Housing.....Sell High, buy High?

[spectras only]

I can't tell you how many clients I deal with that are getting close to retirement age that have kids away at college sell there 2500 sq foot houses for 3200 sq foot houses that cost 300K more and put them on a 30 year buy.

They should be selling the 700K 2500 sq foot house and downsizing and throwing cash in the bank.

Were all retarded....no reason in the world for 2 people to have a 3500 sq foot 5/3 2 story house but it happens daily

I just sold my 2500 sq townhome for 780K and bought a 3300 sq ranch style home on 0.81 acre for 585K in the Okanagan to retire there.:thumbsup
Did it just in time during the buying frenzy in Vancouver, while the market was hot until Aug 1st this month. The fucktards dropped the ball [ politicians ] buckled under pressure, trying to curtail foreign investors jacking up real estate in Vancouver. They brought in a 15% tax added to the purchase price of a house for foreign buyers.:tbi
The Asians were paying 1 mil over asking price of a house in Vancouver anyway:rolleyes.The market literally halted now, down a whopping 90% temporarily I guess, with everyone including asian investors playing a waiting game! I've heard they're switching their interests down south of the border. The government lost big time revenue not collecting the transfer tax they so enjoyed until now.You can't fix stupid, they try controlling the market they know nothing about.they claim,stopping foreigners will get a chance for locals buying affordable housing The cheapest house in Vancouver is over a mil, since when is that affordable for most:rolleyes

 

[riverroyal]

my insider expert info is from a hot blonde that has my last name,,who is in new home building. The houses you see now are being built on land that was sat on by builder from the last down turn. Or bought during the down turn. So, as this land runs out, which it is, builders are buying up every desirable property. That is the next build that is coming. The forecast for new homes is strong for 3 years. This with low rates and loans becoming easier is pushing this along. I know I know, its a false market blah blah.
So, if you sell high buy high you just need to look at the location of the next house. Will your current house not lose its value as much as the new one? or vise versa. Think IE or Temecula, compare that to OC or coastal homes, 2 homes valued the same in both locations, OC did not drop as much percentage wise.
New homes are selling great in great areas. Average areas they are selling just not as fast. So home buyers are having no problem dropping 1 million for great location, but new home buyers are struggling with 500K in average areas/neighborhoods. No idea where these people are getting the money but they are and it shows in numbers of home built and sold in high price per sq ft areas.

I looked at selling now and sitting on the money, I looked at renting my house. Both don't make sense yet. Im coastal North SD and for some reason our neighborhood is very desirable. We are just over $300 a sq ft. Carlsbad is now $400 a sq ft. So, the though is wait, I will watch the market knowing my area is the slowest to drop, history has proven that.
But, Im going insane living here, that will probably Trump my other thoughts.

 

[Hammer]

Wise man.

My town home was $335k in 2012. Late last year, when my neighbor sold for $520k and builders started selling new town homes, on my street, of the same size, in the low $600's, I saw the sign. Time to cash out and rent.

The only reason why prices escalated from the 2008 crash was due to government intervention (bail outs and low interest rates). Homes should have never been at those prices and here we are approaching them again. There's only one thing that can justify increased prices and that's income. Yet, the average American income is slipping, while home prices are going up. That's inflation, not growth. Prices aren't going up, the dollar is becoming worth less.

As far as buying while rates are low: Rates always fluctuate. You can refi as rates go down. However, you can't call your bank and adjust your mortgage balance or ask for the down payment back that disappeared with the market decline. The smart idea should be to save and finance less, not finance more at a lessor rate. That's idiotic philosophy and why our country is in bad shape. Higher raters encourage people to save their money and pay cash for products. Low rates encourage accumulating debt.

If rates skyrocket, prices will have to reflect. Just as prices reflect a rate decrease. Southern CA experienced this most recently in 2013.

In my professional opinion. If you're in your final home, stay. If you plan to make a move in the next decade, get out now and wait (if you can).

I'd love to get out and wait. That is an option but it with the baby I don't know how long we could make it work. My biggest issue is with that is I need property for storage in the mean time. Just not a viable option for my family, business wise it would be great! (Should of pulled out[emoji23])

 

[Abc123]

Why is that? I disagree. The fundamentals are much different this time around. House prices are currently artificially inflated due to interest rates. The only way you will see a complete crash like 08 is if rates go up significantly. With government involvement, don't expect that to happen anytime soon.

Buy high, sell high or buy low, sell low. Very few time the market successfully. Even when timed correctly, any savings is often offset by rent.

I respect your disagreement and to answer your question:

Everything since then is artificial. How is that fundamentally different from the artificial market of 2002-2006? Artificial is artificial. You can't prop up an artificial market forever. Eventually the house of cards must fall.

You said the only way a crash could arise is if rates significantly rise? I beg to differ. Unemployment could rise, commodities could rise in price, hedge-funds do plan to sell large inventories in the next few years (at this time many smaller investors will follow lead), more companies could go overseas or shut down due to over regulation and taxation, builders could over saturate the market with inventory, WWIII and the list goes on.

My theory is once builders over saturate the market, hedge funds will begin to sell and then we'll see a domino effect.

The government (FHA) has insured a majority of mortgages originated since 2008 (when loan limits increased). When the bubble pops, who's going to bail out the government?

Let's not also forget the commercial RE has been in the crapper. This is why developers are so able to buy commercial land and rezone for profit. But wait a second, if commercial RE is in the crapper, that must mean more and more businesses in America are shutting down, moving abroad and no one is replacing them.

