves work on inflation. If we have to make several more jumps to get it under control, then I assume they'll do that. By the then the economy should be more than cooled off, and nobody likes being at the helm when that happens, and the pressure, political and otherwise, to push rates back down to free money is very hard for the lever pullers to resist. That's how I see it rolling out. How long that will all take is the big question.

But as we're seeing with gas, price manipulation causes huge changes in behavior. Keep hiking rates and people will stop buying houses until prices are yugely adjusted accordingly.

You can over pay as long as prices are rising. But when the bubble bursts and prices have to have a direct relation to earnings and cash flow, then there will be the yuge price adjustment.

BleachedAnusDawg

Hey guys, guess what I heard from a lender the other day who finances new construction loans? They're now talking about 40 year mortgages. Tells me that rates aren't coming down soon, and that they don't expect home values to crash, either.

creepycoug

BleachedAnusDawg said:

Hey guys, guess what I heard from a lender the other day who finances new construction loans? They're now talking about 40 year mortgages. Tells me that rates aren't coming down soon, and that they don't expect home values to crash, either.

If I were to finance today to start construction, I would do 5/1 arm. Maybe even roll the dice on a 3/1 if they still do those. I don't think rates will stay high (they're still not 'high' historically) more than a few years. They just won't.

creepycoug

WestlinnDuck said:

creepycoug said:

Bob_C said:

Rates aren’t going down anytime soon, at least not without a huge event. I’d take new money out of the market as there is going to be another 20% dip and then wait for the economy to crash and then build. Gonna be a lot of people out of work and should be able to get a far cheaper build 12 months from now.

My guess about return to low rates is entirely based on how well the moves work on inflation. If we have to make several more jumps to get it under control, then I assume they'll do that. By the then the economy should be more than cooled off, and nobody likes being at the helm when that happens, and the pressure, political and otherwise, to push rates back down to free money is very hard for the lever pullers to resist. That's how I see it rolling out. How long that will all take is the big question.

But as we're seeing with gas, price manipulation causes huge changes in behavior. Keep hiking rates and people will stop buying houses until prices are yugely adjusted accordingly.

You can over pay as long as prices are rising. But when the bubble bursts and prices have to have a direct relation to earnings and cash flow, then there will be the yuge price adjustment.

Right. I don't want to overpay. My bet is trading short-term pain in higher rates for long-term value in a lower purchase price.

MikeDamone

I'm mostly retired. But a former client is making a run at me with a billing rate I've not had in my life. 3 year commitment.

I'm have the rest of the month to mull it over

Doogles

Who needs property when you can blow it all on Rolexes?

#TeamFastStrategy
#creepycougofTheWest
#PuertoRico>Cuba
#Wepa

Pitchfork51

MikeDamone said:

I'm mostly retired. But a former client is making a run at me with a billing rate I've not had in my life. 3 year commitment.

I'm have the rest of the month to mull it over

Take it and donate to the nearest blm chapter as reparations. It's the only way to assuage your guilt

Kaepsknee

creepycoug said:

Addendum: this is all predicated on the assumption that the rate hikes actually help manage the inflation problem. If we have rate hikes and no downward pressure on inflation, then I'm not doing anything.

It will start to look a lot like Stagflation come mid 2023. And nothing other than moar GDP will stop that train. And that’s gonna be HARD. As we can’t rely on cash out refinance guysm anymore.

PurpleThrobber

Buy low, sell high.

That’s all I can provide without sending an invoice.

UW_Doog_Bot

More to write but I'm on mobile. Tldr

If you can lock in 5% while inflation is 9% you do it and you do it now. Doubly so on a hard asset that will track inflation. Neither rates or inflation will be going down anytime soon.

Then again if your building it to retire in its all paper money beyond the taxes. New construction is also a premium that will depreciate some but oh well.

I'm at <50% equity @2.5% .25m from the beach so fuck whatever happens in housing. If anything I'd take a downturn just to be able to pick up some more properties out of California for the eventual Venezuela like exodus.

