Quote:
Originally Posted by lio45
But if you know with absolute certainty that your RE asset(s) is worth more than your RE debt even in the worst case scenario, can't the logical part of your brain take over and allow you to sleep well?
I owe millions of dollars and see no reason whatsoever that fact would keep me up at night. It's not even on the list of my top 100 worries.
Now, if someone owed money to organized criminals AND weren't in a position to pay, sure, that's a very uncomfortable debt, and a dangerous one; that would keep anyone up at night, trying to think about solutions to the problem.
But RE debt? That's like the healthiest sort of debt there is.
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Yep.
I was so nervous when I bought my condo in Denver since it was my first purchase. But I walked in the door with instant equity because it was new construction in a booming neighborhood. I had PMI because I put less than 20% down, but I got out of that less than two years into my mortgage my simply refinancing showing I had 20% equity.
Fast forward to now - I still have that condo with an mechanical 20-something engineer paying my rent on time every month with not one complaint while I continue to build equity.
The thought of taking on a second property now of my own in Chicago seems way less stressful. If worse comes to worse, I cash out my condo in Denver, but I see no reason for that happening anytime soon, even if real estate dips in the next year or two.