Home Loans Q's

[kbrown]

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😱 Some people on the forum have mentioned that they used www.physicianloans.com, Bank of America, SunTrust and other institutions to get home loans. Anyone willing to comment???

I have no money saved b/c I am a poor medical student, but I am very leary of a no-money down loan. I have heard bad things about how you will get your a** handed to you in the long run. I don't really understand enough about the real estate market, money, etc.. to wrap my brain around this crap. Has anyone used any of the above (or someone else) that can shed some light on this situation?

Thankin' you,

 

[USAF MD '05]

BOA- Morgagesforphysicians.com. I got a sweet deal, and David is great to work with.

Steve

 

[USAF MD '05]

BOA- Morgagesforphysicians.com. I got a sweet deal, and David is great to work with.

Steve

I mean mortgagesforphysicians.com 🙂

 

[penguins]

The Bank of America guy is by far the nicest and most straight-forward person I have talked to yet. I am in a state that can't get their doc loans but I sure wish I could use him anyway!
Call him!

 

[st0rmin]

😱 Some people on the forum have mentioned that they used www.physicianloans.com, Bank of America, SunTrust and other institutions to get home loans. Anyone willing to comment???

I have no money saved b/c I am a poor medical student, but I am very leary of a no-money down loan. I have heard bad things about how you will get your a** handed to you in the long run. I don't really understand enough about the real estate market, money, etc.. to wrap my brain around this crap. Has anyone used any of the above (or someone else) that can shed some light on this situation?

Thankin' you,

I would agree that David with Bank of America has been great to work with. I would recommend him (336-721-4141).

 

[edmadison]

😱 Some people on the forum have mentioned that they used www.physicianloans.com, Bank of America, SunTrust and other institutions to get home loans. Anyone willing to comment???

I have no money saved b/c I am a poor medical student, but I am very leary of a no-money down loan. I have heard bad things about how you will get your a** handed to you in the long run. I don't really understand enough about the real estate market, money, etc.. to wrap my brain around this crap. Has anyone used any of the above (or someone else) that can shed some light on this situation?

Thankin' you,

You need to invest some time in educating yourself. You should never enter into any business deal unless you understand it on some basic deal. Find a good bock on the subject (You might consider "house smart" by Bruce Williams). Also, once you're close to buying, you really should get an attorney to represent you for the sale (not the bank's attorney).

Ed

 

[timtye78]

My first home buying experience was pleasant b/c I spent a little time educating myself and shopping for a mortgage just like shopping for anything else important:
(this is absolutely true)

1.bought a cheapo 'buying your first home' book for 99 cents paperback at used bookstore-took about 1 night on call to read most
2.went to 1)local mortgage company
2)lendingtree.com
3)physician loans dot com
3. Told everyone that I was buying a house with $1000 available and I was going to pick the best offer I had by certain date. Seriously, I kept playing them against each other and showing each one written estimates, and eventually wrangled a deal for myself that the title officer at my closing said
"wow, how did you arrange this sweet of deal with nothing down?"
4. End result: Received TWO checks at closing, locked in a low 6.0 fixed rate for thirty years, zero down, and had the sellers pay 100% of closing costs. Live in a desirable area and judging by houses for sale in my neighborhood now, I may have already made 15K in value in 8 months.

I say all this to say it is money in your pocket to know the basic lingo, play hardball with the lenders and make them compete to get your business. I would be happy to answer any questions about my experiences.

 

[Plastikos]

I would love to hear a more detailed account of how you wrangled the deal with the multiple companies.

 

[pgg]

I have no money saved b/c I am a poor medical student, but I am very leary of a no-money down loan. I have heard bad things about how you will get your a** handed to you in the long run. I don't really understand enough about the real estate market, money, etc.. to wrap my brain around this crap. Has anyone used any of the above (or someone else) that can shed some light on this situation?

Here's my free advice, so take it as seriously as the price you paid for it. 🙂 Consider renting for the next few years.

First, you are wise to be skeptical of today's popular loans designed to help people "afford" expensive houses on low salaries with nothing down. They rarely make financial sense to anyone except the broker who gets a nice commission up front.

