Loan are recorded including helocs.
This person doesn’t need us evaluating his risk reward.
Show me the way.
Property radar? Needs to pay subscription.
Yes, that’ll do.
It varies person to person depending on situation. I have already posted two of my friends sold their 2M homes at Cupertino, third one is thinking in that line to take profit. All of them have same feeling that real estate market is peak, let us take money and use all cash homes at a less expensive location.
Now in 2017, Any home coming to the market is sold easily.
see this home property history
https://www.redfin.com/CA/East-Palo-Alto/2182-Ralmar-Ave-94303/home/1617394
This is true. Too much money still floating around. I know of many FANG employees who are 2 or 3 SFH owners in South Bay. One in particular bought a house in Cupertino and immediately rented it a few months ago. These people do not want to consider anything even 25 miles out or deal with investments elsewhere + property management.
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RE (expensive) to RE (less expensive).
Before that is ESPP/ RSU to RE (expensive).
No contradiction in behavior.
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Selling a 2M house with a 1M capital gain will lose a lot of money to tax. Also will continue to lose money to increased property tax every year afterwards.
Sometimes holding is the best option
These people are not thinking. Have they not learned anything from the housing bust? If real estate market crashes, will a home in Cupertino more likely to lose value or a home in some less expensive location?
Yes, they know this very well, but would like to grab the max money and move to new location at low cost full cash option.
For the best case (of my friend) , he bought the home at 500k (year 1996), added 200k (1000 sqft), sold 2M (not exact amount)
Sold 2000k
Commission 100k
Bought+addition 700k
The capital gain is 1200k
LTCG exemption = 500k
Balance is 700k taxable almost 1/3rd lost on tax (tax at 23.88 (20+3.88) IRS + 9.3 CA)
Tax 233k, Balance 466k
Ultimate gain is 966k
He buys a home at Pleasanton through Tracy appx 750k range full cash, completely mortgage free.
He will still have 200k excess cash. Since he bought the home in 1996, he would have almost paid off his loan. That means he has the entire 800k equity at his side.
Now, he has 1M cash free to invest or wait for opportunity (any investment). They will easily have another 750k to 1M in retirement account.
Still, they may continue to earn and take some semi-retirement.
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I guess distance to work isn’t an issue in this case since he bought in east bay? Retired perhaps or close to? Wish I could have bought in 1996, I was still in diapers.
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