|
greasyhands posted:It's a pretty consistent statistic that roughly half of high net-worth individuals utilize investment real estate. I guess they are all idiots who should be putting their money elsewhere? No, they're smart people who leverage their money to make more money. Low net worth people have to borrow, which radically changes the return on investment. The context of the thread is not centered around high net worth individuals.
|
#
¿
Feb 1, 2011 20:52
|
|
|
|
| # ¿ May 15, 2024 07:39 |
|
|
WorldTravelerX posted:Umm, I thought a definition of "leverage" was borrowing money to multiply your investment? That's one definition. Another, which I thought the context of my statement was pretty clear on, is taking your money and buying an asset which you then use to make more money. No borrowing. Or maybe defined loosely, borrowing from yourself. Bottom line is that anyone saying "real estate is a great investment" and then saying "because rich people do it" in the same sentence is completely missing the point of the negative advice in this thread, which is aimed specifically at people who would have to borrow to get into it. Without a good down payment, any profit you might make is wasted on interest. Again, rich people (banks) leveraging their money (loaning it to us with a house as collateral) to make more money (interest). LloydDobler fucked around with this message at 21:24 on Feb 2, 2011 |
|
#
¿
Feb 2, 2011 21:21
|
|
|
greasyhands posted:Yes, people who buy 1 house with a 3% down payment and subprime interest rates aren't going to be getting rich, We agree completely. greasyhands posted:but you don't have to be wealthy to put 30% down on a 150k house and use your equity to get into some rental properties and end up with a net worth well north of a million dollars in a pretty reasonable amount of time. Read back through this thread and see if there's anyone even remotely close to this kind of financial situation posting in it. The closest one I found was going to be gifted $40k and then talked of taking out an unsecured federal loan that can't be discharged in a bankruptcy to make the payments on his secured loan. The people saying DO NEVER BUY aren't being naysayers in general, they're talking to specific people. People who barely have 5% saved up, and think they're going to profit by becoming homeowners. Or people to whom a relative says "Take my $20k and my co-signature to buy a starter home to get you on the road to financial success" with none of the reality to go along with it. The advice in this thread is about doing math and dispelling myths more than actually discouraging real estate as an investment. You're clearly correct when you say real estate can be a good investment, but it has to be qualified with the right circumstances. It's just not a universal truth, and it's untrue for young people living just above month to month, or people who "will have their debt paid off in just a few more years". This isn't really a disagreement as much as we're just talking about two very different things.
|
|
#
¿
Feb 4, 2011 08:39
|
|
|
Stunt Rock posted:The mortgage payments would only be $250 a month. Stunt Rock posted:There is no mortgage. I'd be buying it straight up in cash. ? If you can buy it with cash and rent a room for $400 a month, you can live there for free or the cost of maintenance. This is the opposite of a bad financial decision.
|
|
#
¿
Feb 15, 2011 21:40
|
|
|
It's only a terrible idea because she obviously has a history of using other people's credit to make bad decisions. Tell her the internet says to just rent a place somewhere until she has the down payment saved up. If she can't afford to save a down payment, she sure as hell can't afford the maintenance on a house.
|
|
#
¿
Mar 29, 2011 23:01
|
|
|
Dbhjed posted:Does any one have a good argument for: In addition to what's already been posted, ask them how long they really want to live where they bought. If they say anything less than the full 30 years then they're fudging the numbers to justify their decision, and they should redo it for the term they say, like 5 or 10 years. In that scenario your down payment should give you an advantage, because the sunk cost of the interest will be greater than the 2 years of rent.
|
|
#
¿
Apr 12, 2011 23:22
|
|
|
Chuch posted:This is me one month ago. A bunch of dudes took 6000 bucks from me so I could have cold air again. In 2008 a bunch of dudes took $4500 from me so I could have cold air. In 2009 they came back and took a bunch of money from me to replace the refrigerant that bled out of the brand new system. In 2010 they came back and took more money to replace more refrigerant and tell me that my warranty will only cover half of the bill to stop the leak, which is still a bunch more money. I paid for just the refrigerant and the same large bill is coming up again soon. Also I'm in year 17 of a 15 year furnace. Just waiting for that one to conk out. Do never buy. Do never buy. Do never buy.