Second, most objective observers of the US housing market today believe that most homes in most markets are overvalued, and that some correction is imminent. (Areas away from the east or west coast appear to be less overvalued.) When that happens, people who put nothing down will be underwater on their homes, and unable to sell without bringing their checkbooks to closing. You probably don't want to exit residency training with $xxx,xxx of student loan debt, an empty savings account, and a house that's worth xx% less than what you paid for it.


Consider renting while you're a resident. Let the real estate market fall out of the stratosphere, and by the time you're an attending making great money you'll be in a fantastic position to buy a house during the next dip in the cycle.


We're going to sell our house next month for an absurd profit, park that money in some reasonably safe short-term investments, and rent for the 3 years I'll be a resident. Even though we'd have a large down payment in hand and could afford an expensive home, we're not going to bite in this market.

There are plenty of web sites out there that are full of information and advice on the current status of real estate in this country. Ignore anyone who's a real estate agent or mortgage broker; they work on (large) commissions and will lie to you. If you don't buy, they don't get paid. They might tell you real estate only goes up, or that prices might "only" go up 10% this year, or that you'd better buy now now NOW lest you be left behind, or that their nothing-down stated-income interest-only negative-amortization loan is "good" for you, or that they'll work some "special" deal just for you because you're a doctor and doctors are special.

Take the time to educate yourself, and do an honest assessment of what would likely happen to you if you bought a house with 100% financing and that property depreciated even a little bit. (Remember that it'll end up costing you 5-7% to sell it, too.)

I'm not a doomsday predictor who's buying gold bars, guns, ammo, and canned food for my bomb shelter ... but I'm also not buying a house this year. I believe people buying houses today are like people who bought tech stocks in 2000. A bubble is a bubble, we've been here before, and it's no different this time around.

Inventory is already up 500% in the San Diego area compared to this time last year. The correction is happening there; other areas will follow. Don't buy at the top.

JMHO.

 

[deleted50478]

Wow. You just cancelled out all the shameless free advertising above. Somebody had better start a new mortgage thread to help David at B of A get rich.

 

[Plastikos]

Here's my free advice, so take it as seriously as the price you paid for it. 🙂 Consider renting for the next few years.

First, you are wise to be skeptical of today's popular loans designed to help people "afford" expensive houses on low salaries with nothing down. They rarely make financial sense to anyone except the broker who gets a nice commission up front.

Second, most objective observers of the US housing market today believe that most homes in most markets are overvalued, and that some correction is imminent. (Areas away from the east or west coast appear to be less overvalued.) When that happens, people who put nothing down will be underwater on their homes, and unable to sell without bringing their checkbooks to closing. You probably don't want to exit residency training with $xxx,xxx of student loan debt, an empty savings account, and a house that's worth xx% less than what you paid for it.


Consider renting while you're a resident. Let the real estate market fall out of the stratosphere, and by the time you're an attending making great money you'll be in a fantastic position to buy a house during the next dip in the cycle.


We're going to sell our house next month for an absurd profit, park that money in some reasonably safe short-term investments, and rent for the 3 years I'll be a resident. Even though we'd have a large down payment in hand and could afford an expensive home, we're not going to bite in this market.

There are plenty of web sites out there that are full of information and advice on the current status of real estate in this country. Ignore anyone who's a real estate agent or mortgage broker; they work on (large) commissions and will lie to you. If you don't buy, they don't get paid. They might tell you real estate only goes up, or that prices might "only" go up 10% this year, or that you'd better buy now now NOW lest you be left behind, or that their nothing-down stated-income interest-only negative-amortization loan is "good" for you, or that they'll work some "special" deal just for you because you're a doctor and doctors are special.

Take the time to educate yourself, and do an honest assessment of what would likely happen to you if you bought a house with 100% financing and that property depreciated even a little bit. (Remember that it'll end up costing you 5-7% to sell it, too.)

I'm not a doomsday predictor who's buying gold bars, guns, ammo, and canned food for my bomb shelter ... but I'm also not buying a house this year. I believe people buying houses today are like people who bought tech stocks in 2000. A bubble is a bubble, we've been here before, and it's no different this time around.

Inventory is already up 500% in the San Diego area compared to this time last year. The correction is happening there; other areas will follow. Don't buy at the top.

JMHO.

I dont know, its not like you have to liquidate the house when residency is over, especially since many people stay in the same area afterwards. There are other benefits to buying a house also. You also dont have to buy a crazy house, and if i stay here no way would i buy a house, never buy at the top.

