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slap me silly posted:How are you positioned financially? Houses are scary and bad things could happen, but if you have enough cash stowed away you can handle them. Also consider how deeply involved you want to get with your parents financially, because what you're describing has plenty of potential for bad feelings to crop up. We couldn't pay for something catastrophic but repairs that would be a few hundred to a few thousand dollars could be dealt with without trouble. Especially because we'll be saving $300 a month or there abouts that we had been spending on rent because the mortgage is much less (even with interest and home insurance) than we would pay in rent. My parents have another rental property (a nicer one) on the other side of town. This place isn't as nice as that one but it is super cheap and its easy money for them to be landlords. My parents are normal, reasonable people so I have no worries about them assuming ownership of the property. Especially because they'll be sinking the down payment into this place for us. The place is a decent house in a working-class area, it's not particularly fancy and does need cosmetic work on the interior but house-wise it's not bad. We had a bit of a leaky roof recently but it was patched and our yard gets really boggy when it rains but those are really the few concerns I have about the place that I would bring up to an inspector. But again, if our owning the home and turning it over in two in a half years (probably) seems silly, my parents can always rent it directly to us for the same price we're paying now. They'll make money and we wont have to move. They've told me that if will benefit us to be home owners, even for a short time. However if this doesn't seem right there's nothing saying that we can't go for plan B.
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Jan 2, 2016 16:19
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Comparing the rent payment with the mortgage payment is just about useless because there are so many other factors to consider. Buying a house is a lot of trouble, owning one is a lot of trouble, turning one over is expensive. If you're pretty sure you'll be out in 2 or 3 years... At 300/mo there's a good chance you won't save enough money in that time to cover maintenance, repairs, and sales costs. Convincing your parents to buy it and rent it to you sounds like a great strategy though 
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Jan 2, 2016 17:03
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slap me silly posted:Comparing the rent payment with the mortgage payment is just about useless because there are so many other factors to consider. Buying a house is a lot of trouble, owning one is a lot of trouble, turning one over is expensive. If you're pretty sure you'll be out in 2 or 3 years... At 300/mo there's a good chance you won't save enough money in that time to cover maintenance, repairs, and sales costs. Would there even be any sales costs if I just wrote over ownership to my parents? I guess we'll have to pay a lawyer but that's not the end of the world. We already do all of the lawn care and apart from a few small repairs (nailing down a loose board, changing out the pumps in the toilets, patching the roof) there's been no maintenance at all done on the place by the landlord. Other than like cleaning the gutters and changing the air filters I don't know what maintenance we'd have to pay for. I'm definitely with you though, I prefer plan B much more. I hadn't wanted to buy a house until we'd moved away with our fancy degrees and pockets full of cash. I'm really not feeling it but parents are are insisting that our buying it will give us good credit and make it look responsible and some other ethereal poo poo I don't understand. Initially plan B was the only plan and I was so down with that. I'm very much a worrier and I don't really want to put myself in a situation where we could be ruined because we bought this place. Basically we'll have to figure out if moving is more agonizing, painful, and expensive than staying and buying it.
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Jan 2, 2016 17:41
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JibbaJabberwocky posted:I'm really not feeling it but parents are are insisting that our buying it will give us good credit and make it look responsible and some other ethereal poo poo I don't understand. Previous generations in the US are emotionally invested in the idea of house ownership way beyond all reason. Do you have credit cards and pay them off in full every month? If so, your credit will be just fine when you need it.You can't just "write it over to your parents" as such, there are still costs, but you are right that it would be cheaper if you don't hire an agent. On the other hand here is a huge amount of room for bad feelings again. Suppose your parents don't want to pay you what it's worth? Which is very possible, considering they will have put in a down payment. I get along very well with my parents and I would still most likely not do something this financially incestuous. Maintenance wise, it sounds like the condition of the place is such that you might get stuck buying a new water heater, or furnace, or roof...