I'm not a doom and gloomer. I strongly believe that through this inevitable downfall, will come a lot of of opportunity for increased prosperity. I believe this in such a manner that I'm positioning myself to take advantage. If I'm wrong, I'm wrong, but a least I took a chance and protected my self for the just in case.

 

[RodnJen]

Lots going on in this thread and lots of good advice.

Prices are high because of interest rates and demand. While this may be "artificial" at this juncture it is not "structural" like we experienced before.

As for rents, I don't know what area you are looking in but they are high just about everywhere. I rent a 3 bed, 1 1/2 bath, 1,400 sq. ft. home on a busy corner for $2,350/month and my tenants are happy as hell. They are both college grads, have good but not lucrative careers and they are not anywhere close to qualifying. There are lots of people in the same boat so the rental market well be tight for some time.

 

[COCA COLA COWBOY]

It's not going to crash like 07/08. It's just going to be stagnant like the 90's. People actually had to show income to purchase homes this time around so they can afford to keep the homes they purchased. However, in simple supply and demand terms we will see a large increase in supply for a multitude of reasons to come. Actually, in the Palm Desert/Coachella Valley we recently saw this because the Canadian Dollar tanked and drove the Snowbirds to sell and take those funds north for an expected ROI. People won't have to sell as we know, but the comp's will be driven down due to people having to sell...deaths, job moves, etc. This will drive prices down.

SDBroker has yet to see it in his market as San Diego is still increasing. San Diego along with major metropolitan areas are the first to go up and the last to go down historically. All the brokers I know in SD are planning their business for a decline in the next 5 months.

Some people base declines on a 10 year cycle, but all economist actually base it on the Affordability Index. This index states that the market will decline when homes become unaffordable. The index/number is different for each county. When we were at an all time low, the index in Riverside County was .33, meaning that a third of the population could afford to purchase homes. That number is much much lower now.

Another tell tale is lending. In discussions with my lenders and other brokers in the business, we are seeing the deals that are going through being so close it's ridiculous. In a large number of deals, we are seeing people that can barely afford the homes they are buying. This is extremely scary as small changes in their income can be detrimental on those people paying their bills.

 

[riverroyal]

I respect your disagreement and to answer your question:

Everything since then is artificial. How is that fundamentally different from the artificial market of 2002-2006? Artificial is artificial. You can't prop up an artificial market forever. Eventually the house of cards must fall.

You said the only way a crash could arise is if rates significantly rise? I beg to differ. Unemployment could rise, commodities could rise in price, hedge-funds do plan to sell large inventories in the next few years (at this time many smaller investors will follow lead), more companies could go overseas or shut down due to over regulation and taxation, builders could over saturate the market with inventory, WWIII and the list goes on.

My theory is once builders over saturate the market, hedge funds will begin to sell and then we'll see a domino effect.

The government (FHA) has insured a majority of mortgages originated since 2008 (when loan limits increased). When the bubble pops, who's going to bail out the government?

Let's not also forget the commercial RE has been in the crapper. This is why developers are so able to buy commercial land and rezone for profit. But wait a second, if commercial RE is in the crapper, that must mean more and more businesses in America are shutting down, moving abroad and no one is replacing them.


I'm not a doom and gloomer. I strongly believe that through this inevitable downfall, will come a lot of of opportunity for increased prosperity. I believe this in such a manner that I'm positioning myself to take advantage. If I'm wrong, I'm wrong, but a least I took a chance and protected my self for the just in case.

Take that off your concerns. They learned that in a BIG BIG way last time around. Now the new homes you see are phase 1 or 2 of a 6 to 10 phase build out. They know those are selling, and labor and material is locked in for that. After that early inventory is gone and the new community excitement fades they are waiting for buyers to start a home.
There are some big home builders that are now gone due to inventory overage from last time. There are also some big builders that merged to absorb that type of lose. Standard Pacific is one of them.

 

[Hammer]

Well then you can buy a cheaper house in Pacoima. :rolleyes

That was a broad statement. Where I live the districts are all pretty good.

 

[Advantage 1]

Good luck with the search, Mike.

My .02 - do not get married to your mortgage. Just because you are approved for a loan for "X", doesn't mean you need to go at it 100%. You'll have lots of new expenses with the little one coming

 

[YoPengo]

Looking to get into a bigger house, the fact is its not if...its when. My first thought is sell high and rent till the housing market drops then buy low. That would mean renting for awhile, when looking at current rentals the monthly rent would be what I would pay in a mortgage (if not more) if we were to sell now and buy a bigger place.

The other option is waiting it out a year or so and I'm almost positive the value of the current home will drop as will the market. If we sell high buy high we don't have to worry about unloading the house when it is value has dropped and scrambling to find a bigger house.

Thoughts?

Mike... I was in your shoes eighteen years ago. We had a nice condo that when we sold... we broke even. We only put 5% down on a house (The one we are in now) and paid extra $ on every mortgage payment for the last eighteen years. When we hit 20% equity we dropped the PMI..We did not have cash to put more down but our incomes changed over the years... We added on, fixed it up and raised our family here. We've been through two bubbles... I didn't care because it would only effect us if we sold. I will guarantee that the house you buy now will increase (Huge) in eighteen years. Morale of the story... buy the biggest house you can afford ( YOU CAN AFFORD ) in a desirable neighborhood. In the early 90's I looked at huge cheap houses in Elsinore (Worked in San Clemente at the time) and a good friend reminded me the first three rules of real estate.

