Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 06-23-2011, 11:30 AM   #81
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
calmloki's Avatar
 
Join Date: Jan 2007
Location: Independence
Posts: 5,459
As it turns out we bought a house at an online real estate auction last year and moved in and spent the winter starting in November. We paid 75% of it's sale price when built new in 2003. A house identical on the outside to our new purchase sold on the open market in April 2011 for about 30% more than we paid. Our new house took some yardwork and paint and such - haven't bought a place yet that we didn't have a better idea than the prior owners about color or door swing or stamp our brand on it in some way. We brought lots of old rugs with us and bought all new (to us) furniture and such.

Utility costs could be lower because we are out of temperature extremes, but having two house utility bills makes them higher.

It costs money to drive 1100 miles one way to the second home.

It takes a few days to wake a house up.

Big positives for me? I bought the exact same memory foam mattress that feels great for both places. I've cooking gear, water pic, electric toothbrush and clothing ready for my use at both places. The rugs and art and furnishings in both places are of our choosing - not the Marriot's. I was walking around at dawn in my skivvies - or not - by the pool under a bright blue sky in February and sleeping cool in Oregon when it was 89 degrees at 11PM in La Quinta.

Are all decisions financially driven?
__________________

__________________
calmloki is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-23-2011, 11:43 AM   #82
Thinks s/he gets paid by the post
BunsGettingFirm's Avatar
 
Join Date: Jan 2004
Posts: 1,502
Quote:
Originally Posted by calmloki View Post
Are all decisions financially driven?
Damn it, Calmloki. You and Tryan are supposed to be the Yodas of investment properties. Please get back to our regular programming of spreadsheets and numbers. LOL.
__________________

__________________
BunsGettingFirm is offline   Reply With Quote
Old 06-24-2011, 10:49 AM   #83
Recycles dryer sheets
slingshot's Avatar
 
Join Date: Jun 2010
Location: Scottsdale
Posts: 57
Not intending to hijack thread here but I have a question
What about buying a property for cash and then seller financing OAC at about 7%? Anybody doing this?
__________________
slingshot is offline   Reply With Quote
Old 06-24-2011, 12:00 PM   #84
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 5,717
Send a message via Skype™ to kcowan
Quote:
Originally Posted by Nords View Post
...We're especially cynical about sensitive to hyperbole like "secure".
and any claims that any class of investment never goes down!
__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Old 06-24-2011, 02:39 PM   #85
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,450
Quote:
Originally Posted by slingshot View Post
Not intending to hijack thread here but I have a question
What about buying a property for cash and then seller financing OAC at about 7%? Anybody doing this?
I am also interested in something like this. My concern is that paying two sets of real estate transactions would really cut into your profit margin. How do you avoid that?
__________________
clifp is offline   Reply With Quote
Old 06-24-2011, 04:56 PM   #86
Full time employment: Posting here.
arebelspy's Avatar
 
Join Date: Apr 2011
Posts: 625
Quote:
Originally Posted by slingshot
Not intending to hijack thread here but I have a question
What about buying a property for cash and then seller financing OAC at about 7%? Anybody doing this?
That'd be an interesting way to make some money in real estate without having to be a landlord, provided you can find a decent investor. May not bee to hard because of how tight the credit market is right now.

Should have a solid return if you researched into the area and the homes are undervalued versus their rents.

Not to mention you can sell not just to investors but to those looking to purchase for themselves but unable to qualify right now because of the strict standards (new couple with no credit, etc). Would have to weigh that risk carefully, and I'm not sure it has a ton of advantages vs REIT.

Got me thinking though, thanks.
__________________
arebelspy is offline   Reply With Quote
Old 06-25-2011, 11:56 AM   #87
Recycles dryer sheets
slingshot's Avatar
 
Join Date: Jun 2010
Location: Scottsdale
Posts: 57
Quick confession...we sold some bare land this way 2 years ago as the folks trying to purchase were small biz owners and could not qualify for a traditional loan (as they have a good accountant and he makes sure they are not showing too much income so they don't pay too much in tax).
We have been getting checks like clockwork and they are due to refinance in 3 years, giving us a lump sum balance.
I don't wish to be overconfident-but I want to do this again!
Since my first foray was pure dumb luck, I'm looking for criticisms, critiques, the devils advocate folks who can point out the down side.
What about the future value of money calculation? How does that play in?
__________________
slingshot is offline   Reply With Quote
Old 06-27-2011, 11:56 PM   #88
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Posts: 1,648
Quote:
Originally Posted by chinaco View Post
If you intend to keep an eye on it and it begins to look really good... alert the rest of us.
Don't know if I'm officially alerting you chinaco...but I did make an offer today. Price dropped 30K last week-end. Offered 73% below new list price..roughly at 50% of the 2005 tax assessment value (which is the so called "current assessment")....which we all know is not current.

