homescope.io
As an aspiring real estate investor, I found spreadsheets and proprietary online calculators like Bigger Pockets to be complicated or slow. With Homescope, you can bring this within your workflow and estimate your operating expenses instantly.
1. Do other developed countries allow 20x leverage on cash to buy homes?
2. It seems like most real estate investors aren't pursuing commercial loans, but instead are using personal home-loans. Is there any regulation of this? ("Oh, I intended to live there, but then something happened")
3. How can banks afford to give out loans at interest rates that are less than inflation? Is this due to Federal Reserve rates, and if so - do other developed countries maintain such low interest rates + tax benefits for home purchases? It seems like the US government is propping up this entire industry, rather than letting a free market operate.
1. While possible, loans where you put less than 20% down are tied to very high interest rates. Most people I know in the space avoid these or quickly refinance once the cash is available.
2. Commercial loans are difficult to get for an individual investor. If you're purchasing residential housing these aren't practical.
3. Banks interest rates are only tied to the federal interest rate.
2. Not really and honestly banks usually don't care if you pay in time.
3. Now I'm talking from experience as resident of some European country. When you are giving a loan to someone to purchase a property as a bank you are not loaning your own money. You loan this money usually from central bank and then "re-loan" it for higher interest to customer. Most of the mortgages in Europe are with fixed interest for some period therefore inflation doesn't really bothers you because bank loaned this money from central bank in times where you get the mortgage when interests were low.
Commercial loans are not typically used for things with 4 units or less, however they are required for non-residential builds and for multifamily >4 units.
You can use a cash -out refi on your primary and use those proceeds for a rental (but you'll need lots of equity).
One can also get non-commercial loans to buy rentals but the terms (eg LTV, rate) are steeper than for primary.
Banks can afford to give out loans that are less than inflation because they are creating money out of thin air to lend to you. Sure, the lent money is collateralized behind a property but it’s new money. It doesn’t really matter how much of a return they get as long as the return is higher than the default rate percentage and the return (after factoring in defaults) is positive.
There used to be restrictions like a 10% reserve ratio. But that’s been lifted in the US in 2020.
Big banks can also borrow money from the central bank to lend out. Current federal rate is 2.25%-2.5% and mortgages are about 5.9%. Thus banks keep the interest rate spread. Using those numbers, a $300,000 loan at a 30yr fixed rate is a bank product that will thus earn the bank $178,959.73 in interest. No wonder banks are the most wealthy class of businesses!
Edit: The ethics of this project are questionable, assisting real estate investors at the expense of first time home buyers (indicated by the heavy focus of this tool on optimizing profit through rental income) is not what our society needs at the current moment, in my opinion, as it reduces the pool of available homes for sale and forces our society further into separation between people catapulting their wealth and those who just want an affordable house to actually live in with their families while adding an asset to their net worth.
Efficient for whom? The person who has a one-off need for housing every few years? Or the person who already has the time, money, and connections to leverage money into bundling up more housing for themselves to loan out to that first group?
This also presumes that housing, at least primary residences, should be a market instead of a utility, which is not at all a given considering how the "market" is working out (or not) for a lot of people right now. Tools like this further increase that gap.
https://news.ycombinator.com/newsguidelines.html
Your comment also broke the Show HN guidelines - please see https://news.ycombinator.com/showhn.html
There are lots of grandmas who are engineers, scientists, doctors, and inventors. There are plenty of ways to land that message without carrying forward the spirit of 1950s Madison Ave. Plus, that copy doesn't tell anything about the product, it's fluff.
"Analyze deal potential without leaving Zillow"
"Automatically analyze rental properties as you browse"
"View critical deal metrics as you browse"
etc
And there are a 100x multiple of grandmas who are not any of those things.
Your virtue has been signaled. It’s just a figure of speech.