|
|
#
¿
Apr 23, 2011 07:34
|
|
|
My first house was a fixer upper. Somehow it must have been built by someone who ran a concrete sand and gravel company. Built in the 20's, it was on a concrete slab with cinder block walls. All the walls, inside and out, were cinder block, with chicken wire and plaster for finish. The only wood in the house was in the ceiling, and the trusses for the attic, and 1x8 tongue and groove for the sub-roof. The previous owner was an old woman who passed away, and had lived there alone for a long time. The walls were stained with dirt, like a smoker lived there, but there was no smoke smell. There was, however, cat piss smell. She had just let a cat use the corner of the living room as a litter box. Also, the attic had no insulation in it, just a four inch deep layer of gravel between the roof joists, and she let the cat up there too. The entire attic was a cat box. Fortunately it didn't stink after we scooped out all the turds with a kitchen strainer. The inspector rated it R4 so that our attic blanket would bring it up to code. The plumbing was all laid down on the slab, and then a 4 inch layer of concrete was poured over it. So for my water heater, it was just a pair of copper pipes sticking out of a concrete floor. The carpet was all 40 years old and pumpkin colored, worn down to the weave in the traffic areas. There was one wall mounted gas furnace in the living room, and it had steel frame windows with single glass panes. There was a flower box built with cinder block, against the house, right outside the front main window. The cinder blocks were not sealed well, so watering the plants for 80 years had seeped in and caused the rebar to rust, popping the plaster off the inside living room wall. There was a roof leak over the 2nd bedroom, so it was moldy, musty, stinky, and had mushrooms growing in it. We put rennovations on a credit card and busted our asses for three years on this shithole. We paid a roofer to redo the roof, and he lost his rear end on the job because not only was there 3 layers of composition, but a 1-1/4" thick layer of concrete over the 1x8 boards. The original roof was concrete, and previous owners put shingles over it. Normally a house my size would generate 3 tons of waste. He had to pay to dispose of fourteen tons. He didn't charge me more, but he sure didn't make any money on the job. We had the entire house re-carpeted. Of course when they did the carpet near the water heater they bumped the pipes coming out of the floor. I woke up one morning as we were trying to sell, to a fully soaked and saturated bedroom. That meant pulling up the carpet, jackhammering into the floor to replace the copper pipe, and then laying new concrete over it. And we paid to have the carpet dried out and all that. The jackhammering caused a second leak to appear 10 days later. This one was caused by whoever laid the pipe decades prior. They apparently ran out of elbows so they decided to bend the pipe over their knee before laying it in the floor. So it was kinked, and the jackhammer cracked it at the weak spot. The bathroom had no fan or vent so it was super moldy, that never quite went away. Roots had killed the sewer pipe, we had to have that all snaked out, on and on and on. Doing all that work netted us about a $12,000 profit when we sold it. The increase in monthly bills, interest, and PMI for 3 years over my apartment was about $30,000. As in, it cost almost $1000 a month more to own that house than to rent. I didn't realize until about a decade later (recently) that I lost 18 grand, the whole time I was thinking I profited. The only nice things about that house were that it was cool in the summer and quiet as gently caress, due to its retarded construction method. Do. Never. Buy. LloydDobler fucked around with this message at 07:56 on Apr 28, 2011 |
|
#
¿
Apr 28, 2011 07:47
|
|
|
dalstrs posted:I have a question about buying, hopefully someone here can help me out. A friend of a friend is going into foreclosure on their house (being auctioned next month). They have told us they will sell me the house for what is left on the mortgage. She says that they owe $100k on the loan, but the bank has added $12k because they didn't complete the Obama mortgage assist program, and lawyers for the bank are saying there is another $13k that I am not sure what it is for. I have seen that you can negotiate with the banks to get a lower price when buying a house like this and wanted to see if anyone had advise on the best way to approach the lawyers to get the lowest price out of them. Also any other information on how sales like this work would be appreciated. Why in any universe would the bank sell you the house for $100k when it's worth $165k on the open market? Why aren't your friends selling it and pocketing $40k-$60k, depending on whatever these fees are? Something about your story doesn't make sense. LloydDobler fucked around with this message at 06:49 on May 9, 2011 |
|
#
¿
May 9, 2011 06:46
|
|
|
senor punk posted:To add to the DO NEVER BUY discussion. I think it was Leperfish that summed up the sentiment well. It's not that nobody should buy houses, it's just you should really think a lot longer and harder about the decision if you are a first time buyer like many of us here. Exactly. It's not that nobody should ever buy, it's that the SA demographic should never buy until they get out of college and get their poo poo together. This thread is a counterpoint to the misinformation out there that says owning is always better than renting, houses always increase in value, and that there is a "housing ladder" that is imperative to start climbing.