Pay your mortgage down as fast as you can. I never listened to the guys that said money is cheap... "Keep a high mortgage and invest". Most of those guys are broke. Our small OC house is up over 300%.

Ever win a Monopoly game without buying property?

If you have two good incomes... buy.

 

[Bobby V]

Mike... I was in your shoes eighteen years ago. We had a nice condo that when we sold... we broke even. We only put 5% down on a house (The one we are in now) and paid extra $ on every mortgage payment for the last eighteen years. When we hit 20% equity we dropped the PMI..We did not have cash to put more down but our incomes changed over the years... We added on, fixed it up and raised our family here. We've been through two bubbles... I didn't care because it would only effect us if we sold. I will guarantee that the house you buy now will increase (Huge) in eighteen years. Morale of the story... buy the biggest house you can afford ( YOU CAN AFFORD ) in a desirable neighborhood. In the early 90's I looked at huge cheap houses in Elsinore (Worked in San Clemente at the time) and a good friend reminded me the first three rules of real estate.

Pay your mortgage down as fast as you can. I never listened to the guys that said money is cheap... "Keep a high mortgage and invest". Most of those guys are broke. Our small OC house is up over 300%.

Ever win a Monopoly game without buying property?

If you have two good incomes... buy.

Yes buy now. With 2 kids and if a 3rd comes later your wife wouldn't be the first person to quit work and raise the kids. :eek

 

[BHC Vic]

Yes buy now. With 2 kids and if a 3rd comes later your wife wouldn't be the first person to quit work and raise the kids. :eek

Yup everyday I hear she wants to stay home [emoji16]

 

[Englewood]

I respect your disagreement and to answer your question:

Everything since then is artificial. How is that fundamentally different from the artificial market of 2002-2006? Artificial is artificial. You can't prop up an artificial market forever. Eventually the house of cards must fall.

You said the only way a crash could arise is if rates significantly rise? I beg to differ. Unemployment could rise, commodities could rise in price, hedge-funds do plan to sell large inventories in the next few years (at this time many smaller investors will follow lead), more companies could go overseas or shut down due to over regulation and taxation, builders could over saturate the market with inventory, WWIII and the list goes on.

My theory is once builders over saturate the market, hedge funds will begin to sell and then we'll see a domino effect.

The government (FHA) has insured a majority of mortgages originated since 2008 (when loan limits increased). When the bubble pops, who's going to bail out the government?

Let's not also forget the commercial RE has been in the crapper. This is why developers are so able to buy commercial land and rezone for profit. But wait a second, if commercial RE is in the crapper, that must mean more and more businesses in America are shutting down, moving abroad and no one is replacing them.

I'm not a doom and gloomer. I strongly believe that through this inevitable downfall, will come a lot of of opportunity for increased prosperity. I believe this in such a manner that I'm positioning myself to take advantage. If I'm wrong, I'm wrong, but a least I took a chance and protected my self for the just in case.

I think overall we have a similar view. By fundamentals, I mean the lending environment was much different in 08 then it is now...The sudden crash we experienced was caused by the poor underwriting standards (among other things). As you know, it's much harder to be approved these days. IMHO, we wont see a crash of that magnitude for a long time. Slowdowns? yes. Crash? I don't think so.

 

[Flying_Lavey]

I've been keeping an eye on RE up here in Heritage for a few years now. The last 2 years the prices have jumped DRASTICALLY. But I think this is artificially inflated as well. There are 40 year old mobiles for sale on a 9k Sq ft lot for 2 to 300k but most are almost impossible to finance so they need a cash buyer. With people getting some equity in their homes in other areas, they are starting to buy these places with cash, like they did before. But there are also brand new homes being built up here by a somewhat shady development/GC agreement. These houses are being built far faster than they can be sold and when they do sell, it seems they come back on the market within a year with some little investment done to them. Add to that many stories of the appraisal of the new properties being coming in 30 to 40k below asking. All these factors, plus a possibly continuing drought (lower lake levels and less wine production) leads me to strongly feel the housing market in this little area is going to have to bottom fall out within the next 5 years or so. I'm hoping by then I'm ready to buy and have a descent down saved up. In the meantime, I lucked out and am reacting a 3/2 with a 50' pull-through garage for $1,200 and the biggest thing my landlord was looking for when he was renting it was someone that was going to stay a long time and treat his place right.

 

[wsuwrhr]

Solid

Mike... I was in your shoes eighteen years ago. We had a nice condo that when we sold... we broke even. We only put 5% down on a house (The one we are in now) and paid extra $ on every mortgage payment for the last eighteen years. When we hit 20% equity we dropped the PMI..We did not have cash to put more down but our incomes changed over the years... We added on, fixed it up and raised our family here. We've been through two bubbles... I didn't care because it would only effect us if we sold. I will guarantee that the house you buy now will increase (Huge) in eighteen years. Morale of the story... buy the biggest house you can afford ( YOU CAN AFFORD ) in a desirable neighborhood. In the early 90's I looked at huge cheap houses in Elsinore (Worked in San Clemente at the time) and a good friend reminded me the first three rules of real estate.

Pay your mortgage down as fast as you can. I never listened to the guys that said money is cheap... "Keep a high mortgage and invest". Most of those guys are broke. Our small OC house is up over 300%.

Ever win a Monopoly game without buying property?

If you have two good incomes... buy.

 

[OldSchoolBoats]

When housing prices come down, they aren't going to fall to this crazy low level again like they did with the last crash. Prices, IMO, are going to stabilize and maybe fall slightly but when that happens, the money is going to be more expensive so it's a catch 22.

