Mortgage Arbitrage - What Are the Tactics?

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For mortgage arbitrage to work, you need the long term aggregate investment performance to be at least as good as or better than your mortgage rate. One possible tactic is to set that return as the minimum amount that you need to amass in a given year and then any surplus beyond that is what you're willing to harvest. That's one suggested possible tactic. Another would be to approach it in the same way that a retiree does, where you set a annual draw down number, like three %, or perhaps even two% for taxable brokerage account every year.

#354: Charlie in Cali has enough money saved to pay cash for a house, but she and her husband decided to finance their home, instead. They’d rather invest the money and arbitrage the spread. But one problem: how can they keep themselves from touching this investment?

Jay is choosing between Fidelity and M1 Finance, and has questions about tax loss harvesting.

Nicole and her siblings will be inheriting some properties that they eventually plan to sell. How should they set up or organize these properties among so many owners? Should one person take the lead? Do they need a shared business account? Also, how should they evaluate a property and make sure they get a good deal when they sell?

Ed owns three homes, two of which he plans to sell in the next few years. He plans to live in them long enough to establish residence and take the capital gains exemption when they sell. Is his plan for handling the taxes solid?

We answer these four questions in today’s episode. Enjoy!

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