I also had different views on where houses are over priced, which i believe is the coasts. Homes have been astronomical here in LA and have finally started dropping some. Keep in mind though, its not like a correction is going to drop the house prices to 50% of current values, its usually around 10-20% and never permanent. My only fear about buying houses not on the coasts is the possibility of the value not appreciating.

 

[Ergo]

I dont know, its not like you have to liquidate the house when residency is over, especially since many people stay in the same area afterwards. There are other benefits to buying a house also. You also dont have to buy a crazy house, and if i stay here no way would i buy a house, never buy at the top.

I also had different views on where houses are over priced, which i believe is the coasts. Homes have been astronomical here in LA and have finally started dropping some. Keep in mind though, its not like a correction is going to drop the house prices to 50% of current values, its usually around 10-20% and never permanent. My only fear about buying houses not on the coasts is the possibility of the value not appreciating.

In the areas not on the coasts, the homes have been slowly, steadily appreciating at a rate greater than the inflation rate for nearly every 5 year period you consider. (a one year stall out in some area is negated over a five year span.) For someone going into a surgical residency, committed for 6 years or more it seems that a home (not on the coasts) makes financial sense in comparison to renting. Even if the home only appreciates at the rate of inflation, the deductions sum up to a significant financial gain, right?

So, since Im looking at a 5-7 year residency Im buying unless I end up in Palo Alto, Boston, or Newark.

 

[CameronFrye]

In the areas not on the coasts, the homes have been slowly, steadily appreciating at a rate greater than the inflation rate for nearly every 5 year period you consider. (a one year stall out in some area is negated over a five year span.) For someone going into a surgical residency, committed for 6 years or more it seems that a home (not on the coasts) makes financial sense in comparison to renting. Even if the home only appreciates at the rate of inflation, the deductions sum up to a significant financial gain, right?

So, since Im looking at a 5-7 year residency Im buying unless I end up in Palo Alto, Boston, or Newark.

Yeah, I think owning makes sense for people in longer residencies. Historically, 5 years is the amount of time needed for owning to beat renting. The time period has been shorter over the past few years, but with the market softening, I wouldn't be rushing out to buy something if I were starting a 3-year residency.

 

[corpsmanUP]

Yeah, I think owning makes sense for people in longer residencies. Historically, 5 years is the amount of time needed for owning to beat renting. The time period has been shorter over the past few years, but with the market softening, I wouldn't be rushing out to buy something if I were starting a 3-year residency.

Its more like 3 years for breaking even versus renting. I lived in two houses for 4 years each, and am selling my current home for 30% more than I paid 4 years ago. I live in the middle of the country...nothing special geographically.

 

[pgg]

Even if the home only appreciates at the rate of inflation, the deductions sum up to a significant financial gain, right?

That's just it though. Like so many people the last few years, you're making the implicit assumption that some appreciation is a sure thing. Homes in most areas are not going to appreciate at all in the next few years; those in overvalued areas (just about every place within 100 miles of the ocean, minus the gulf coast) are going to depreciate. Don't forget to add in the transaction losses - commissions and closing costs, especially on the selling end, are significant.

I'm not a psychic, I'm not a time traveler who can see the future. But history will teach anyone who cares to look at it that real estate cycles come and go, and every single time the people buying around the peak are doing it because
- they think real estate never goes down
- they're afraid if they don't buy now they'll be forever priced out of the market
- they think "this time it's different"

It took people who bought at the last peak about 15 years to break even.

 

[pgg]

Keep in mind though, its not like a correction is going to drop the house prices to 50% of current values, its usually around 10-20% and never permanent.

50% is unlikely, but some areas have seen 40% drops in previous cycles. San Diego and DC/MD/Northern VA sure seem headed that way. 🙁

And you're right, it is never permanent, but that doesn't mean it can't be painful in the interim. My parents bought two rental homes as investments in the Phoenix area in the mid/late 80s. They watched them depreciate for year after year, stagnate on the flat part of the curve for a while longer, and then slowly begin to regain the lost ground. Yes, they came out ahead in the long run. The very long run (10+ years later).