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Jan 2, 2016 17:56
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JibbaJabberwocky posted:But again, if our owning the home and turning it over in two in a half years (probably) seems silly, my parents can always rent it directly to us for the same price we're paying now. They'll make money and we wont have to move. They've told me that if will benefit us to be home owners, even for a short time. However if this doesn't seem right there's nothing saying that we can't go for plan B. If you guys are in grad school, chances are you won't qualify for a mortgage anyways. You'll need minimum two years job experience and a sufficient income to cover the mortgage, plus great credit with three trade lines (eg loans, credit cards). Buying a home because you don't want to bother with moving is pretty dumb, doubly so if you know you're not gonna be around in a few years. All that being said, if your parents are landlords already, they probably know what they're getting into so in that front it's not the worst idea in the world. If they're going that route though, why not either rent directly from them in the house they've already got, or buy another house that both you and them like? Don't just settle on this one because that's where you could find a rental and moving sucks. Chances are there's tons of expensive maintenance lurking under the surface because most landlords and tenants aren't exactly known for their careful maintenance. Leaky roof especially, I'd count on ten to twenty thousand for a new roof just right there.
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Jan 2, 2016 18:56
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JibbaJabberwocky posted:Tell me if this is a good idea or a dumb idea. I think they're suggesting that you should buy the house out of some concern for building credit or something, but I think that there's absolutely no benefit to doing this and it could potentially introduce a bunch of problems. Ask them in what way will it "benefit you to be home owners", because that's not actually a reason. If they're worried about credit scores, get and regularly use a credit card instead, or if you already do that then just keep doing that; people easily generate 800+ credit scores on credit cards alone. If you're the ones handling the maintenance and you just pay rent to your parents instead of mortgage payments to the bank, then you already have all of the "benefits" of home ownership (maintenance, lawn work, etc) without as much potential for financial ruin. Having your name on the deed (and the loan) wouldn't really give you any benefit here. If they're insistent that you need to be the one who buys the house and that they'll just provide the down payment, then they're not giving you some crucial information and you need to just say "no" because that's a hosed up situation to be in on a grad student salary. JibbaJabberwocky posted:Would there even be any sales costs if I just wrote over ownership to my parents? Yes, there would. You won't take the 6% hit that you'd normally take with real estate agents, but there are tons of little fees that you'd still have to pay (including all of fees and services that the bank requires, since your parents would be effectively creating a new loan) QuarkJets fucked around with this message at 21:05 on Jan 2, 2016 |
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Jan 2, 2016 21:03
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Just speaking from personal experience, I rented houses for several years before purchasing one, and at the time it was so tempting to see myself trying to work something out to try and buy the house. Both times I'm glad I didn't and instead separated out my house search so I could emphasize what I really wanted in a house instead of settling for the limited selection of what was available on the rental market. Not to mention that even though I was emotionally ready for home ownership then, I wasn't anywhere near financially ready. It's impossible to appreciate just how much of your money home ownership gobbles up until you've been there.
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Jan 3, 2016 03:41
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When I was in grad school I thought that it would be so rad to own a house, mostly because I had a friend in college who was able to buy a condo because of some big inheritance. But I'm really glad that I didn't, because financially it would have been a bad move even if the mortgage was the same as rent somewhere else.
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Jan 3, 2016 03:50
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Jibba, imagine how you and your parents will deal with it if, when the time comes to just sell the house back to your parents: A) the house has gone up in value a lot. Would they be happy paying you market value, if that means giving you a profit of $40k? B) the house has gone down in value a lot. Would they be willing to pay you what you paid, even if that's $40k more than the house is now worth? C) Serious repairs/issues arise right at the time you'd be selling the house to your parents. Who will pay for them, you, or them? Will you adjust the price being paid based on the costs? It's a potential source for a lot of hard feelings. It's one thing to simply make a one-and-done financial transaction with family: there's already stress there, but once it's done, it's done. It's another to make a big transaction with an understanding or expectation of another transaction taking place in two or three years, where market forces and happenstance can load tens of thousands of dollars of delta onto that future transaction.
