Kevin O’Leary: Unless you can pass this two-question test, don’t buy a home

“Mr. Wonderful” of Shark Tank mostly agrees with Your Professor.

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10 Responses to Kevin O’Leary: Unless you can pass this two-question test, don’t buy a home

  1. Mike February 21, 2018 at 5:19 pm #

    Renting is the #1 reason why I left Los Angeles.

    Renting is fine when during our teens and mid-twenties. Or if, for whatever reason; someone is not in a position to buy. Otherwise, life long renting is for fools.

    Ones marital status is inconsequential.

    The Real Estate Market is Prima Facie evidence of rigged collusion. Current Real Estate prices are artificial bunk. We already had a Real Estate bubble. During this time, housing supply was artificially high due to overbuilding. Now prices are back to bubble levels in a mere 9 years.

    During the bailouts, the banks got to keep the houses AND the bailout money. They are now holding houses on their books and off the market. This artificially inflates their balance sheets and props up landlord parasites.

    Fundamental economics begs the question: What does a house produce? Nothing. A house not a factory. It’s just four walls and a roof. A house is a dead asset. High rents transfer wealth from those who produce (workers) to those who don’t (parasites).

    So make sure you listen to Tom’s advice “boys”. Be good little slaves, keep renting.

  2. Michael February 28, 2018 at 10:21 pm #

    I agree It is totally rigged

  3. SJ March 14, 2018 at 11:35 pm #

    Well jobs are not stable anymore unless you own a business, independent wealthy, or have a government job so renting is better for most people. I’d rather have an emergency fund than spend that money on a down payment then be stuck if I ever lost my job and had to move.

  4. Bob March 21, 2018 at 8:48 am #

    I owned a house for 25 years, and after selling it for 4 times what I paid for it – after adding up the down payment, interest, maintenance, principal, property taxes, improvements I paid over the 25 years – I got all that money back and more. I lived rent free for 25 years.

    • SJ March 25, 2018 at 5:54 pm #

      Well you were VERY lucky to buy at a time when real estate prices were not inflated assets. Now buying a home is pure insanity unless you are filthy rich or have a secure job.

      • Tom Leykis March 26, 2018 at 10:40 am #

        Luck had NOTHING to do with it. Hard work, devotion to saving, and due diligence DID.

        • Anthony DeHart October 26, 2018 at 3:46 am #

          I bought a house in 1986 for 54,000 and sold it in 2002 for 249,900 then bought my 2nd house in 2003 for 105,000 and sold it for 220,000 in 2007 and in 2009 at the start of the recession I bought a foreclosed 4bd 2600 sq.ft home and worked the bank like a used car lot and bought it for 137.000 and currently it’s worth 680,000 granted I live in Bend Oregon and live where you vacation but thanks to my real estate dealings and some light work I did myself on my homes I’ve made over 3/4s of a million dollars in 30 years and pay under a thousand dollars a month for my house payment included taxes and insurance in a town where a 2bd Rm apt rents for 1600 to 1800 a month SORRY TOM I MUST DISAGREE RENTING KEEPS YOU IN POVERTY. My current interest rate is 3.4% and I went back over the road driving Long haul and rent a room for 1000.00 a month and my house is watched after and my house payment is made. The Kayaker

      • Bob April 6, 2018 at 10:24 am #

        Well, you do need a secure job to keep a home for 25 years, although I had been laid off once and had to struggle to find a new job. But the main factor is that no matter when you buy a house, if you keep it long enough (like 25 years), you will pass through all the ups and downs of the real-estate market and certainly end up higher at the end than at the beginning. Just make sure keep up the payments and don’t get foreclosed on. Same with the stock market over that long a period of time, after 25 years it’s probably going to be a lot higher no matter when you got in.

  5. Wayne flores April 13, 2018 at 5:41 am #

    Kevin o Leary is someone who as inspired me a lot. And yes I have seen a lot of people who don’t buy house although they could for whatever reasons.

  6. Michel February 7, 2019 at 11:16 am #

    I’m began my divorce in Los Angeles in 2008, took 4 yrs to sell the marital home… lost 5 other properties to bad market between 2008-2013 because of unreasonable ex, but ended up with about $330,000 while the ex got only $100,000 cuz she filed for BK in 2013 and had a homestead exemption. Anyway, I had to rent, and I had to wait until 2016 and to invest my money by buying an 8 units appt complex in Bakersfield (1.5hr from LA) More affordable than buying anything in LA, pulling now $825 each so $6600 per month. I rent a 1 bedroom in Sherman Oaks for $1400, and I have to rent storage from my tools and extra car at $600/month. I don’t pay for water, trash, and hot water or GAS….it’s paid by the owner. No property tax, not maintenance, no gardener….etc…I only have electric bill, at $35-50/m.

    So I Had to get a shark loan at 11% for 2yrs until I was able to refi at 5.25% about 6months ago. Now I net about $4000/month

    If I bought a house in the valley in 2016 or before…. I would be house rich, but cash poor and still be struggling to make house payment every month….. and have no residual monthly income like with the 8 units I have,

    A house $750,000 would cost me about $2500/m payments, $785/m prop taxes, $350/m Power and Water, $50 gas, ++Maintenance $$$??? so Prob around $4,200 per month…and have no cash in my pocket.

    I bought the 8 unit building in 2016 for $490,000. Put $130,000 down and invested $40,000 to renovate it because I knew this would bring me money…but a house would NOT. I refinanced and got $30,000 out and it is now worth $750,000.

    I gained About $230,000 in equity, and I make $4,000 per month. If I bought a house, I would have no money in my pocket, and be forced and stressed out to make $4,200 payment every month, would have to work like a mad man…. I dislocated my shoulder 2 months ago…cant work for about 4-6 month. I would have lost my house, and most of the money I had invested in the house…

    But with the 8 units, I get $4,000 per month even if I don’t work…. it cover my appartment expenses.

    Buying a house is not always the smartest choice…. in my case it’s better to rent, grab my money and invest it…cuz it makes me money while I sleep…. a house does not!… it always says : “gimme gimme”…like buying a boat!

    Think about it!!! (like the kids from Brooklyn would say)

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