Haha, wherever I go my soon-to-be-wife will be coming along We're both DIYers-when stuff crops up we can fix it, short of well/ septic problems.

120k will buy you a row house in the rougher parts of town. No parking, police cameras on the corners, etc. The properties I've been eyeballing on Zillow are around 300k. A few have had the garage-with-apartment arrangement, but I'm not going to count on income from renting anything out (it would be nice, but I'm not going to count on it).


I'm well aware of the random crop-ups. Right now the pressing car emergency is a new rear end in the Jeep. Some snap overseer after dodging a Baltimore driver recalibrated the axle tube's alignment by oh 3" or so. I know which car I'll be under in the abandoned parking lot this weekend

__________________
$60 OM617 Blank Exhaust Flanges
$110 OM606 Blank Exhaust Flanges
No merc at the moment

Buy a duplex. Live in one and rent out the other.

__________________
1977 300d 70k--sold 08
1985 300TD 185k+
1984 307d 126k--sold 8/03
1985 409d 65k--sold 06
1984 300SD 315k--daughter's car
1979 300SD 122k--sold 2/11
1999 Fuso FG Expedition Camper
1993 GMC Sierra 6.5 TD 4x4
1982 Bluebird Wanderlodge CAT 3208--Sold 2/13

No, but his spirit has moved me.

You and I have differing POV....

My rental is providing an income and increasing in value. The ROI is quite favorable, especially in light of the sweat equity which I have put into it.

My primary residence, purchased at fire sale price, will continue to grow my investment and save me money on a monthly basis over rental of equivalent housing.

People who expect to lose or do lose money selling their houses are spdrun's favorites...

__________________
On some nights I still believe that a car with the fuel gauge on empty can run about fifty more miles if you have the right music very loud on the radio. - HST

1983 300SD - 305000
1984 Toyota Landcruiser - 190000
1994 GMC Jimmy - 203000

https://media.giphy.com/media/X3nnss8PAj5aU/giphy.gif

I was going to suggest this too. I started out this way. I bought a huge historic home and built a really nice one bedroom apartment in it for about $10K and rented it for enough to pay half the mortgage. When times got tough I moved my Architectural office into it, then later refinanced it to buy my first office building.

__________________
[SIGPIC] Diesel loving autocrossing grandpa Architect. 08 Dodge 3/4 ton with Cummins & six speed; I have had about 35 benzes. I have a 39 Studebaker Coupe Express pickup in which I have had installed a 617 turbo and a five speed manual.[SIGPIC]

..I also have a 427 Cobra replica with an aluminum chassis.

On average, yes, it is a bad idea to raid your retirement funds as "a young un," as a down payment on a home.

Homes as your personal residence are a lousy place to try and build wealth - especially the extravagant ones many people seem intent on. Homes are net net costs to you. Between the loss of use of capital, TAXES each and every year, insurance, heating/cooling costs, mortgage interest, maintenance costs, they are just not all that many people seem to think they are. The funds in your retirement account are most valuable when they are undisturbed for several decades building wealth for your retirement years.

When I was a young guy, I took $31,000.00 from my investment account (not retirement account) to put down on my home. The $31,000.00 had I left it where it was invested, would have grown to $1,395,000.00 today, all with NO tax-event, or tending whatsoever. For anyone paying attention, that's a multiplying factor of 45 times, or 4,500%. The $31K put in the low-appreciating home - is worth $35K today. Anyone here had their personal residence multiplying by a factor of X 45, or even close to that factor in 30 years? I seriously would doubt it.

What you do with a dollar today, has dramatic results over 25 to 40+ years with what it can do for you. Get the money from any place but your retirement account is my advice - if, you even need to buy a home. I've never disturbed my various IRAs in almost 40 years of opening and contributing to them. I still contribute the maximum every year to them while I'm still working.

__________________
'06 E320 CDI
'17 Corvette Stingray Vert

If you purchase in such a way as to lower your monthly expense, and contribute that savings back to your retirement fund, then you will be better off.

All it takes is discipline. YMMV.