GGC (global growth concerns) is a real issue. Bond yields will continue to fall to levels never seen before and rates will follow. It may not be in the next 6 - 12 months, but we believe that sometime in the next 2 years a 30 year mortgage will be under 3%.

With low bond yields and a volatile stock market, Real Estate will be the only safe investment with a guaranteed return so don't expect housing prices to fall too much.

Sell now and buy now with cheap money as long as the numbers work for you and your not house poor.

 

[THE WIDGE]

http://feedproxy.google.com/~r/DrHo...cLMTo/?utm_source=feedburner&utm_medium=email


Prices will adjust, and the longer they don't, the greater adjustment. Many first time buyers have school debt which effects debt/income ratio, not to mention large down. Lowest home ownership % in 50 years. Many first time buyers can not afford. Foreign $ dries up, investors die up, then who's left to purchase. Prices have to adjust for all the millinials living at home or renting to start purchasing.

 

[Abc123]

http://feedproxy.google.com/~r/DrHo...cLMTo/?utm_source=feedburner&utm_medium=email


Prices will adjust, and the longer they don't, the greater adjustment. Many first time buyers have school debt which effects debt/income ratio, not to mention large down. Lowest home ownership % in 50 years. Many first time buyers can not afford. Foreign $ dries up, investors die up, then who's left to purchase. Prices have to adjust for all the millinials living at home or renting to start purchasing.

Bingo! The longer they don't, the bigger the adjustment. We can all wish, but to wish with your fingers crossed, only considering the data that aligns with what you're wishing for is naive and careless. You can't avoid cold hard facts.

I live on the coast with several colleges within a few square miles; Lots of young people renting. Since I'm moving, I've been looking at apartments. I was shocked to see so many nice, "luxury style" apartments offering no cost or little cost move in. Even rental property owners have had to adjust, because the millennials have no money! They're stuck working a part-time, low-paying job. And paying for a useless degree, living at their parent's house. 20-30 years ago, this age group would be employed full time or starting a business. Not the case today.

My neighbor across the street, helped her kid through college (forensics science). He graduated, moved out a year ago, with his gf. At the time he drove a old S10 and his gf an old Mustang. They both work part-time. Fast forward to 3 weeks ago. They both moved back in with the mom. Both have brand new cars (Audi and Ford Explorer), student loan debt and can't afford to live on their own. The promise of "get a job straight of of college" mixed with instant gratification has put a lot of strain on the millennial generation.

 

[boatpi]

Buy in areas where the cannot build many new houses, warm climates ( western USA), in an area of excellent employment, white collar jobs, areas of universities or ports that are very active. Most any coastline within 2 miles if you can afford it. If you can do this, history has shown you are safe.

For income housing, it is all about employment. Areas that have universities, military bases that appear to be long term commitments, ie: Las Vegas or NLV.

Remember, low interest and tax writeoff's are a very large part of any real estate purchase.

 

[rivermobster]

Mike... I was in your shoes eighteen years ago. We had a nice condo that when we sold... we broke even. We only put 5% down on a house (The one we are in now) and paid extra $ on every mortgage payment for the last eighteen years. When we hit 20% equity we dropped the PMI..We did not have cash to put more down but our incomes changed over the years... We added on, fixed it up and raised our family here. We've been through two bubbles... I didn't care because it would only effect us if we sold. I will guarantee that the house you buy now will increase (Huge) in eighteen years. Morale of the story... buy the biggest house you can afford ( YOU CAN AFFORD ) in a desirable neighborhood. In the early 90's I looked at huge cheap houses in Elsinore (Worked in San Clemente at the time) and a good friend reminded me the first three rules of real estate.

Pay your mortgage down as fast as you can. I never listened to the guys that said money is cheap... "Keep a high mortgage and invest". Most of those guys are broke. Our small OC house is up over 300%.

Ever win a Monopoly game without buying property?

If you have two good incomes... buy.

Mike's gonna do what his wife tells him to do...

Not sure why he even started this thread!

 

[530RL]

Here is another view.

In real dollars, a 10,000 house in 1890 would be worth almost the exact same amount in real dollars in 2010 but 350,000 in nominal dollars.

In other words, there is a difference in a change in price, and a change in economic value. One of the benefits of owning a home today when interest rates are so low assuming you lock them, is that you purchase it in real dollars but you get to pay back the principal balance in nominal dollars over 30 years. One of the negatives is that they have changed little in real value over the last 120 years. As a national pool, a house is not a great investment in real dollars, it just looks good in nominal dollars as the price went up, but so did the price of everything else.

Explanation here: http://visualizingeconomics.com/blog/2011/03/23/real-vs-nominal-housing-prices-united-states1890-2010

A home is where you live, a home mortgage is one of the few tax advantaged things left in the tax code. (unless you make a lot of money and then you don't get 80% of your interest deduction)

Buy a home where you want in a good school district that will not get worse over time.

We all buy boats, jewelry, cars, clothes, fancy wheels and tires, fancy dinners out and all other things that we just view as consumption, will only be worth pennies on the dollar in a few days or years, and we really enjoy them. Why not look at a home in the same way. Buy what you can afford and enjoy it, you will spend more time in in that any boat, motorhome or car you ever buy.

Your house is not your retirement or investment fund, you need one of those seperately.

 

[Mandelon]

I don't see a crash coming anytime soon. I've been in Real Estate since the 80's, done title, lending, brokerage and banking, and now construction. Concentrated in foreclosures for the past two downturns.