Only in the real estate industry could a slump that lasted 10 years be held up as proof that real estate only goes up. 🙄

As physicians, we'll all have relatively high incomes to pull ourselves out of holes; I'm not suggesting that anyone who buys now will be hopelessly screwed and headed for a loan default and bankruptcy. But I'd like to think that most people, even us rich doctor types, would like to avoid even small holes in the first place. 🙂

Anyone who does buy now simply must go in aware that real estate does depreciate, and have a plan for how they might cope with 3 or 6 or 9 years of losses and/or stagnation - it's not unprecedented, and every objective measure of today's market is pointed in that direction.

 

[Plastikos]

50% is unlikely, but some areas have seen 40% drops in previous cycles. San Diego and DC/MD/Northern VA sure seem headed that way. 🙁

And you're right, it is never permanent, but that doesn't mean it can't be painful in the interim. My parents bought two rental homes as investments in the Phoenix area in the mid/late 80s. They watched them depreciate for year after year, stagnate on the flat part of the curve for a while longer, and then slowly begin to regain the lost ground. Yes, they came out ahead in the long run. The very long run (10+ years later).

Only in the real estate industry could a slump that lasted 10 years be held up as proof that real estate only goes up. 🙄

As physicians, we'll all have relatively high incomes to pull ourselves out of holes; I'm not suggesting that anyone who buys now will be hopelessly screwed and headed for a loan default and bankruptcy. But I'd like to think that most people, even us rich doctor types, would like to avoid even small holes in the first place. 🙂

Anyone who does buy now simply must go in aware that real estate does depreciate, and have a plan for how they might cope with 3 or 6 or 9 years of losses and/or stagnation - it's not unprecedented, and every objective measure of today's market is pointed in that direction.

I've never heard of anything that drastic, 30% is the upper i have heard, 40% would be great for us, might send the rest of the country into a recession though.
I guess i should mention that i am going for residencies that are 5-7 years in length. I dont think i would buy a house for a 3 year residency unless it was the city i wanted to settle in.

 

[penguins]

There is also the simple stuff to think of as well. If you are single and busy with residency you aren't going to want to take the time to mow the lawn, call and wait for the plumber, weed the garden or deal with termites. Sometimes the money you would make on the house in a few years (maybe) just isn't worth the headache it has caused you in the meantime.
If, on the other hand, you have a family or are a "nester" type like me who wants to paint the kitchen purple and finds pulling weeds therapeutic, it is worth even the possible financial loss if the home does not appreciate in the 3 or 4 years of residency.
Renting has very little responsibility and keeping up with a home takes a lot, especially keeping in mind the time when you are reselling for that possible profit and it needs to have been kept up.

Just a thought, possible profit or loss can be measured in more ways than market trends.

 

[CameronFrye]

There is also the simple stuff to think of as well. If you are single and busy with residency you aren't going to want to take the time to mow the lawn, call and wait for the plumber, weed the garden or deal with termites. Sometimes the money you would make on the house in a few years (maybe) just isn't worth the headache it has caused you in the meantime.
If, on the other hand, you have a family or are a "nester" type like me who wants to paint the kitchen purple and finds pulling weeds therapeutic, it is worth even the possible financial loss if the home does not appreciate in the 3 or 4 years of residency.
Renting has very little responsibility and keeping up with a home takes a lot, especially keeping in mind the time when you are reselling for that possible profit and it needs to have been kept up.

Just a thought, possible profit or loss can be measured in more ways than market trends.

Exactly. If you want to own a home, go for it, but I would caution against buying a place just for perceived financial gain. And like you said, you have to think about the little things. One of my intern friends who bought a house absolutely hates having to spend his precious days off mowing the lawn. Of course, you can purchase a condo and pay your association dues, but condos tend to appreciate at a slower rate than houses.

Real estate is just like the stock market. Over decades, it has always gone up, but over a decade prices can really flatten out or depreciate.

 

[CameronFrye]

Its more like 3 years for breaking even versus renting. I lived in two houses for 4 years each, and am selling my current home for 30% more than I paid 4 years ago. I live in the middle of the country...nothing special geographically.

Like I said, over the past decade that has been true, but not necessarily over the last century. I've had friends in grad school who bought a place for just two years before reselling and they made a killing. That doesn't mean you should always expect that.

The analysis of renting vs. owning is not very straightforward. You have to consider closing costs, maintenance time and costs, personal property taxes, tax deductions, insurance, etc. Also, if you overextend yourself to buy (and furnish) a house and then don't have money left over for tax-favorable retirement accounts, that's an extra cost to consider. Over time, owning beats renting b/c of the effects of inflation (your mortgage costs remain stable, while rents continue to raise).

