Thread by @iam_balaji

#personalfinance #Debt #Realestate Thread on my experiences with real estate as a primary home and investment -
Always dreamt of living in a bigger house as I had spent the better part of my life till My late twenties in a 250 sq ft rented house in mumbai
1/

Bought my 1st house in 2001 a 3 bed apartment 1395 in a good locality in Hiranandani - in Thane - with the power of leverage - got 100% of property value + stamp duty + registration and insurance term cover for loan amount fully funded by HDFC - did not have to invest a pie 2/

Power of a branded property to get this level of leverage - and also loan to CTC at that point was 500% - but did not seem risky as asset backed the liability (cant say the same in today’s times) Got possession in 2006 and moved in ( got married too a year prior) - 3/

HDFC offered me a step up EMI - with a 15% increase signed in for 1st 3 years - so worked well for me - EMI to net take home was a high 55% with a Maruti car EMI to boot + a Next conundrum was le to liya ab furnish kaise karen - this big a house (compared to my 250sq ft ) 4/

So decided to start 1 room at a time - salary had hiked decently from 2001 to 2006 - but thought of leveraging they credit cards now - cracked the code of balance transfer which then was available at 0% for 90 days with a 200 Rs processing fees - tried if it works with 5/

Small amount - once POC was established furnished kitchen with Amex - day 90 shifted the dues after 2 months of min Balance to ICICI - day 180 shifted the same to SBI - and paid the same off on Day 270 - Day 100 did the same with card 1 for the bedroom - and rotated 3 cycles 6/

Day 200 started the same for the bedroom and finally say 300 my dream media room - all this while monthly savings went into mutual funds sip’s strictly and the corpus liquidated on due dates of the final card due date and repaid with 0 % interest 7/

Whole process of gaming the system gave me a huge kick and markets were also kind with sip returns funding one room (so money actually saved) end of two years had a fully furnished house - without additional debt. 8/

Next one - a mistake decided to change for a bigger car with a top on home loan - And this story kept on continuing. Come 2010 decided to buy a house for parents too - base property had significantly appreciated - so another top up funded the 20% down payment and stamps duty 9/

And in came another loan for the balance 80% - grew well in career too to manage the neck deep emi’s - for two houses and a car - all on mortgage - tragedy struck in a matter of 3 weeks in 2011 lost dad and my bro in law just couple of years elder 2 cancer. Was a huge reality 10/

Check for me as I was fiscally responsible for 3 families now - full credit to bro in law 2 leave my sis financially stable,I was only to manage it -but opened my eyes to lot of realities -first took a large term cover - personal medical cover -sold second home after 11/

Dad passed and cleared housing loan - and cleared base loan aggressively in next couple of years - became debt free - except for car loans - then 2015 invested in another property - 3rd one thinking real estate bottomed out, - wrong move - finally in 2020 cleared this real 12/

Estate debt too and became debt free again - so long story short - made many mistakes in life but was never short of experiences and tried to learn from most of the mistakes - transformed from an aggressively leveraged guy in the previous decade (which I still believe was the 13/

Need of the hour then) to a zero debt guy now - adapted and changed - happy with all the experiences specially building the 1st one from scratch - still live there now - thanks @FI_InvestIndia for egging me to write about my experiences ! Do read and share if interesting !