So it’s not pro rata? I guess I’d still open separate accts for simplicity.
No, not for the withdrawals. The conversions are pro-rata for taxation purposes in the year of conversion. The withdrawals of contributions are tax free after 5 years. The link above shows an example of the amounts.
My wife and I are pooling some money with friends and buying a couple small properties. What is the most common or best way to hold the title for us? Joint tenancy, tenants in common? We have no children or heirs and if one of us were to die we’d want the portion of the property to go to the other.
Form an LLC and put the properties in it. Ideally you would have an operating agreement but there are default rules if not.
1 Like
I’d be interested in hearing more about your motivations and, assuming you go forward, how this actually works. At first blush, this (co-owning property with a non-spouse) sounds absolutely terrible to me. Not like, “I am knowledgeable and know this is a bad idea.” More like, “This is the kind of thing that other people might be fine with, and it could be a wise financial decision, but it is completely not for me.”
1 Like
We won’t be buying these to use, they would strictly be investments on our part. I guess I’m just looking at it as a little diversification of investments, the money is not significant to us so if something goes bad it won’t hurt.
One of my good friends buys and manages commercial properties and he is doing most of the work on this, we as a group are putting up some money to join him in one or two of these buildings. He’s done this once or twice in the past but i never joined in.
He also has a larger project open to us but it requires a significant investment and when I read the offering package my eyes kind of glaze over and I don’t really know what I’m looking at, he’s explained it to me but I figured I’d stick with something smaller for now.
I believe the properties will be bought through an LLC, does that mean we as individual investors don’t get a title/deed to it? The title and financing is in the LLC name and we basically just own shares of it proportional to our investment? So he’s raising $100k, if i invest $15k i own 15% of the LLC?
Sorry I’m completely uninformed when it comes to this kind of stuff, I’m golfing with him today and will ask him about it.
Yes, you have it right.
This thread in bogleheads really captures the insanity of what’s happening right now. Cliffs: couple with $400k cash and $600k income can’t buy a house:
https://www.bogleheads.org/forum/viewtopic.php?f=2&t=348133&newpost=5990199
Why do they have to live in a VHCOL location?
I am not defending the guy at all, but his situation is pretty ridiculous.
1 Like
The irritating part is that I’d love to take the other side of the transaction and monetize my current artificially high price. But I can’t. You’d think I’d be happy that the value of my home has (presumably) gone up to a level that’s way too high. But I can’t benefit from it at all.
That’s bullshit. Forward contracts on individual houses please.
1 Like
I hear you. I think a lot of people are underestimating how much leverage they have over their employers right now, like if you tell them “I just worked from home successfully for 12 months I want to live outside the city and come downtown 1 or 2 times a week” a lot of employers are going to go for that.
Anyway, the big unanswered question here is who is actually transacting at these prices? What % of these transactions are happening with 2 urban professionals deciding that they will enslave themselves to a mortgage until they’re 78 and how much if it is just the generationally rich scooping up real estate?
Around me it’s almost all cash buyers. That’s not millennials stretching for a first house.
But where are these people getting the cash?
Stonks
Also if you try hard enough you can shit dogecoin.
not the same situation at all but I purchased a home about a year ago, starting the process as covid lockdowns really began. I wonder if this place has appreciated. I paid 162k, outside Ithaca, NY … so much of my interest has been in the fortunes and outlook for Cornell and other universities here.
1 Like
Speaking for myself, we sold our suburban home (private sale to friend who works at a FAANG, as-is, at asking price less 5% representing agent commission), moved to an apartment in the city, and bought a country place for less than 1/4 of the selling price of our suburban place. We are empty nesters, so don’t care about schools, just distance from the city, family, and ski mountains. Effectively, geo-arbitrage within New England.
1 Like
Checked the mail today and discovered the assessment on my house has been reduced roughly 12%.
This reflects the purchase price, within a couple thousand … so it may be formula.
Funny thing is, I called the mortgage broker a while back asking about the process for having a home reassessed. They seemed to not like this idea but gave me information on doing it. My logic being, I’m paying taxes on this amount more than I should be …
Anyway, I never followed up on that. So the letter is funny, because it basically gives me exactly what I was going to ask for. However, since it’s the town doing it now I worry it’s a bad thing. Lol brain. But that said, any thoughts?
House was assessed at 182k, I bought for 162k, new assessment 160k.
… how do you look at this? No plans to move in the next few years, lower taxes, low interest rate locked in, I purchased about a year ago. … guess the question is, what’s the relationship between sale price and assessment?
It’s always been the case for me that the tax assessment is significantly lower than what a real estate appraisal would be.
I think my current home would appraise about 150k above it’s tax assessment.