The last one was too many folks getting into houses with no skin in the game. When gas prices neared $5.00 a gallon that pushed everything over the edge. Now the lenders are tighter with their qualifying. The infamous "liar's loans" are not there where every hairdresser could afford a $500,000 home.

A few issues to be aware of though... the cost of healthcare is sucking a lot of money out of the economy. A family of four is $2000 a month in premiums...weather you pay it yourself or your company covers all or part of it. That is money that they won't be paying you with. Wages will remain slow to increase.

The unknown catastrophic event.... say Iran nukes Isreal, or Greece, Italy and Spain decide to drop the EU. This could jigger things up for a short time. Probably not having much efffect of property values...but it would bang up the stock market for a bit. I don't know that you can plan for those types of things... you can make yourself nuts thinking about the craziness in the world.

Millenials will be slow to get in the housing market. And their taste is different. They prefer more urban settings. Walking to restaurants and entertainment rather than commuting to a far off suburb is more their style.

Keep in mind as the boomer generation ages they will be downsizing and moving to more affordable locations. Most have not saved enough for retirement and are counting on their home equity to give them a boost off to Texas or South Carolina or wherever they intend to go. This should add extra inventory, but not right away. There is not enough land to build homes for everybody who wants one.

I say buy now, values are up, but in most areas they are not insane. Buy in a neighborhood you want to stay in, make sure it has good schools and low crime. Fixing it up as you go builds equity, and customizes it the way you like. Long term hold build equity and you can always use that to someday buy a DCB of your dreams.

Take on a payment you can afford, so that you can still set money aside. When there is a dip,use that opportunity to buy a duplex or triplex rental property. If you can put together a handful of rentals... you can easily retire early.

 

[LargeOrangeFont]

I don't see a crash coming anytime soon. I've been in Real Estate since the 80's, done title, lending, brokerage and banking, and now construction. Concentrated in foreclosures for the past two downturns.

The last one was too many folks getting into houses with no skin in the game. When gas prices neared $5.00 a gallon that pushed everything over the edge. Now the lenders are tighter with their qualifying. The infamous "liar's loans" are not there where every hairdresser could afford a $500,000 home.

A few issues to be aware of though... the cost of healthcare is sucking a lot of money out of the economy. A family of four is $2000 a month in premiums...weather you pay it yourself or your company covers all or part of it. That is money that they won't be paying you with. Wages will remain slow to increase.

The unknown catastrophic event.... say Iran nukes Isreal, or Greece, Italy and Spain decide to drop the EU. This could jigger things up for a short time. Probably not having much efffect of property values...but it would bang up the stock market for a bit. I don't know that you can plan for those types of things... you can make yourself nuts thinking about the craziness in the world.

Millenials will be slow to get in the housing market. And their taste is different. They prefer more urban settings. Walking to restaurants and entertainment rather than commuting to a far off suburb is more their style.

Keep in mind as the boomer generation ages they will be downsizing and moving to more affordable locations. Most have not saved enough for retirement and are counting on their home equity to give them a boost off to Texas or South Carolina or wherever they intend to go. This should add extra inventory, but not right away. There is not enough land to build homes for everybody who wants one.

I say buy now, values are up, but in most areas they are not insane. Buy in a neighborhood you want to stay in, make sure it has good schools and low crime. Fixing it up as you go builds equity, and customizes it the way you like. Long term hold build equity and you can always use that to someday buy a DCB of your dreams.

Take on a payment you can afford, so that you can still set money aside. When there is a dip,use that opportunity to buy a duplex or triplex rental property. If you can put together a handful of rentals... you can easily retire early.

You have outlined my general strategy to a T.

 

[SJP]

I am not a real-estate expert. I like go fast boats and staring at my wife in a bikini. In order to do that efficiently I had to buy a house at the beach and one at the lake.

Good thread - lots of cool information. :cool

 

[wsuwrhr]

I am not a real-estate expert. I like go fast boats and staring at my wife in a bikini. In order to do that efficiently I had to buy a house at the beach and one at the lake.

Good thread - lots of cool information. :cool

Winning.

 

[LargeOrangeFont]

I am not a real-estate expert. I like go fast boats and staring at my wife in a bikini. In order to do that efficiently I had to buy a house at the beach and one at the lake.

Good thread - lots of cool information. :cool

I was hoping you stayed at a Holiday Inn Express last night.

 

[thedan]

There is a lot of talk of selling high, and renting, which is a great strategy if you can accurately predict a crash, but is a gamble. Something I didn't see mentioned is the low inventory of rentals in many markets, and the high rent in same said markets. Before you sell, check your area for availability and price!

 

[Paul65k]

http://feedproxy.google.com/~r/DrHo...cLMTo/?utm_source=feedburner&utm_medium=email


Prices will adjust, and the longer they don't, the greater adjustment. Many first time buyers have school debt which effects debt/income ratio, not to mention large down. Lowest home ownership % in 50 years. Many first time buyers can not afford. Foreign $ dries up, investors die up, then who's left to purchase. Prices have to adjust for all the millinials living at home or renting to start purchasing.

