Hi all,

I haven't found much information on this topic through googling, so I was wondering if anyone could share their insight.

I've been trading commodities for the last 3 years. Before trading I played poker for about 8 years. None of this work is salaried.

I have a fairly high degree of confidence in my ranges of income for current market environments, but I know the world could look a lot different 5 or 10 years from now and I could risk being marginalized or burning out. I find it difficult to determine the fair value of a house I could buy given these parameters.

It feels like I should aim to purchase a cheaper house to provide peace-of-mind cushioning plus extra money for investment and re-evaluate as the time is right. To what extent though, I am clueless. There is no math formula that I am aware of where I could plug in future years of income with a higher standard deviation and weigh that against current home prices. I feel like most all "How much can you afford?" calculators don't really help me.

I'm also curious if the downpayment should be different in these circumstances in a historically lower yield environment. If I were to purchase a more expensive house I could use a larger downpayment to make my mortgage payments lower, but maybe this is super fishy since that's putting up a lot of money that's just sitting there and not gaining yield elsewhere.

Another alternative is continuing to rent and using the majority of my money for investment until I am marginalized as a trader or start a family and move onto something else that figures to be salaried. I've given this option thought, but the renting bit seems like setting money on fire. Hard to weigh that against having more liquidity for investment.

I don't plan on buying a house in the next few years. I'd like to be positive I'm knowing where I'm gonna live when that time comes. I'd like to be prepared when that time comes, though.

Any comments would be appreciated.

I am from another part of the world but I presume the basics still apply the same. Everyones opinion is different but I have experience of similar circumstances.

Don't continue to rent, purchase a property to live in, you are burning money renting unless you have extreme circumstances.

Having non salaried income the amount you will be able to borrow will be low, and you will more than likely have to put down a larger than usual down payment. You will probably be on a poorer rate as well. Find out exactly what your options are when the time comes before making any decisions.

Don't put yourself at risk of ruin or burning out. Keep a years living expenses in cash regardless of what choice you make. The theory that if your mortgage's interest rate is less than investment returns means you should keep the debt and invest your spare capital only really applies when you have guaranteed income regardless of market conditions.

If I were you I would buy a 2 or 4 family and get 30 year fixed as you are planning to be an owner occupant.

I would put as little down as possible given artificially low rates, which probably means FHA first time home buyer loan. This has higher PMI (Private Mortgage Insurance) but is probably worth it if the opportunity cost of your capital is high (as with a successful trader / poker player).

If you don't like this idea I would continue to rent. Contrary to popular belief, buying a home is not an investment. It is a liability.

Myth: Renting is lighting money on fire.

Truth: In a lot of cases, renting + investing the difference is better. Especially in situations exactly like you describe.


For a young man, unmarried, variable income stream, savvy enough to at least put his money into index funds... renting + investing is GTO.

Buy a house later in life when you are more settled and confident you will live in that house for ~10 years+.


Let me ask you this: Why do you want to buy a house?

You should just save up 50k-100k, buy a plot of land, buy 8 shipping containers and modify the shipping containers into a 2560 sq ft house. Then if you are marginalized or burned out, you don't need to worry about rent/mortgage eating away at your savings.

Good way to never get laid

How much non-salaried income we talking about--- size does matter.

I doubt a bank would have much faith in a guy who s income is generated by trading a personal account.


Karen the Supertrader is under investigaion by the SEC, BDR, KOL, IRS, ABC, BLM,,,,,,lol. Traders get lucky and think they are good and then lose it all and then some.

The argument for buying a house, for me anyways, can't be that different from most people's motivations in buying a house. Mortgage rates are probably never going to be this cheap. Renting is "lighting money on fire".

I'd be happy to delve into that topic aswell if merited but I was more curious about how one goes about considering a housing price point when they don't know what their expected income is 10 years from now. I feel like I am doomed to rent until the housing market dips again (brave assumption for the next 20 years) and I BTFD.

I don't know why you're worried about whether or not your boyfriend will bang you if your house looks like this

Why? First, mortgage rates are correlated to 5-10 yr treasury rates, and those been trending down since the 80s. And even if you still believe that, then just short bonds.


In the absence of any other investment opportunities, probably. But not if you're putting cash to work.

Build a spreadsheet. At least according to my model/assumptions, a house has negative return until year 3-4. Much of the loss is due to 4% broker fee.

fyi the current mortgage rates in my euro country (20% down):

10-year ~ 1.2%
20-year ~ 1.9%

Im getting $150k on a cash out refi. 3.125% adj. Gonna buy a $150k condo that rents for $1500 a month.