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Jan 3, 2016 08:53
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I'm totally on the same page as y'all. I had a deep feeling of "bad idea" but wasn't really able to articulate what about that scared me other than the fact that many bad things could go wrong. I'm in a precarious position right now financially (to an extent, we do have savings) but if we took a big financial hit I couldn't pay my way through Grad school. I wont do anything to jeopardize that. Leperflesh did a good job explaining the issues inherent in the property actually changing hands so from my perspective renting from my parents would be the best idea and moving to another place (assuming we can get some wiggle room so we're able to make a direct move from one property to another) would still be less lovely than trying to buy this place, which, while not falling down around our ears, probably does have issues I don't want to deal with. I'd rather pay movers a couple hundred dollars at a set rate than unknown thousands of dollars into a sad little house.
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Jan 3, 2016 13:26
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A spot on my right on one year installed new quartz kitchen countertops have developed a small crack.  I have $4,200 worth of roofing work that needs to be done, included re-roofing the patio (which was leaking) as well as removing/roofing over the old platform for where the now re-located HVAC unit was, reflashing various vents/turbines that were shoddily done and since that stuff was going on I decided to have both my bathroom fan vents properly vented to the roof (per code) instead of just pointing out towards the soffit vents. My front yard still looks like the 2nd Battle of Verdun just wrapped up there yesterday, luckily only a few dead horses and undetonated ordinance still onsite. Budget too hosed to address yet. Backyard even worse. Status uncertain. I almost need to buy my @70 y/o parent's house just to kick them out of it and finally get it properly fixed up so we can sell it and they can gtfo of the lovely town they've been stuck in.
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Jan 3, 2016 18:03
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Can't think of a better place to ask this, but I'm planning on replacing the terribly inefficient electric water heater in my house with a natural gas model, and was wondering if anyone has any general brand recommendation advice or experience they'd be willing to share. I was looking at a 38 gallon/12 year Rheem unit if anyone has any advice before I dive into this. Thanks in advance!
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Jan 3, 2016 20:47
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Might try here too: http://forums.somethingawful.com/showthread.php?threadid=3131944
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Jan 3, 2016 20:50
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slap me silly posted:Might try here too: http://forums.somethingawful.com/showthread.php?threadid=3131944 Didn't even know that was there--thanks! Bookmarked for reading and I'll check over there too.
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Jan 3, 2016 20:54
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Is this the appropriate thread for discussing apartment/condo buying as well? My wife has it in her head that we should buy a unit in the city where we live (Philadelphia) because it's a "down real estate year" or whatever, and because her parents made her a verbal promise that they would loan us the money for a down payment. Her plan would be to rent it out in order to pay off the mortgage, and while she's convinced that this is easy money I have to imagine it would be a much more complicated and annoying process than what she's imagining, ignoring the fact that I would likely end up doing any and all work to keep the place up and running. I also think she's spent the majority of her "research" time looking at properties she likes instead of reading up on the actual process, are there any apartment or condo-specific guides out there?
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Jan 4, 2016 06:04
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Sure, why not. There's also this one: http://forums.somethingawful.com/showthread.php?threadid=3548312 If her parents are going to "lend" you the money, that basically means you need enough money and credit to buy it on your own without them. Do you even have that? That's the first question. Second, you definitely can't assume it's easy money. Most likely you will spend a shitload, or work your asses off, or both. Tote up all the expenses (condo fees, maintenance, vacancy) before you decide it's a good idea financially. And be aware of all the risks, like that the market will crash right before you need to sell, there will be a major assessment, the appliances will break, etc.