Matt....candidly I think you are putting way too much stock in waiting for the market to go down..........you may be right but the right market dynamics are not in place right now........on the other hand it is absolutely true that you will eventually be right.....the question is when and how much??? When it does start to go down will you be able to time the bottom or be waiting for the rest of the adjustment and possibly miss out on a good deal and when you do will the interest rates be as favorable as they are today........it's almost a certainty that they won't be so when you weigh the difference in cost of acquisition vs.and the cost of money it may not be as large a windfall as you think......damn this real estate thing is complicated, wouldn't it be easy if there were hard and fast rules like in your line of work?????.......but there aren't and the only thing that is a pretty great certainty is that interest rates are at historic lows and if you lock in a 30 year loan at these rates you will be getting all but free use of the $$ especially when rates creep up to more traditional levels......damn this is complicated

 

[TCHB]

I am not a real-estate expert. I like go fast boats and staring at my wife in a bikini. In order to do that efficiently I had to buy a house at the beach and one at the lake.

Good thread - lots of cool information. :cool

I did the same thing. It was a good thing!

Location Location Seee Paulll

 

[460]

Why not worry about finding a new house once the baby's born and things settle down. Keep paying the loan down on the current house and buy and sell later. Just saying you are going to have a lot on your plate the next year.

 

[brgrcru]

I don't see a crash coming anytime soon. I've been in Real Estate since the 80's, done title, lending, brokerage and banking, and now construction. Concentrated in foreclosures for the past two downturns.

The last one was too many folks getting into houses with no skin in the game. When gas prices neared $5.00 a gallon that pushed everything over the edge. Now the lenders are tighter with their qualifying. The infamous "liar's loans" are not there where every hairdresser could afford a $500,000 home.

A few issues to be aware of though... the cost of healthcare is sucking a lot of money out of the economy. A family of four is $2000 a month in premiums...weather you pay it yourself or your company covers all or part of it. That is money that they won't be paying you with. Wages will remain slow to increase.

The unknown catastrophic event.... say Iran nukes Isreal, or Greece, Italy and Spain decide to drop the EU. This could jigger things up for a short time. Probably not having much efffect of property values...but it would bang up the stock market for a bit. I don't know that you can plan for those types of things... you can make yourself nuts thinking about the craziness in the world.

Millenials will be slow to get in the housing market. And their taste is different. They prefer more urban settings. Walking to restaurants and entertainment rather than commuting to a far off suburb is more their style.

Keep in mind as the boomer generation ages they will be downsizing and moving to more affordable locations. Most have not saved enough for retirement and are counting on their home equity to give them a boost off to Texas or South Carolina or wherever they intend to go. This should add extra inventory, but not right away. There is not enough land to build homes for everybody who wants one.

I say buy now, values are up, but in most areas they are not insane. Buy in a neighborhood you want to stay in, make sure it has good schools and low crime. Fixing it up as you go builds equity, and customizes it the way you like. Long term hold build equity and you can always use that to someday buy a DCB of your dreams.

Take on a payment you can afford, so that you can still set money aside. When there is a dip,use that opportunity to buy a duplex or triplex rental property. If you can put together a handful of rentals... you can easily retire early.

Sounds a lot like the mid 2000's
Homes can be a big money pit also.
70% of people are living week to week and month to month.
Saving money with a family is something most can not do. Something always comes up .
Let alone trying to save money to buy Real estate . When it drops.
What's that % top 10% of wage earners.
Using equity to buy toys is the worst thing, someone can do.
Using equity to buy Income property sounds better.
With the way shit is going . Me personally, I would not buy shit at this time. Be it, cars boats homes.
Trying not to be a Debbie downer. But reality, most of what's this government is doing smells a lot like shit.

 

[THE WIDGE]

Matt....candidly I think you are putting way too much stock in waiting for the market to go down..........you may be right but the right market dynamics are not in place right now........on the other hand it is absolutely true that you will eventually be right.....the question is when and how much??? When it does start to go down will you be able to time the bottom or be waiting for the rest of the adjustment and possibly miss out on a good deal and when you do will the interest rates be as favorable as they are today........it's almost a certainty that they won't be so when you weigh the difference in cost of acquisition vs.and the cost of money it may not be as large a windfall as you think......damn this real estate thing is complicated, wouldn't it be easy if there were hard and fast rules like in your line of work?????.......but there aren't and the only thing that is a pretty great certainty is that interest rates are at historic lows and if you lock in a 30 year loan at these rates you will be getting all but free use of the $$ especially when rates creep up to more traditional levels......damn this is complicated

Paul,
I would agree I'm a bit more conservative currently in my thinking after making two home purchases in 2005 which taught me a valuable lesson. I also learned the opposite lessons from two other purchases. Agreed, $ is super cheap, and isn't going to make you anything if it's just going to sit in the bank. Complicated, oh yes indeed, several individual variables to consider. I would pull the trigger if the right deal came up

 

[Hammer]

Mike's gonna do what his wife tells him to do...

Not sure why he even started this thread!

If I did that we would have 25' boat in the driveway. Lol

 

[Hammer]

Why not worry about finding a new house once the baby's born and things settle down. Keep paying the loan down on the current house and buy and sell later. Just saying you are going to have a lot on your plate the next year.

We live in a 2 bedroom with a "loft" we are moving while it's a sellers market, we need a bedroom for the kid.

 

[460]

We live in a 2 bedroom with a "loft" we are moving while it's a sellers market, we need a bedroom for the kid.

Lol nice edit.