 

[Plastikos]

Exactly. If you want to own a home, go for it, but I would caution against buying a place just for perceived financial gain. And like you said, you have to think about the little things. One of my intern friends who bought a house absolutely hates having to spend his precious days off mowing the lawn. Of course, you can purchase a condo and pay your association dues, but condos tend to appreciate at a slower rate than houses.

Real estate is just like the stock market. Over decades, it has always gone up, but over a decade prices can really flatten out or depreciate.

Personal situation definitely makes a difference. I have two kids that im tired of feeling guilty about keeping them cooped up in an apartment. Also, i could probably get my kids to do some of the yardwork, lol, and i enjoy a bit of housework myself.

Buying a house solely for percieved financial gain is something i will wait to do when i have more income. Though there are benefits if your not buying in a super hot market, which is where the most drastic corrections occur. If your not in those areas, you many be affected slightly or not at all.

 

[CameronFrye]

Personal situation definitely makes a difference. I have two kids that im tired of feeling guilty about keeping them cooped up in an apartment. Also, i could probably get my kids to do some of the yardwork, lol, and i enjoy a bit of housework myself.

Buying a house solely for percieved financial gain is something i will wait to do when i have more income. Though there are benefits if your not buying in a super hot market, which is where the most drastic corrections occur. If your not in those areas, you many be affected slightly or not at all.

Yeah, if I had a wife and kids, I would definitely buy (if at all feasible). Even with my qualms with the current market, I may still buy depending on where I match (and the likelihood I would want to stay at that place for fellowship).

 

[3dtp]

Like I said, over the past decade that has been true, but not necessarily over the last century. I've had friends in grad school who bought a place for just two years before reselling and they made a killing. That doesn't mean you should always expect that.

The analysis of renting vs. owning is not very straightforward. You have to consider closing costs, maintenance time and costs, personal property taxes, tax deductions, insurance, etc. Also, if you overextend yourself to buy (and furnish) a house and then don't have money left over for tax-favorable retirement accounts, that's an extra cost to consider. Over time, owning beats renting b/c of the effects of inflation (your mortgage costs remain stable, while rents continue to raise).

This may or may not be true. Many people have purchased houses on risky mortgage types. Interest rates have been at historical lows and are now returning to a more normal level. Energy prices, for who knows what reason outside of the avarice of the not so recently re-merged major oil companies have doubled to trippled in the past few years. This affects everything that needs to move from a producer to a market and we are seeing that in significantly increased grocery prices.

Since many houses are purchased on little money down, variable rate mortgages, as short and long term interest rates begin to rise, those with ARM's coming due will see dramatic mortgage payment increases. I doubt property taxes will go down when housing sales prices are adjusted to reflect the higher monthly payment / thousand, so unless you can get a reasonable rate that is fixed or controllable for the period you plan to own the house, the mortgage interest rate could go up significantly and your payment along with it. This is a double edged sword. It could significantly increase your monthly cash outlay, and, the absence of easy, cheap mortgage money in the face of fundamental increases in essential commoditites will make less money available for house payments. Your neighbors who bought at the top and got no money down, interest only loans, are now screwed, since there is no further appreciation in house prices, and perhaps even a dip. Prices have dropped significantly in Boca Raton, recently. They did the same in California and Boston about 20 years ago, and throughout the country people were sitting on unsold property because there was no market at the asking prices.

Know the market, find out what the actual selling prices and trends are and bid wisely. Be prepared to rent. I did a spent a year elsewhere and ended up renting a palace for about the same as it would have cost me to buy it, after all taxes, repairs and maintenance and other considerations were taken into account. Be prudent in signing a mortgage and make sure you look at and assume that in the worst case on adjustables that you'll be able to keep you head above water.

 

[CameronFrye]

This may or may not be true. Many people have purchased houses on risky mortgage types. Interest rates have been at historical lows and are now returning to a more normal level. Energy prices, for who knows what reason outside of the avarice of the not so recently re-merged major oil companies have doubled to trippled in the past few years. This affects everything that needs to move from a producer to a market and we are seeing that in significantly increased grocery prices.