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Jan 4, 2016 06:13
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C-Euro posted:Is this the appropriate thread for discussing apartment/condo buying as well? My wife has it in her head that we should buy a unit in the city where we live (Philadelphia) because it's a "down real estate year" or whatever, and because her parents made her a verbal promise that they would loan us the money for a down payment. Her plan would be to rent it out in order to pay off the mortgage, and while she's convinced that this is easy money I have to imagine it would be a much more complicated and annoying process than what she's imagining, ignoring the fact that I would likely end up doing any and all work to keep the place up and running. I also think she's spent the majority of her "research" time looking at properties she likes instead of reading up on the actual process, are there any apartment or condo-specific guides out there? Yeah, you should trust your instinct on this one and not buy an investment condo with money borrowed from her parents. If a family member is going to loan you a down payment, then banks won't lend to you. A family member can give you the down payment as a gift, ahead of time, but it has to be an actual gift, not a wink-wink nudge-nudge "gift" that you pay back to them later; that's illegal, and if you try to do it anyway then you will get caught. Condos are really bad about not growing in value. From an investment perspective it's almost always a poor move. Any gains in equity that you do make are going to get thrown away on repairs and condo fees. The only possibility of pulling money out of this is getting the loan paid down and then sucking up rental income, but then you still have to be ready to take on the job of managing a rental condo. Condos are also subject to inconsistent monthly dues; there are countless horror stories where a condo association suddenly levies a big "special assessment" on all of the owners in order to pay for something big. This can be hundreds per month, completely out of the blue. Rental income is always a risky gamble. Could you afford to pay for the condo even if it was empty? If not, then you're taking a huge gamble. And yes, you will probably be the one who winds up having to fix poo poo when it breaks. lovely. If you can get her parents to pay for the down payment outright (not as a loan), and if you can get your wife to help out with repairs and management, and if you make enough each month to cover the mortgage, standard monthly fees, association fees, and surprise assessments without including rental income, then it could work out okay.
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Jan 4, 2016 06:30
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QuarkJets posted:If you can get her parents to pay for the down payment outright (not as a loan), and if you can get your wife to help out with repairs and management, and if you make enough each month to cover the mortgage, standard monthly fees, association fees, and surprise assessments without including rental income, then it could work out okay. Even if it did work out OK, it's probably not the best investment you can make with that money. You need to compare the risks and potential incomes/profits to the risks and potential incomes/profits available in other medium to long-term investment vehicles. It's likely that "the market" is efficient enough that the profit potential of investing in condos is already priced, by the market, to provide a similar risk-premium to other similar-risk investments. In other words, unless you have a very good reason to believe that you have identified an investment opportunity that most of the market doesn't know about, you should assume that your results will not be lucrative. You'll get, at best, a reasonable return on your investment commensurate with the risks involved, where "reasonable" is "what the multi-millionares and big investment companies think is reasonable, given the efficiencies they can take advantage of that you cannot." If that's still too obtuse, think of it this way: a big company or a wealthy investor probably buys 30 condos in several different cities, pays a property management company a fee to manage all of them at once, and, given the risk of that relatively diversified investment in real estate, is happy with an annualized 8% return over a period of 20 years. You, on the other hand, are considering buying into the same marketplace, but without the advantage of diversity, without the cost savings from consolidating management of many properties, without the income-smoothing effects from vacancies being randomized across many properties, without the tax loopholes available to corporations and the wealthy, and without the expertise and analysis tools available to them. So, your risks and costs are inevitably higher. So your investment income is probably lower, despite higher risk. That sucks. If you really want to add exposure to real estate to your long-term investment portfolio, why not just buy some shares in an REIT or two? All the costs are folded up into the performance of the REIT, you don't have to do any maintenance personally, it's vastly more liquid, it's vastly more diversified (geographically and quantitatively) than buying one property in one location, and the taxes are much simpler to deal with.
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Jan 4, 2016 07:37
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QuarkJets posted:If a family member is going to loan you a down payment, then banks won't lend to you. A family member can give you the down payment as a gift, ahead of time, but it has to be an actual gift, not a wink-wink nudge-nudge "gift" that you pay back to them later; that's illegal, and if you try to do it anyway then you will get caught. Yes and no on this point. The lender will require that they furnish a (legally binding?) letter that says the money is a gift and is not a loan, but if you pay them back after the fact in the manner of a loan, there's no actual checks on that. It may or may not be illegal, but it's pretty common.