|
|
#
¿
May 9, 2011 19:55
|
|
|
On the application it says to list your assets. Then at the end of the application it says do you swear that what you wrote here is true? Doesn't get any more black and white than that. And yeah lying on a contract won't necessarily get you thrown in jail, but can sure as hell get you sued/forclosed/punished. Make the counter argument "hey why don't we just list their cars and houses and all the rest of their poo poo as my assets on the application as well?" And of course I'll second what TraderStav said: if you're doing it to increase your buying power, it's a stupid loving thing to do because after you get the loan you still only have the lovely buying power you actually had.
|
|
#
¿
May 15, 2011 04:45
|
|
|
FISHMANPET posted:Or you could do like nelson does, get a low rate at the front, prepay the poo poo out of it, and then have tiny minimum payments every year, just in case you get in a short term bind. If you can prepay, then yes. But the biggest problem with the whole ARM issue is that it's just like the rest of American culture. We shop payments, not cost, and start at the biggest payment we can afford without doing any math beyond that. That's a huge mistake. Say you do this, you do an ARM and pay on it for 5 years without paying ahead, then rates threaten to go up so you refinance into a 30 year. Your amortization clock starts over, and 5 years of interest heavy payments go right into the toilet. So you're basically speculating on interest rates going up, but they have to go up a fairly large amount for it to cost you more than 5 years of front loaded interest. I just did this myself, and it was only after I signed the papers that I started to do the math. Interest rates will have to go up several points because I spent about 45k over 4 years on interest, and if rates don't go up at all, the new mortgage will cost me about $27k more than if I just stuck with my ARM. In effect, I got a 34 year mortgage that reset the amortization at year 4. The whole "just refinance if rates go up" is another piece of "conventional wisdom" that turns out most of the time to be a loving lie designed to sucker you in to a bad decision.
|
|
#
¿
Jun 6, 2011 20:34
|
|
|
SlapActionJackson posted:Looking at the sum of payments on a 35 year ARM-then-fixed scenario and comparing it to a plain 30 year fixed scenario is not really informative. You need to calculate the NPV of both scenarios for an accurate measure of their relative cost. Correct, but that's not how they're marketed, and suckers like the former me don't know that. I was sold an ARM with "If you get an ARM your payment will be lower and you can get a more expensive house, then if rates go up or you make more money just refinance it then!" Then I got "hey rates are going to go up, dump that ARM and refi into a fixed!" Then I did the math, albeit on my situation specifically. Fortunately I was at least smart enough to buy way less house than I qualified for, so it hasn't been a hardship and I weathered a 7 month unemployment back in 2009 without losing everything I own.
|
|
#
¿
Jun 7, 2011 20:09
|
|
|
Looking at that, with how much they're pimping how FAST they can buy your house, my assumption is that they will absolutely gently caress you over on the price. Maybe worth checking out, maybe not. They'll probably try to high pressure you, which is always a ripoff red flag. ---- I learned something new today, if you have a first and second mortgage, and you refinance the first, the second mortgage will become listed as the primary mortgage. If the new mortgage wants to be the first mortgage, you will have to sublimate the second mortgage, which carries a fee. I've had a $200 fee on my 2nd mortgage statements for almost a year now, and never even noticed it because I'm on autopay. And nobody through the entire refinance process warned or informed me of this. Fortunately it's not something that will ding my credit or anything, but as someone who prides himself on being thorough with his bills this one caught me by surprise and has left me feeling embarassed. Check and understand your statements every month, and DO NEVER BUY.
|
|
#
¿
Jun 11, 2011 01:46
|
|
|
ZippySLC posted:Houses carry a lot of financial risks, but I will say that there is something great about *owning* something of your own and being able to do (nearly) what you please with it. I think that's the whole point of this thread. There are benefits to owning a house, they are just seldom financial. Especially for the demographic reading this forum.
|
|
#
¿
Jun 15, 2011 20:12
|
|
|
Hell, when I was 20, just renting an apartment with my best friend for 6 months was enough to ruin the friendship. We didn't talk for like 2 years after that. I can't imagine how horrible it would have been if we bought a house.
