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Buying Home & Investing for Future

Discussion in 'Business & Tax Advice' started by FormerBoxer, Dec 24, 2016.

  1. FormerBoxer

    FormerBoxer Regular Member

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    Hey guys!,

    I hope everyone has a great Holiday! For you guys who make a living online, did you buy your home and show the bank your online earnings and get approved? Next month I go for a home loan and will show my self-employed income for 1 year. I'm just hoping the bank is going to treat me good even though I'm self employed.

    I'm the provider for my family and would like to start with buying a home, investing my money in some interest savings account, save money for college fund, etc.

    What do you guys do for investments?
     
  2. BassTrackerBoats

    BassTrackerBoats Super Moderator Staff Member Moderator Jr. VIP

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    For a conventional loan they typically like to see 2 years of self employed income tax returns unless your previous profession was similar in nature and the income is close or higher.
     
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  3. FormerBoxer

    FormerBoxer Regular Member

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    Good to know BTB. Do they typically like to see that with a FHA loan as well? If that is the case it gives me more time to save and put a nice down payment on a house. Any advice on how I should invest to earn some good interest? Thanks
     
  4. BassTrackerBoats

    BassTrackerBoats Super Moderator Staff Member Moderator Jr. VIP

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    That would go for an FHA loan as well but the system they use to qualify you does allow some leeway if you have an extremely good credit score or a fair amount of assets, income to loan, etc.

    Odds are it is free to apply and, if so, you may want to go through the process as it will tell you the things you need to do to qualify.

    FHA is a lot easier to get qualified for than a conventional loan too so you may be able to get the mortgage.

    My opinion is that we are in a good real estate market and I expect to see property values climb.
     
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  5. FormerBoxer

    FormerBoxer Regular Member

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    Great! Credit score is 720. I would have a big lump sum on a down payment. Do the banks go by gross or net when they qualify you? My old 9-5 job i made 60K gross a year and obviously I didn't net that. Every time I went for a car loan, personal loan, etc. I used gross and got approved.

    I was thinking about buying rental property to use for an investment. Is that a good idea before trying to get a loan for a home? Thanks
     
  6. BassTrackerBoats

    BassTrackerBoats Super Moderator Staff Member Moderator Jr. VIP

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    Rental property is going to require that you put down 20% if I remember correctly and if you have no experience in real estate I'd probably suggest that you get your feet wet with a home you live in first.

    They use gross income.
     
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  7. FormerBoxer

    FormerBoxer Regular Member

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    Thanks again! Do you know why they use gross income especially for internet marketing. Lets say I make 20K gross a month and I net 10K after advertising etc. Isn't that a huge dip in income?
     
  8. BassTrackerBoats

    BassTrackerBoats Super Moderator Staff Member Moderator Jr. VIP

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    They use gross income in terms of what you are paying yourself, not gross revenue of your business.

    So if you are generating 20K a month and your business expenses are 10K a month they would look at your gross income as 10K a month and your net at 10K - taxes.

    You'll need to present a schedule c as well as your 1040 when applying so they can see the whole picture.
     
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  9. Gereral_Zod

    Gereral_Zod Registered Member

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    Just out of curiosity, buying a home isn't always the best financial move, not in my experience, let me attempt to explain:

    I bought a house years ago and was always spending money on maintenance, refurbishment, wife wants a new kitchen kinda stuff, IKEA (fuckin hated trips to IKEA!) life insurance policy (compulsory). Certainly a reassuring feeling "owning" a property, but it was a liability on the balance sheet! Wasn't earning me a penny.

    It was only when I rented it out, did it really start making financial sense.

    Think about the total freedom that renting gives you with non of the additional financial commitments that the realities of "ownership" often pose. It's so very often overlooked in my view...

    For longer term investing, the stock market (S&P 500) is looking really exciting for the next 10 years atm! You could perhaps speak to a broker about your financial goals vs options.
     
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    Last edited: Dec 24, 2016
  10. MikeyMikey13

    MikeyMikey13 Senior Member

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    The point you was making about your house being a liability was discussed extensively in the book Rich Dad Poor Dad. Opens your mind a bit about buying a house as your bigger investment.
     
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  11. gh0stxvx

    gh0stxvx Jr. VIP Jr. VIP

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    I think in the US the housing market climbs around 1% a year. Whereas the UK it's about 7% a year. I decided to buy in the UK but if I lived in the US I'm not actually sure I would - inflation is higher than that.
     
  12. Gereral_Zod

    Gereral_Zod Registered Member

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    Certainly was Mikey!

    Another valuable lesson was paying yourself first. Starting with just 10% the same day the salary or invoice receipt hits your bank account, BOOM! Transfered into a savings account and put to work into a rolling investment strategy.

    Pretty common sense stuff Kiwosaki layed out, but I've always wondered what came first, his millions or his books, seminars, and other licenced BS!

    I reckon he was the original Tai Lopez, but slightly more persuasive, credible and articulate...
     
  13. IllmaticBars

    IllmaticBars Registered Member

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    I love how real estate investing advice is in the same subsection as guys looking to do blackhat SEO for their little crappy websites to make enough money to pay the rent lol.
     
  14. gh0stxvx

    gh0stxvx Jr. VIP Jr. VIP

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    And yet, plenty of people on here do own their own homes or could but choose not to.