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Jan 4, 2016 17:36
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baquerd posted:It may or may not be illegal, but it's pretty common. It is illegal. The common term for this is "fraud"
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Jan 4, 2016 18:00
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It's illegal but it's also really dumb for QuarkJets to say that C-Euro would get caught. There's plenty of reasons for that guy not to buy an investment condo without hyperbole like that.
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Jan 4, 2016 18:52
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Hashtag Banterzone posted:It's illegal but it's also really dumb for QuarkJets to say that C-Euro would get caught. There's plenty of reasons for that guy not to buy an investment condo without hyperbole like that. Also, the Head Shot is something you should avoid, especially when you post about it on The Interweb first. Otherwise it may come back to bite you years later: http://davidsimon.com/kwame-brown-another-federal-case-another-head-shot/
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Jan 4, 2016 19:37
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C-Euro posted:Is this the appropriate thread for discussing apartment/condo buying as well? My wife has it in her head that we should buy a unit in the city where we live (Philadelphia) because it's a "down real estate year" or whatever, and because her parents made her a verbal promise that they would loan us the money for a down payment. Her plan would be to rent it out in order to pay off the mortgage, and while she's convinced that this is easy money I have to imagine it would be a much more complicated and annoying process than what she's imagining, ignoring the fact that I would likely end up doing any and all work to keep the place up and running. I also think she's spent the majority of her "research" time looking at properties she likes instead of reading up on the actual process, are there any apartment or condo-specific guides out there? Basically the pitfalls are going to be tied into the condo board, a group of people that are usually well intentioned but they're human and unless their views on property management directly line up with yours there's going to be issues. When you boil it down the issue is that you've a building full of people and half of them are bitching that they're paying too much in condo fees and the other half are complaining that x, y and z need to be fixed. The end result ends up being a horse by committee approach where people with probably little to no property management, budgeting or construction experience are making major decisions for a multimillion dollar building while trying to satisfy everyone at once. I've lived in a condo a year and a half and its the worse decision I've made in my life and I can't wait to leave. They hire the shittiest contractors for every job and so everything gets half assed while I'm paying out the rear end for it, I spent three hours Saturday listening to our snow removal company try to get rid of packed in snow and ice in the visitor parking lot by driving a bobcat back and forth really fast and it looked exactly the same after those three hours.
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Jan 4, 2016 20:24
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Hashtag Banterzone posted:It's illegal but it's also really dumb for QuarkJets to say that C-Euro would get caught. There's plenty of reasons for that guy not to buy an investment condo without hyperbole like that. People get caught doing it all the time. It's called the headshot for a reason.
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Jan 4, 2016 20:31
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QuarkJets posted:People get caught doing it all the time. It's called the headshot for a reason. People also get away with it all the time.
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Jan 4, 2016 20:43
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QuarkJets posted:People get caught doing it all the time. It's called the headshot for a reason. People who are getting investigated for other things get caught for mortgage fraud. Have you ever thrown out junk mail addressed to the old owner of your house? Then you can expect a $250,000 fine and 5 years in federal prision.
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Jan 4, 2016 21:01
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Hashtag Banterzone posted:People who are getting investigated for other things get caught for mortgage fraud. I write moved and put it back in the box. The postman brings it back three days later and I repeat forever.
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Jan 4, 2016 21:45
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I'm closing today. God help me.
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Jan 4, 2016 22:11
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^^ God can't save you now. Otherwise, congrats! QuarkJets posted:People get caught doing it all the time. It's called the headshot for a reason. Yeah, if you're a crooked politician or mafia type with other serious but difficult to prove and prosecute offenses. Nobody gives a gently caress about Joe Homeowner, and sperging about abstract legal threats every few pages is just ridiculous, especially when there is plenty of relevant discussion regarding why buying a condo is a terrible idea. Catatron Prime fucked around with this message at 22:19 on Jan 4, 2016 |
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Jan 4, 2016 22:14
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Note to self, the post button is not the edit button
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Jan 4, 2016 22:17
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Statistically some of the people who read this thread will, in fact, be investigated for a crime in their lifetime and may well have to worry about things like that - it's not good advice that's mostly okay if the consequences are years in prison when it's not.