|
|
#
¿
Jul 4, 2011 18:44
|
|
|
So far I have an additional $770 in service calls on my a/c which was installed brand new in 2008 ($4500). Every winter all the refrigerant leaks out. I won't know until next year if they finally fixed it, but the dude was pretty sure. Then again so was the guy who installed it, and the first guy who came out to repair it, and also the second guy. The stupid part is that it's still cheaper than their god drat protection plan would have been for 3 years. DNB.
|
|
#
¿
Jul 6, 2011 19:26
|
|
|
skipdogg posted:Just the word Condo makes me shiver. All the drawbacks of both apartment living and home buying and none of the benefits. Nonsense. No yardwork No snow shoveling or plowing Low cost of entry Shared walls lower heating/cooling bills No restrictions on interior decorating or remodeling Equity Security from eviction Just because a condo isn't right for you doesn't mean it's not right for anyone.
|
|
#
¿
Jul 11, 2011 18:04
|
|
|
I was replying to a post that said there are none of the advantages of apartments or houses in a condo. I listed some. That's all. You can keep listing the disadvantages, and you're not necessarily wrong, but everything has advantages and disadvantages. Condos are NOT a pile of cons with no pros. And HOA eviction is a downside of an HOA, not of a condo. If you follow the rules of your HOA which you agree to before you move in, you have zero risk of getting kicked out of your condo. Not true with apartments or even rental houses. LloydDobler fucked around with this message at 17:54 on Jul 12, 2011 |
|
#
¿
Jul 12, 2011 17:52
|
|
|
flyboi posted:my dad gave me money towards a car. we just did 12k in December and the rest the following year. flyboi posted:he's a cheap rear end What the gently caress? You owe your dad an apology right loving now.
|
|
#
¿
Aug 2, 2011 19:35
|
|
|
Guess who makes up mantras like "if you can afford it, buy" ? Here's a hint: It's not people who buy houses or people who can do math. The big question is whether or not you have a good down payment. If not, just closing costs (remember, you have to pay these when buying and selling) and maintenance will probably take away any profit you might have, and you'll end up paying more than if you just rent. Remember, interest is throwing money away too.
|
|
#
¿
Aug 12, 2011 22:45
|
|
|
MH Knights posted:Fixer upper Roofing and a water leak doesn't make it a fixer upper. Mortgage calculators lie. You also need a bunch of money up front for inspections and the like, and you'll need to pay mortgage insurance if you have less than 20% down. If you have great credit you can do an 80/20 split but the money you save in mortgage insurance will be spent on a higher interest rate for the second mortgage. Get your 15k school debt paid off, get $20k in the bank, then start house shopping. Alternatively, save up the 20k now if your school loan rate is really low, like under 3%. If you can't find a way to save up $20k then you probably can't afford to fix the house anyway, and you'll live in a shithole for a couple years until you get pissed off at it like I did for my first house.
|
|
#
¿
Aug 30, 2011 19:30
|
|
|
Froglin posted:He said he is willing to leave the mortgage as-is IF it's the only possible way I can stay here. I'm thinking there's got to be a way to arrange a "rental contract" between the two of you, just so it's all official and legal through the divorce, with both of you protected from the shenanigans that eventually crop up when people get farther down the road. Basically something like you agree to pay his half of the mortgage as rent to him, and he owns half the equity or liability when the time comes to sell it. As of now he's exposed anyway, so at least that way he'd have a chance of some profit if the market turns around. On the other hand there could be tax filing headaches because in effect he'd have a zero profit investment property, and you'd have to divide the interest deduction or something. Might be worth talking to a lawyer about, it shouldn't be too hard to draw up an agreement like that which covers all the bases and gets you what you want.
|
|
#
¿
Sep 6, 2011 22:03
|
|
|
Thwomp posted:Can someone give me a rundown of what goes into refinancing? I just bought my house in April at 4.875%. I don't know if it's too soon to refi or if I'm qualified. I know I'll need my home to be worth at least how much is owed on it but what else goes into whether or not I can pursue refi? Is it even a good idea for someone who only just recently purchased a house? It's just a math problem, does the new loan save you a substantial amount of money after you consider the refinancing costs? Are you just asking because you hear people talking about refinancing or what? It's doubtful that you will find or qualify for a dramatically better loan within 5 months of taking out your current one, unless your situation has changed in a really big way.