Its like FREE money. Not sustainable. As Kiyosaki say go get yours...............lol.

http://jlcollinsnh.com/2013/05/29/wh...le-investment/

Please read this for more info on the subject about renting vs buying. Given it will be a v big investment choice either way, it's worth your time.

Stupidest article I read in a long time, stopped after about 3 minutes. If you take financial advice from that guy you are an idiot.

Renting is "lighting money on fire" because you're paying someone else to use their space.

But the simplistic view that you're missing is is that a mortgage is "lighting money on fire" because you're paying a bank to use their money.

And don't forget home ownership has a bunch of other costs associated with it that don't go to improving the value of the underlying asset (tax and basic maintenance).

Rent vs buy is extremely complicated and has a lot of factors to consider. I'd suggest doing a bunch of research or posting in the Business, Finance, and Investing for help.

We had K1 distributions > half the cost of the house and substantial verified liquidity and it was still a huge pain in the ass. Banks are so hyper regulated now. Maybe things are slightly better at community banks.

A house to live in is not an investment. Its a disposable like peanut butter. Think like a rich man....................hahahaha.

knowing draghi you might be getting paid 2% to mortgage five years from now

I recognize that all these topics will require a lot of study in the next year or two should I be serious about home buying. That still doesn't address the issue of identifying how much to tie up into a property when I don't know my income levels on the back end of the mortgage term.

it aint rocket science. YOU RENT!

When people make the buy vs. rent comparisons do they take into account the time spent on maintenance? For an average non-property manager person this has to be substantial (and just anecdotally thinking about the times I've heard men at work reference what they'll be spending their weekend on).

Seems like renting is the obvious decision. "Renting is lighting money on fire" is level 1 thinking. Review the NY Times rent vs buy calculator as well as other posts in this forum about the topic.

Meh that's mostly an excuse to get out of the house, fire up a J-bird, and polish off a rack of Bud Light.

This. Maintenance and taxes suck too. I personally like being able to hit the eject button when I want. Harder to do that when you have to sell a house first. The ratio of 'annual rent: buy price' is a good thing to monitor though. If it gets too low renting becomes much more painful to do. If its higher I'm pretty stoked to just keep renting.

My dad is constantly bitching about maintaining his house/land. It was built in 2000, so not some old house. Needs to be painted, deck resealed, house/deck flashing was screwy and needed fixing, new AC unit, new washer/dryer, currently a chimney leaking issue, new roof in future, landscaping costs, resurfaced wood floors--dogs, barn needs new siding, maintenance for a long gravel driveway, retaining wall along the driveway, and plenty of other **** Im sure that isn't coming to mind. It can just get expensive and beat you up. So that has taught me when I do end up buying a place to go for something that is efficient to run, with low maintenance, and long lasting materials.

But Clayton as far as your Q, I'm no expert but seems to me its a very personal preference type of thing. How much room you have between your income and expenses left over for a mortgage payment, how consistent your income is likely to be, probability of it lasting the duration of the mortgage and/or probability of you being able to replace that income with something else, how much in savings you're willing to dip into if your income fluctuates, how much value you place on having savings going untouched if your earning dips. Just how much margin you're OK with. Like for me I could "afford" a pretty big place hypothetically but I dont want to sacrifice the ability to not really work again if I don't want to. If I buy a million dollar condo and quit earning money at some point I'll prob have to go back to work or sell the place.

Yeah a lot of points I agree with here. I don't want to operate on tight margins, but I'd like the nicest house under comfortable margins.

This was all built in under the logic that renting is fishy. A lot of people here seem to agree that renting probably isn't as fishy as I'm thinking it is. Always down to hear a counter-argument.

I guess I'll have to give a more serious look on renting versus buying calculators and see what I can find.

Renting is not fishy, nor is leasing (a car). It just seems that way to lower and lower-middle class people.

Let's say a savy, high net worth person does want to buy some real estate. Do you think they pay cash? Or do they finance it?

It is all about the spread.

You want to avoid a large capital outlay if you have a high opportunity cost on that capital.

If you want to buy property as an investment, make an investment. Don't confuse your house with an investment though. Just because it is your biggest "asset" doesn't make it an investment.

Kiyosaki actually has a good line about this. He is like, "I always think of assets as things that make me money." Your house is a liability because there is no spread for you, just debt service and other expenses (unless you are planning on renting out your other bedrooms..).

And one last point, under the US's current system, you do not actually own your property (despite what 99.9% of people will tell you). You rent it from the government.

Think you own your (real) property? Stop paying your property taxes and see what happens to "your property."