Since many houses are purchased on little money down, variable rate mortgages, as short and long term interest rates begin to rise, those with ARM's coming due will see dramatic mortgage payment increases. I doubt property taxes will go down when housing sales prices are adjusted to reflect the higher monthly payment / thousand, so unless you can get a reasonable rate that is fixed or controllable for the period you plan to own the house, the mortgage interest rate could go up significantly and your payment along with it. This is a double edged sword. It could significantly increase your monthly cash outlay, and, the absence of easy, cheap mortgage money in the face of fundamental increases in essential commoditites will make less money available for house payments. Your neighbors who bought at the top and got no money down, interest only loans, are now screwed, since there is no further appreciation in house prices, and perhaps even a dip. Prices have dropped significantly in Boca Raton, recently. They did the same in California and Boston about 20 years ago, and throughout the country people were sitting on unsold property because there was no market at the asking prices.

Know the market, find out what the actual selling prices and trends are and bid wisely. Be prepared to rent. I did a spent a year elsewhere and ended up renting a palace for about the same as it would have cost me to buy it, after all taxes, repairs and maintenance and other considerations were taken into account. Be prudent in signing a mortgage and make sure you look at and assume that in the worst case on adjustables that you'll be able to keep you head above water.

I can't disagree with anything you said. While ARMs and interest-only mortgages have been good plays over the past decade (for residents only sticking around for a short time), they are becoming significantly more risky. Basically, if you're buying now, it's probably time to return to the traditional rules of buying real estate.

 

[Plastikos]

This may or may not be true. Many people have purchased houses on risky mortgage types. Interest rates have been at historical lows and are now returning to a more normal level. Energy prices, for who knows what reason outside of the avarice of the not so recently re-merged major oil companies have doubled to trippled in the past few years. This affects everything that needs to move from a producer to a market and we are seeing that in significantly increased grocery prices.

Since many houses are purchased on little money down, variable rate mortgages, as short and long term interest rates begin to rise, those with ARM's coming due will see dramatic mortgage payment increases. I doubt property taxes will go down when housing sales prices are adjusted to reflect the higher monthly payment / thousand, so unless you can get a reasonable rate that is fixed or controllable for the period you plan to own the house, the mortgage interest rate could go up significantly and your payment along with it. This is a double edged sword. It could significantly increase your monthly cash outlay, and, the absence of easy, cheap mortgage money in the face of fundamental increases in essential commoditites will make less money available for house payments. Your neighbors who bought at the top and got no money down, interest only loans, are now screwed, since there is no further appreciation in house prices, and perhaps even a dip. Prices have dropped significantly in Boca Raton, recently. They did the same in California and Boston about 20 years ago, and throughout the country people were sitting on unsold property because there was no market at the asking prices.

Know the market, find out what the actual selling prices and trends are and bid wisely. Be prepared to rent. I did a spent a year elsewhere and ended up renting a palace for about the same as it would have cost me to buy it, after all taxes, repairs and maintenance and other considerations were taken into account. Be prudent in signing a mortgage and make sure you look at and assume that in the worst case on adjustables that you'll be able to keep you head above water.

ARMs, balloons, and interest only loans are pretty scary, not sure i would go that route currently.

This has been an incredibly informative thread, thanks for all the input.

 

[samwise]

obviously plenty hidden (or just plain aggravating) costs are inherent in the buying process. anybody out there buy direct from homeowners to save some dough?

 

[pgg]

I've never heard of anything that drastic, 30% is the upper i have heard, 40% would be great for us, might send the rest of the country into a recession though.

The last crash in LA saw prices drop up to 30-40%. This runup has gone higher and faster than previous cycles. If you look at San Diego, it may very well fall 50%, especially in the condo sector of the market.

30-40% corrections are not the least bit unprecedented, and historically it has taken 5-10 years for the market to bottom out before it even begins to regain lost ground.

I guess i should mention that i am going for residencies that are 5-7 years in length. I dont think i would buy a house for a 3 year residency unless it was the city i wanted to settle in.

5-7 years has not been enough to ride out the dips in the previous two real estate cycles in this country.

One thing that is left out of these discussions of "buy if you plan to stay N years" is the blindingly obvious: Even if you can afford to do so, why on earth would you want to pay $X for any asset if every indication suggested it would be worth 5% or 10% or 20% or 30% less a few years later?

Buy low, sell high. Smart investors don't rationalize buying high based on the number of years they plan to keep the asset.