|
|
#
¿
Sep 20, 2011 19:22
|
|
|
Quick summary of my experience. Back in 1994 I bought an $80k fixer upper, put tons of work into it and sold it 3 years later for $26k more than I paid for it, a gain of 32%. I borrowed $10k to repair it, so I walked away with $16k in "profit", a 20% return. So 7% or so annually. My monthly rent before the house was $450. In the house, my monthly bills increased about $900, due to now paying a mortgage, mortgage insurance, gas, electric, garbage, water, sewer, taxes, cable, all the things that I didn't pay (or were way cheaper) when I rented. This doesn't even include non recurring bills like buying a lawnmower or a washer and dryer, or plants for the yard. So when you add it up, I spent about $32,000 to earn that $16,000. If I had just put the $900 increase in the bank for 3 years, I would have had $32k and wouldn't have had to lift a finger to do it, nor would there have been any risk or stress. I didn't know I would bring the value of the house up, I could have just as easily lost my rear end on the deal. I would have been vastly richer and happier staying where I was. "Rent is throwing away money" is a lie perpetuated by the real estate industry to fool people into buying when they shouldn't. LloydDobler fucked around with this message at 05:59 on Sep 26, 2011 |
|
#
¿
Sep 26, 2011 05:56
|
|
|
Leperflesh posted:So: of the (in my opinion very few) reasons why someone would be better buying a condo than a house, the particular one you cited isn't, really. Sure it is. The kind of person who doesn't want to care for the exterior really doesn't care. Your mistake is in assuming that he has a desire to participate in exterior design. If he's like me, it's 100% unappealing, and I'll gladly subcontract that job to my HOA. You see the landscaping committee as a negative, I see it as a positive. Never mind that the landscaping rates for a community are vastly lower (per resident) than a private residence.
|
|
#
¿
Nov 2, 2011 06:41
|
|
|
Leperflesh posted:I'm pretty sure taking out a loan in someone's name, without their knowledge or consent, is blatantly fraudulent. Your girlfriend needs a lawyer. It would at least have involved them forging her signature multiple times. Is she sure she knew nothing about it? Did they get her to sign under false pretenses, like they told her she was only co-signing, or signing for something else entirely? Definitely hire a lawyer. It's amazing the things people will do to their own family members. Stuff like this is why you never do business with family or friends. You feel a lot worse when you put family in jail for forgery.
|
|
#
¿
Nov 8, 2011 21:01
|
|
|
I just imagine you having endless trouble selling it when the time comes, because it's a regular house but the land is co-owned. That's going to scare away a lot of buyers. The builder really screwed up in this case.
|
|
#
¿
Jan 20, 2012 21:13
|
|
|
Yeah, I budgeted 2 months overlap on purpose when I bought my current place. I spent 6 weeks remodeling, and 2 weeks moving, so I was able to put things away as I brought them in. The moving process was pretty painless because of it. And I had an extra 2 week buffer on the remodeling if I needed it. Highly recommended if you're doing anything like painting or counters or appliances.
|
|
#
¿
Mar 12, 2012 19:58
|
|
|
Yeah, if the furnace dies in year 3 of your 5 year stay, you just shot the break-even point out to about year 10, which is just in time for the carpet and roof replacements to bump it to year 15 or 20. Even if everything went perfect and you saved a tiny bit of money over renting, is it worth the risk?
|
|
#
¿
Mar 21, 2012 20:08
|
|
|
daggerdragon posted:maybe once in awhile you run a rag over it to clean it, Maybe? loving goons.