RoadTrip

creepycoug said:

In a weird way, I'm thinking this will work to my advantage given my retirement timeline.

Building a vacation house. Own the lot on the lake free and clear. The house we designed (always easier to draw up a house than build one) was going to be between 900 and 1m to build, and a lot of that was lumber and the fact that contractors have been in the catbird seat. "You'll pay it and you'll be happy to wait 18 months for me to start."

Rate hikes have already cooled off housing, and another 100 bps won't help. Eventually, this should catch up to the market. Lumber is already heading back down, and eventually contractors will be hungry again. I've dealt with them when they are, and the conversations are very fucking different. "I can get us a dirt guy who will do that in a couple of days. He owes me a few favors and we can get it for $X." vs. "We need a good dirt guy for that and they're not cheap. At least $X and up from there."

I figure I can finance part of that, albeit at higher rates, and then when rates come back down, and they will at some point, I can re-fi. But I can't re-fi an overpayment on the house. It's a toggle, but I'd rather take the higher financing cost than pay more on the underlying purchase price. The former can be fixed later when rates change; the latter is permanent ink.

Happy to have anyone tell me that's a stupid way to think about it and why.

As to my portfolio, I'll still pour cash into equities aggressively, and an extended dampening of the market will give me better buying.

This all assumes my income is safe. I'm superstitious so I'll pass on making bold prognostications about that. When things get shitty enough, nobody is safe. But I'll say this much ... the nature of my role is such that you don't start with me when cutting time comes, and you'd typically go through several rounds before you got to me. That would hold true at pretty much any organization. But, again, in the end, we are all eligible for the chopping block.

What region is your lake house going to be on? I would love to have a mountain/lake home someday. I just need to find an area with great weather that is still a hidden gem.

creepycoug

RoadTrip said:

creepycoug said:

In a weird way, I'm thinking this will work to my advantage given my retirement timeline.

Building a vacation house. Own the lot on the lake free and clear. The house we designed (always easier to draw up a house than build one) was going to be between 900 and 1m to build, and a lot of that was lumber and the fact that contractors have been in the catbird seat. "You'll pay it and you'll be happy to wait 18 months for me to start."

Rate hikes have already cooled off housing, and another 100 bps won't help. Eventually, this should catch up to the market. Lumber is already heading back down, and eventually contractors will be hungry again. I've dealt with them when they are, and the conversations are very fucking different. "I can get us a dirt guy who will do that in a couple of days. He owes me a few favors and we can get it for $X." vs. "We need a good dirt guy for that and they're not cheap. At least $X and up from there."

I figure I can finance part of that, albeit at higher rates, and then when rates come back down, and they will at some point, I can re-fi. But I can't re-fi an overpayment on the house. It's a toggle, but I'd rather take the higher financing cost than pay more on the underlying purchase price. The former can be fixed later when rates change; the latter is permanent ink.

Happy to have anyone tell me that's a stupid way to think about it and why.

As to my portfolio, I'll still pour cash into equities aggressively, and an extended dampening of the market will give me better buying.

This all assumes my income is safe. I'm superstitious so I'll pass on making bold prognostications about that. When things get shitty enough, nobody is safe. But I'll say this much ... the nature of my role is such that you don't start with me when cutting time comes, and you'd typically go through several rounds before you got to me. That would hold true at pretty much any organization. But, again, in the end, we are all eligible for the chopping block.

What region is your lake house going to be on? I would love to have a mountain/lake home someday. I just need to find an area with great weather that is still a hidden gem.

Lake Chelan - north central washington is, to me, the real God's country. There is no place I like better, not even the Keys.

RoadTrip

creepycoug said:

RoadTrip said:

creepycoug said:

In a weird way, I'm thinking this will work to my advantage given my retirement timeline.

Building a vacation house. Own the lot on the lake free and clear. The house we designed (always easier to draw up a house than build one) was going to be between 900 and 1m to build, and a lot of that was lumber and the fact that contractors have been in the catbird seat. "You'll pay it and you'll be happy to wait 18 months for me to start."