You better get a 5 bedroom to make room for number 3[emoji1]

 

[Cray Paper]

Historically the average 30 yr mortgage rate is 9%. Rates above that have historically been during a recessionary period. Rates below that have historically been during an expanding economy. Remember that I said Historically. I surely don't feel that we are in an expanding economy by traditional standards right now. We are in uncharted territory right now so history may not have much bearing on the future at all.
With all of that being said I do know 1 thing for sure and that is this...
The value of ANY asset only matters twice. When you buy it and when you sell it. IF you can transfer your equity into another asset that has the long term potential to greater appreciation and you can cover the debt service under the worst possible circumstances that you can imagine then it makes for a sound gamble, if not then the gamble carries greater risk. Either way, when you acquire an asset banking on it's future value.....that is considered gambling. If you finance that acquisition, you have double downed on your gamble. Both are gambling yet one is ALL IN.
Now isn't that clear as MUD.
The easy part of gambling is knowing when to buy into the game, the hard part is knowing when to cash out.

Cliff notes, family dwellings are not something to look at as investment opportunities. If your looking at buying a home to live in and make money off of it, you better be prepared to lose your money and not blame anyone else except yourself.

I think that's where you were going, just trying to clarify for the slowest guy in the room, me.

 

[AzGeo]

Lots going on in this thread and lots of good advice.

Prices are high because of interest rates and demand. While this may be "artificial" at this juncture it is not "structural" like we experienced before.

As for rents, I don't know what area you are looking in but they are high just about everywhere. I rent a 3 bed, 1 1/2 bath, 1,400 sq. ft. home on a busy corner for $2,350/month and my tenants are happy as hell. They are both college grads, have good but not lucrative careers and they are not anywhere close to qualifying. There are lots of people in the same boat so the rental market well be tight for some time.

When you are a capitalist in real life ?

Any worthy 'left wing socialist' would give all that rent money to the DNC !!!

When HRC becomes POTUS, she will demand 50% of your income for taxes, and then you won't be able to even maintain the property, let alone make any money on it .

You may just get what you (idiots) asked for .......

 

[Bobby V]

When you are a capitalist in real life ?

Any worthy 'left wing socialist' would give all that rent money to the DNC !!!

When HRC becomes POTUS, she will demand 50% of your income for taxes, and then you won't be able to even maintain the property, let alone make any money on it .

You may just get what you (idiots) asked for .......

I see the Sky Vodka has kicked in for the night. :rolleyes

 

[530RL]

When you are a capitalist in real life ?

Any worthy 'left wing socialist' would give all that rent money to the DNC !!!

When HRC becomes POTUS, she will demand 50% of your income for taxes, and then you won't be able to even maintain the property, let alone make any money on it .

You may just get what you (idiots) asked for .......

Not sure in this group, but I think I am a capitalist or at minimum I work for capitalists and part of my job is to maximize after tax income.

I am in no way a supporter of HRC but I do prefer facts.

The top marginal rate is 39.6 percent (way to high) but no one who can make a lot of money pays a federal effective tax rate of that rate. If one lives in California or New York city and chooses to by living there, the marginal rate can get to 50%, but you have to be pretty dumb to end up with an effective rate of 50%.

It is important to remember that 45% of Americans pay no income tax whatsoever. They do pay payroll tax but not income tax. This adulteration was a result of Bush II's reform which in my opinion may be the biggest mistake in American history. When 45% pay no income individual income tax, it created the exact problem in the electorate we have today. It is important to accept this fact and by pointing it out, I think it lost Romney the election.

HRC's proposal is an additional tax on incomes above 5 million. People who make 5 million a year know how to not pay that rate. If not, they will not continue to make 5 million a year.

Under the current tax rules, it is very easy to reduce the tax burden.

I would prefer to go back to the tax reform under Reagan with a max rate of 28%, however, both Republicans and Democrats have adulterated that reform over the years and I think it is important to look at the facts and accept that reality.

 

[rivermobster]

If I did that we would have 25' boat in the driveway. Lol

I'm liking this gal already. Good catch! 👌

 

[thetub]

Not sure in this group, but I think I am a capitalist or at minimum I work for capitalists and part of my job is to maximize after tax income.

I am in no way a supporter of HRC but I do prefer facts.

The top marginal rate is 39.6 percent (way to high) but no one who can make a lot of money pays a federal effective tax rate of that rate. If one lives in California or New York city and chooses to by living there, the marginal rate can get to 50%, but you have to be pretty dumb to end up with an effective rate of 50%.

It is important to remember that 45% of Americans pay no income tax whatsoever. They do pay payroll tax but not income tax. This adulteration was a result of Bush II's reform which in my opinion may be the biggest mistake in American history. When 45% pay no income individual income tax, it created the exact problem in the electorate we have today. It is important to accept this fact and by pointing it out, I think it lost Romney the election.

HRC's proposal is an additional tax on incomes above 5 million. People who make 5 million a year know how to not pay that rate. If not, they will not continue to make 5 million a year.

Under the current tax rules, it is very easy to reduce the tax burden.



I would prefer to go back to the tax reform under Reagan with a max rate of 28%, however, both Republicans and Democrats have adulterated that reform over the years and I think it is important to look at the facts and accept that reality.

but I think the Dems have adulterated taxes a little more...

and are constantly trying for more

 

[530RL]

but I think the Dems have adulterated taxes a little more...

and are constantly trying for more

Yes they are which is why it is important to keep the Senate and the House.

But back on Hammer's topic.

Buy a house in a good neighborhood with good schools and enjoy it. :thumbsup:thumbsup

 

[thetub]

Yes they are which is why it is important to keep the Senate and the House.

But back on Hammer's topic.