|
|
#
¿
Apr 16, 2012 19:47
|
|
|
Just to add my 2 cents to counter the anti-condo/townhouse vibe - I absolutely love my suburban townhouse. The pros for me: I have full control of the interior decorating, I gutted the bathroom and half the kitchen when I moved in, repainted every surface in it, replaced every fixture and piece of hardware, redid all the electrical sockets and re-oriented a couple of the doors so they open in a way that makes more sense to me. It's tiny, which means I can clean it top to loving bottom in about an hour and a half. I'm a single dad for now so all I need is room for me and my kid. I'm a car guy, and it has a 2 car attached garage, which is great. If I ever move it will be to get a 3 or 4 car garage. The layout is great both for insulation properties and for minimum neighbor infringement. My common wall puts my bedroom against my neighbor's patio, both my bedroom closets against my neighbor's living room, and my daughter's room is against a bathroom and neighbor's garage. They were really smart to make it so the types of rooms that are common wall are opposite use, and seldom occupied at the same time. I play movies cranked up to 11 and none of my neighbors have ever even heard me let alone had a problem with it. It's well built, all the walls were dead square and on exact nominal sizes so remodeling was a piece of cake. I ordered my kitchen countertop 1/8" short just to make sure it would fit, and filled the tiny gap on each end with caulk. I laid my bathroom tile against one wall and I didn't have to trim any tiles or fill gaps with grout along the front of the tub or the opposite wall. I took the doors off for painting and didn't mark or organize them, and they all fit right on the hinges and frames no matter where I re-hung them. It's also well insulated so I didn't even use heat for most of the month of April. My gas and electric bill was $58 this month. Worst bill I've ever had was $130. My friends break $300 in their apartment regularly. In the summer my a/c can chill the whole house down to 72 degrees in about half an hour, and is cheaper to operate than the gas heat in the winter. I have grass and tree allergies, so I despise yardwork. Yet if I want to change something, I just ask the HOA and if they approve they just sic the landscapers on it. I had a bush that was too close to the house and the entrance of my garage, and it was alive with insects and bees during the warmer months, making it very annoying in my garage. I had to roll my windows up before pulling in or I'd get 2 or 3 bees in the car as I parked. I asked and a week later the lanscaper was ripping it out. The HOA actually thanked me because as soon as the bush was out they could see that it was damaging the siding. My HOA is very active and proactive, so they are on top of repairs but are also very budget conscious. I get a lot for my HOA fees, including water, sewer, garbage, snow removal, landscaping, and insurance on the roof and structure of the building (drywall in is my responsibility). The HOA has a hard limit on how much it can raise fees annually and they have never even come close to it although fees have gone up from $156 to $203 in the 6 years I've lived here. So I live in a cheap, quiet, well maintained, nicely decorated to my exact tastes, non-bothersome townhouse with decent neighbors. My costs are controlled and I'm very content. It has cost me more than renting but it's a luxury worth every penny, and it's significantly lower cost both monthly and in purchase price than a comparable house in my area. In my experience at least, it has many of the pros of home ownership, and many of the pros of apartment living. It's not for everyone but it's definitely for me.
|
|
#
¿
May 1, 2012 07:20
|
|
|
What's really scary about mortgage calculators is when you have friends who are terrible at money management with horrible credit. Then they're told they can afford a $200k house so they start shopping. They ended up in a house that needs all new windows and all new HVAC, but they have not a single penny left to do it. I've tried to coach them but there comes a point where you risk losing the friendship because you're pointing out stupid mistakes over and over. I love them to death, they're great friends, but the way they spend is like watching them step on a rake and smack themselves in the face over and over and over.
|
|
#
¿
Jun 18, 2012 21:23
|
|
|
Baronjutter posted:maybe 5 years down the line we could upgrade and maybe even make some money selling it after we've made it nice. Definitely do some math on this - just continuing to save for the next 5 years will likely net you vastly more money than any potential profit on a fixer upper, once you subtract out carrying costs and the transaction costs on both ends. The common refrain in this thread is that starter homes are a myth, again perpetuated by the real estate industry. Usually, the only people that profit on a starter home are realtors. Just save up for your perfect place, and then buy it once you can afford it.
|
|
#
¿
Jun 19, 2012 06:28
|
|
|
Lord Of Texas posted:
Do the math, find out exactly how much more interest you'll pay on a 30 year paid in 15 vs a 15, using the rates you're quoted. Think of it as an insurance policy, and decide whether or not it's worth it. Also compare the difference in monthly payments to see if it's really that big of a hardship to cover the larger payment in a crisis.