Rate hikes have already cooled off housing, and another 100 bps won't help. Eventually, this should catch up to the market. Lumber is already heading back down, and eventually contractors will be hungry again. I've dealt with them when they are, and the conversations are very fucking different. "I can get us a dirt guy who will do that in a couple of days. He owes me a few favors and we can get it for $X." vs. "We need a good dirt guy for that and they're not cheap. At least $X and up from there."

I figure I can finance part of that, albeit at higher rates, and then when rates come back down, and they will at some point, I can re-fi. But I can't re-fi an overpayment on the house. It's a toggle, but I'd rather take the higher financing cost than pay more on the underlying purchase price. The former can be fixed later when rates change; the latter is permanent ink.

Happy to have anyone tell me that's a stupid way to think about it and why.

As to my portfolio, I'll still pour cash into equities aggressively, and an extended dampening of the market will give me better buying.

This all assumes my income is safe. I'm superstitious so I'll pass on making bold prognostications about that. When things get shitty enough, nobody is safe. But I'll say this much ... the nature of my role is such that you don't start with me when cutting time comes, and you'd typically go through several rounds before you got to me. That would hold true at pretty much any organization. But, again, in the end, we are all eligible for the chopping block.

What region is your lake house going to be on? I would love to have a mountain/lake home someday. I just need to find an area with great weather that is still a hidden gem.

Lake Chelan - north central washington is, to me, the real God's country. There is no place I like better, not even the Keys.

I was wrongfully arrested there once and charged with MIP. I requested a court hearing and pleaded not guilty and won my case. It is gorgeous there but have to imagine it's very expensive now.

creepycoug

RoadTrip said:

creepycoug said:

RoadTrip said:

creepycoug said:

In a weird way, I'm thinking this will work to my advantage given my retirement timeline.

Building a vacation house. Own the lot on the lake free and clear. The house we designed (always easier to draw up a house than build one) was going to be between 900 and 1m to build, and a lot of that was lumber and the fact that contractors have been in the catbird seat. "You'll pay it and you'll be happy to wait 18 months for me to start."

Rate hikes have already cooled off housing, and another 100 bps won't help. Eventually, this should catch up to the market. Lumber is already heading back down, and eventually contractors will be hungry again. I've dealt with them when they are, and the conversations are very fucking different. "I can get us a dirt guy who will do that in a couple of days. He owes me a few favors and we can get it for $X." vs. "We need a good dirt guy for that and they're not cheap. At least $X and up from there."

I figure I can finance part of that, albeit at higher rates, and then when rates come back down, and they will at some point, I can re-fi. But I can't re-fi an overpayment on the house. It's a toggle, but I'd rather take the higher financing cost than pay more on the underlying purchase price. The former can be fixed later when rates change; the latter is permanent ink.

Happy to have anyone tell me that's a stupid way to think about it and why.

As to my portfolio, I'll still pour cash into equities aggressively, and an extended dampening of the market will give me better buying.

This all assumes my income is safe. I'm superstitious so I'll pass on making bold prognostications about that. When things get shitty enough, nobody is safe. But I'll say this much ... the nature of my role is such that you don't start with me when cutting time comes, and you'd typically go through several rounds before you got to me. That would hold true at pretty much any organization. But, again, in the end, we are all eligible for the chopping block.

What region is your lake house going to be on? I would love to have a mountain/lake home someday. I just need to find an area with great weather that is still a hidden gem.

Lake Chelan - north central washington is, to me, the real God's country. There is no place I like better, not even the Keys.

I was wrongfully arrested there once and charged with MIP. I requested a court hearing and pleaded not guilty and won my case. It is gorgeous there but have to imagine it's very expensive now.

Very. I got in on the dirt part years ago. I was actually in the red on the purchase for years, but fortunately I paid cash and didn't feel the pressure to sell during the recession.

Chelan used to be party central when I was a kid. It's not that way anymore.