__________________
On some nights I still believe that a car with the fuel gauge on empty can run about fifty more miles if you have the right music very loud on the radio. - HST

1983 300SD - 305000
1984 Toyota Landcruiser - 190000
1994 GMC Jimmy - 203000

https://media.giphy.com/media/X3nnss8PAj5aU/giphy.gif

I am never in favor of tapping retirement funds. Apart from negative short term tax consequences, by withdrawing and spending your retirement funds now you are forever foregoing all the growth and income that investment would return for the rest of your life. Before you pull it out, find an online financial calculator to estimate what you are giving up. Figure what you have now grows and reinvests all income for the next 40 years, then what that nest egg will throw off. I think you'll be surprised at the magnitude of what you would be giving up.

I would suggest a completely different direction - get out of MD to a lower cost, lower tax location. Think sunbelt city with a strong economy and inexpensive housing. By doing so you may be able to afford a home without tapping retirement funds and also have enough free cash flow to build an investment portfolio.

Nothing against real estate as an investment. However, putting all your funds into your personal home represents a total lack of diversification, and hence the assumption of huge amounts of risk. Basically, you're betting that Baltimore will become a desirable enough place to live that housing prices will increase. Think hard about making that bet.

Hindsight is 20/20. If you had put it in the wrong stocks, you could have been blown out, or if you have put it in the right home (say one on Capitol Hill, DC that was da getto-oh 30 years ago), you might have gained just as much.

Real question is, since a lot of margin loans don't show up on your credit report, why didn't you just take a margin loan or secured line of credit against at least some of the stocks?

I was citing a real example - not theory or what ifs, as some here are doing. Rosey projections are just that - theory.

__________________
'06 E320 CDI
'17 Corvette Stingray Vert

So was I, guy -- some real estate has vastly changed in value since the 80s. I know someone whose father bought a house near the Pratt Institute in Brooklyn for $100k (so about $25k down) in the early 80s. It's now worth over $1MM. Similarly, I personally know someone who did the same in southeastern DC near the Marine barracks.

The house that my family had at the Jersey Shore was picked up for about half that amount in the 80s, and is easily worth $500k today.

I like it! Totally accurate in my case, CJLipps!

__________________
'06 E320 CDI
'17 Corvette Stingray Vert

Since this is your shining example of property being a good investment let's compare:
If you had placed that same $100K into the S&P 500 in 1983 you would have $1.02MM today without taking into account reinvested dividends. Taking those into account you would have over $2.12MM. And this is without having to pay insurance, upkeep, mortgage interest and property taxes all the while. (You would, of course pay income tax depending on the investment vehicle.) Let's not even consider the liquidity factor because when you need money and all you have is a house...
Nope, houses aren't investments. Not good ones anyway.

__________________
1983 M-B 240D-Gone too.
1976 M-B 300D-Departed.

"Good" is the worst enemy of "Great".

I'm not talking about paying cash for a $100k house...

You'd have placed $20k or $25k into the house -- downpayment for a $75-80k mortgage. Not too many brokerage houses offering 4x margin unless it's for a pattern daytrader account (did those exist back in 1985?).

Assuming you bought well, the expenses on the house would have been less than the rent that a landlord would charge for the same, thus paying a "dividend" in the form of increased income. So, you'd have made 40x your initial outlay plus whatever you saved from not renting. Partially tax-free, I may add.

Can you simply stop putting money into your retirement account and put it in a savings account (with the intent of using it for a down payment) or knock back your monthly contributions to your employer's match rate if applicable? Stash everything else away?

I can understand wanting to keep with the 401k, I invested heavily when the recession hit and the growth of that money has been remarkable. So I stopped contributing at the moment and I'm putting everything away towards a downpayment (hence my car sell-off). I'm in the same boat with renting prices--although I'm living with a friend who is charging me very little at the moment. Hard to find anything nice under 300k in my immediate area. I just don't see the logic in taking out that money at an exorbitant tax rate.

__________________
TC
Current stable:
- 2004 Mazda RALLYWANKEL
- 2007 Saturn sky redline
- 2004 Explorer...under surgery.

Past: 135i, GTI, 300E, 300SD, 300SD, Stealth