|
|
#
¿
Aug 7, 2012 21:13
|
|
|
tiananman posted:The seller caved and we're getting the price we want, she's covering closing costs and I'm honestly really happy with how the negotiations went - we really squeezed her pretty hard - got her down an additional 5% below her "max pain" point a few weeks ago. Yes, and playing hardball solved it. Whiners never have the spine to stand up to people pushing them around and that's why they whine. In my case, it was the opposite scenario as yours, I was the seller and the buyer wanted me to do a repair to which I said no. We were painting so most of the house was disassembled during the showing, but we disclosed exactly how everything was going to be finished. One of those items we fully disclosed was that we had removed and discarded the closet doors and had no intention of replacing them. My ex had a thing about closet doors, where she thought they were stupid and unnecessary, and me being a dutiful husband who had more important things to fight about, simply agreed and that was that. So this guy walks through our half gutted house for about 30 minutes and makes an offer. He did try to amend the purchase contract with a clause about replacing the closet doors, which we simply refused, and he caved. He never looked at it again, and we met and closed on the closing date. The escrow officer hands us the check for our equity and the buyer asks "so can I have one more walkthrough today?" To which I replied "It's your house, you can walk through it all day every day from now on." I was a bit confused but quickly figured out what was coming. He went to the house which was now completely finished and later that afternoon we got a call from our realtor indicating that because there were no closet doors on the house he was stopping payment on his check, or was somehow otherwise halting the deal until this grievance was settled. Keeping in mind this was a tiny 3 bedroom 1 bath house, this guy was ready to back out on a signed and closed deal over 3 interior doors which we had made clear in writing were not going to be included in the sale. The key to all negotiations is knowing how much power you have. I actually had 6 weeks until I started school, which is why I was selling and moving. He had told our realtor that he wanted to move quickly because he was going through a divorce and was still living with his soon to be ex wife. So I told our realtor he can have his closet doors but it's going to take me 6 weeks to get them installed. Ten minutes later he called back telling me to never mind.
|
|
#
¿
Sep 28, 2012 21:27
|
|
|
Just to be clear, you're comparing the monthly mortgage payment vs monthly rental cost, and that is not where the math lies. You need to add up the sunk costs that everyone is mentioning, including your total interest payments, and compare that to the hard cost of 36 months of rent. You will not have any significant equity after 3 years and you will add to that any maintenance and fees and taxes and insurance and commissions. It's almost always a losing bet. Hell, I have a high interest subprime second mortgage that I've been paying on for 6 and a half years, and I've touched four percent of the principal. It really does come off slowly, and the possibility that socal house values could drop another few percent in the next 3 years (which would mean you lose your principal payments) isn't something you should casually brush aside. Sample: Say you find a new rental for $2500 a month. $2500 x 36 months = 90,000. It is really likely that your monthly interest payments plus all your extra costs and fees will exceed that over a 3 year period. Extend the period, renting begins to lose. It's not the decision to buy that is the problem, it's the term. LloydDobler fucked around with this message at 22:48 on Nov 27, 2012 |
|
#
¿
Nov 27, 2012 22:44
|
|
|
FCKGW posted:I've paid about $18k in mortgage payments my first year of home ownership so far an my principal has gone down $3k. Quoting for emphasis. I love everything about my condo but financially it was a terrible decision. I did zero down with an 80/20 split 2 years before the crash, so I'm 7 years in. $86k in payments, $7k of which went to principal. Zero equity due to the crash. I consider myself lucky to not be underwater. I will never buy again without a minimum of 20% down.
|
|
#
¿
Oct 30, 2013 21:41
|
|
|
I'm glad you guys pointed that out, because "the interest is tax deductible (therefore you get it back)!" is the second biggest piece of false logic/industry misinformation after "you're throwing away money on rent!" It's right up there with "I don't want a raise because I'll take home less money in the next tax bracket". Before you can do the math, you must first understand the math.
|
|
#
¿
Nov 14, 2013 22:55
|
|
|
|
| # ¿ May 15, 2024 07:39 |
|
|
Pudgygiant posted:What's the general consensus on condos? I'm not ready for a full-on house but I'm in a job and area I can see myself staying in for at least a few years, and it'd be nice to be paying myself instead of an apartment complex. I can get something fairly comparable to my apartment and drastically lower my monthly payment (or keep it about the same with a 15yr) even including HOA fees. Am I missing something obvious? Do you have a down payment? If not, keep renting. Buying with a low down and only living there for a short term means that even if you're lucky enough to get a tiny bit of equity, you waste it all paying the realtors when you sell. Plus you assume the risk for all repairs, so renting is almost always the better option for a short term. Also, if you can't afford to rent and save up a down payment, you really can't afford to own.
|
|
#
¿
Feb 18, 2014 02:03
|
|