Buy a house in a good neighborhood with good schools and enjoy it. :thumbsup:thumbsup

:tbi

 

[Faceaz]

I'm in the middle of selling / buying & doing it through a 1031 exchange. If you sell & wait, you will end up paying all the taxes that go along with it. With a 1031 exchange you can avoid all the taxes & go straight into the next home. There's allot of rules & timelines to it (Hammed has been a huge help for us), but done right you can avoid Uncle Sam getting in your pocket. We sold our Ca. rental & buying 3 rentals in Az. 2 Are done, the 3rd is in escrow & in the end we will still pocket a chunk with minimal taxes. You can always start the 1031 & if you don't find the right property in time, end up taking the money. I think it cost us $750 to set-up, but paying off now.

 

[thetub]

I'm in the middle of selling / buying & doing it through a 1031 exchange. If you sell & wait, you will end up paying all the taxes that go along with it. With a 1031 exchange you can avoid all the taxes & go straight into the next home. There's allot of rules & timelines to it (Hammed has been a huge help for us), but done right you can avoid Uncle Sam getting in your pocket. We sold our Ca. rental & buying 3 rentals in Az. 2 Are done, the 3rd is in escrow & in the end we will still pocket a chunk with minimal taxes. You can always start the 1031 & if you don't find the right property in time, end up taking the money. I think it cost us $750 to set-up, but paying off now.

Im pretty sure there is a $250,000 single and $500,000 couples exemption every 3 years or something on primary residence

Shintoooooo help

 

[AzGeo]

I see the Sky Vodka has kicked in for the night. :rolleyes

I'll remember your comments like this when HRC has you are riding the bus to your union job, smart ass .

Not sure in this group, but I think I am a capitalist or at minimum I work for capitalists and part of my job is to maximize after tax income.

I am in no way a supporter of HRC but I do prefer facts.

The top marginal rate is 39.6 percent (way to high) but no one who can make a lot of money pays a federal effective tax rate of that rate. If one lives in California or New York city and chooses to by living there, the marginal rate can get to 50%, but you have to be pretty dumb to end up with an effective rate of 50%.

It is important to remember that 45% of Americans pay no income tax whatsoever. They do pay payroll tax but not income tax. This adulteration was a result of Bush II's reform which in my opinion may be the biggest mistake in American history. When 45% pay no income individual income tax, it created the exact problem in the electorate we have today. It is important to accept this fact and by pointing it out, I think it lost Romney the election.

HRC's proposal is an additional tax on incomes above 5 million. People who make 5 million a year know how to not pay that rate. If not, they will not continue to make 5 million a year.

Under the current tax rules, it is very easy to reduce the tax burden.

I would prefer to go back to the tax reform under Reagan with a max rate of 28%, however, both Republicans and Democrats have adulterated that reform over the years and I think it is important to look at the facts and accept that reality.

YOU prefer YOUR FACTS, not reality ........

Please stop your normal load of bullshit here . What YOU CALL FACTS, just SMELL UP THE PLACE with more BS from your unknown/slanted sources .

The FACTS here ARE, he claims to be a HRC supporter and she is 'pro socialist', yet he charges rent equal to the properties around him . That is capitalism RIGHT ? Don't keep trying to make this some other discussion for your use, I know what he said and what I said .

IF he were an actual 'socialist' he would not even consider being a LANDLORD, he would allow people to come and go without charging any of them for rent .

He is a hypocrite just like most of the blood suckers who CLAIM to be for the DNC and HRC . They claim to be 'for the greater good of the people', but they don't live that kind of life ........

 

[Faceaz]

Im pretty sure there is a $250,000 single and $500,000 couples exemption every 3 years or something on primary residence

Shintoooooo help

You're right.. Seems I've heard of it before, here's what I found:

There are certain additional requirements you must meet to qualify for the $500,000 exclusion. Namely, you must be able to show that all of the following are true:
-you are married and file a joint return for the year
-either you or your spouse meets the ownership test
-both you and your spouse meet the use test, and
-during the 2-year period ending on the date of the sale, neither you or your spouse excluded gain from the sale of another home.

If either spouse does not satisfy all these requirements, the exclusion is figured separately for each spouse as if they were not married. This means they can each qualify for up to a $250,000 exclusion. For this purpose, each spouse is treated as owning the property during the period that either spouse owned the property. For joint owners who are not married, up to $250,000 of gain is tax free for each qualifying owner.

If your spouse dies and you subsequently sell your home, you qualify for the $500,000 exclusion if the sale occurs within two years after the date of death and the other requirements discussed above were met immediately before the date of death.

 

[Hammer]

We are going for it... House is going on the market if we can't find what we want in a month we will pull it back off the market and wait till the baby is here and move next summer

 

[COCA COLA COWBOY]

I'm in the middle of selling / buying & doing it through a 1031 exchange. If you sell & wait, you will end up paying all the taxes that go along with it. With a 1031 exchange you can avoid all the taxes & go straight into the next home. There's allot of rules & timelines to it (Hammed has been a huge help for us), but done right you can avoid Uncle Sam getting in your pocket. We sold our Ca. rental & buying 3 rentals in Az. 2 Are done, the 3rd is in escrow & in the end we will still pocket a chunk with minimal taxes. You can always start the 1031 & if you don't find the right property in time, end up taking the money. I think it cost us $750 to set-up, but paying off now.

If your selling your primary residence after owning it for two years your allowed $250k non-taxable, $500k if your married.

 

[riverroyal]

We are going for it... House is going on the market if we can't find what we want in a month we will pull it back off the market and wait till the baby is here and move next summer

what the hell are you talking about? This thread is politics only. I just logged and thought I would see whats happening here REGARDING houses. This place , Riverdaves, can turn a thong post into a political pile of shit in minutes.