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Jan 4, 2016 22:23
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Basically the impression I'm getting is to put more effort into talking her out of it at least out of doing it anytime in the next 5-ish years. Thanks.
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Jan 4, 2016 22:30
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Drunk Tomato posted:Just had a bunch of family taking us that we need to be building equity, and we also got the whole "throwing away money on rent" BS. Same situation except including my spouse. I tried to have a conversation about moving closer to work and suddenly we're discussing six figure expenditures. If I knew when Amazon was going to offshore all its devs this would be easy. Also our only options price-wise are condos which I am less than thrilled about. Ugh. Thread subscribed.
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Jan 4, 2016 23:13
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With regards to "throwing money away" on not buying a house...even if the Seattle market is gaining 7-15% per year.... -It won't last forever. It never has, it never will. There will always be a crash at some point or at least a plateau. When the next tech crash happens, think of just how hard that will hit Seattle with foreclosures and short-sales, and what that will do to the value of the surrounding properties. -The S&P 500 has annualized gains of 8% over long enough period of time. -In general, you need to budget about 2-3% of home value per year for maintenance. There's a big haircut off the supposed advantage over investing in mutual funds. -If your mutual funds go down, you aren't prevented from moving. If the Seattle market crashes and you want to move to a different city or a different part of Seattle, too bad. I'd say just invest money in mutual funds and ignore people who talk about not throwing money away on rent. Real estate is not an investment if you are consuming your dividend by living there instead of taking the dividend by renting it out. It might double in value in 20 years, but you also may have paid so much in repairs, taxes, etc. by then that your gain is actually small or nonexistent. Hell, you could lose money in the long haul. That's not to say never buy (but never buy, kind of), it's just, buy if the price is worth it to you and you do seriously want to stay in that same place for decades. The big advantage of home ownership in my opinion is being able to do whatever the hell you want, within reason, especially if there's no neighborhood association (which is why I'm completely anti-condos nowadays). Nail Rat fucked around with this message at 23:23 on Jan 4, 2016 |
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Jan 4, 2016 23:20
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Elephanthead posted:I write moved and put it back in the box. The postman brings it back three days later and I repeat forever. Scratch out the address until illegible, drop in a blue box near your place of employ, hopefully in a different ZIP code.
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Jan 5, 2016 00:15
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minivanmegafun posted:Scratch out the address until illegible, drop in a blue box near your place of employ, hopefully in a different ZIP code. Then it's off to the auction house! Problem solved
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Jan 5, 2016 00:49
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MrKatharsis posted:Same situation except including my spouse. I tried to have a conversation about moving closer to work and suddenly we're discussing six figure expenditures. If I knew when Amazon was going to offshore all its devs this would be easy. probably this fall. they are expanding bigtime in vancouver and the dropping canadian dollar is only going to encourage them further
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Jan 5, 2016 06:34
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Nail Rat posted:People also get away with it all the time. So? "I might get away with it" is not a good reason to commit a crime that has a potential penalty of decades in jail. If you can't afford a bigger house then you can't afford a bigger house, lying about it in order to defraud the bank really doesn't help anyone.
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Jan 5, 2016 11:20
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Watching the Vancouver version of Love It or List it and this lovely suburban colonial is going for $2 million. Canadian dollar, sure, but that is ridiculous. I don't know how people deal with a market like that.
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Jan 5, 2016 13:45
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QuarkJets posted:So? "I might get away with it" is not a good reason to commit a crime that has a potential penalty of decades in jail. If you can't afford a bigger house then you can't afford a bigger house, lying about it in order to defraud the bank really doesn't help anyone. It's amazing how many people in this thread insist behavior that regularly results in felony convictions is not a big deal. There is no probability low enough to make the life ruining results worth it.
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Jan 5, 2016 14:18
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