Ran my own comps for current sales (as best I could), took note of what rental machines on ocean front were selling for. This property is on the sound...which we prefer.

Unique property on a unique piece of real estate with water views on 3 sides, Custom built in 2005 (not a salt box thrown up during the boom) Single family house on a cul de sac...easy access to everything,...$300/year HOA to maintain the common road (no monthly HOA fee)

Proven rental income for 2009 and 2010 (bank owned it in 20011 so could not be rented.) Income will just about pay for all expenses including mortgage and interest...(may have to kick in some...depending). 30% down ...may go to 46%.

Yearly rental income is 9.2% of the price I offered (rental income could go higher).

Bank owned....so it is likely they may reject the offer. I won't go much higher..if at all.....as it is not a good business decision ..at a certain price.

It is a place my husband and I could retire to ...if we wanted to in about 8 - 10 years.
__________________
sheehs1 is offline   Reply With Quote
Old 06-28-2011, 10:41 AM   #89
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,850
Sounds like a lovely property, sheehs1. Good luck!
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 06-28-2011, 01:26 PM   #90
Thinks s/he gets paid by the post
BunsGettingFirm's Avatar
 
Join Date: Jan 2004
Posts: 1,502
Anyone gave any thought to managing the business remotely especially those who are buying in las Vegas? Tryan tried it a while back and said that having a property manager really ate into his profits because the manager would call the plumber at the drop of a hat.
__________________
Got retiree health care through your company? What if the company goes bankrupt? Retire and go RVing full time? RVs are not structurally sound. You'll die in a fiery crash. Retire and live overseas? What if you die? Aren't you worried about your body? No, I don't think I will be able to seeing how I am dead.
BunsGettingFirm is offline   Reply With Quote
Old 06-28-2011, 01:41 PM   #91
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,384
Quote:
Originally Posted by slingshot View Post
Quick confession...we sold some bare land this way 2 years ago as the folks trying to purchase were small biz owners and could not qualify for a traditional loan (as they have a good accountant and he makes sure they are not showing too much income so they don't pay too much in tax).
We have been getting checks like clockwork and they are due to refinance in 3 years, giving us a lump sum balance.
I don't wish to be overconfident-but I want to do this again!
Since my first foray was pure dumb luck, I'm looking for criticisms, critiques, the devils advocate folks who can point out the down side.
What about the future value of money calculation? How does that play in?
You do have to know what you are doing. A guy sold the 10 acre lot behind me at my former address to someone who bought it with his corporation, a small down payment and a note with inadequate conditions.

So the buyer immediately punched in a road, logged the land of it's biggest asset- mature standing timber- and defaulted on all subsequent payments. The seller got his land back, but it was an unhloy mess, timber gone, and slash lying everywhere. To even minimally clean it up he stood to spend far more than he got in down payment.

I had made him a moderately low but real cash offer, which he refused. An inexperienced, but greedy man, so I was not too broken up about what happened.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Old 06-28-2011, 01:46 PM   #92
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,384
Quote:
Originally Posted by sheehs1 View Post
Don't know if I'm officially alerting you chinaco...but I did make an offer today. Price dropped 30K last week-end. Offered 73% below new list price..
Just to check- do you mean 73% of the new list price, or 73% below the new list price? The first would be $730K on a million dollar asking, the second would be $1 million-$730K, or $270K.

In any case, a trophy property that will also rent at break-even or better is a rare find.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Old 06-29-2011, 07:41 AM   #93
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Posts: 1,648
Quote:
Originally Posted by W2R View Post
Sounds like a lovely property, sheehs1. Good luck!
Thanks W2R2.....I think the bank is going to be a bit snooty about it...or so the word goes (so what else is new)

Truth of the matter is we've been thru this property 4 times. Once the bank got it, they turned off all electrical and HVAC systems....and created a mess on the bottom floor that has the garages and game room. MOLD was growing on walls, ceilings and in closets of the game room. The house was built in 2005 and is curable at a price. Monday my agent went in there and the bank was cleaning the mold, had turned on all systems.etc., and are down playing the mold. This was factored in with my offer because I was immediately going to replace the HVAC system that services that floor and all duct work ...as well as ...investigate sheet rock and insulation...and hire a good remediation company and take test samples on every floor including the attic. The way it is now, no bank will lend money against it if their appraiser finds one spore too many of mold. So we are thinking the bank is forcing a cash offer (which I'm not doing). It's been an interesting week and I've learned a lot. Until a formal inspection is done on the property and the mold denoted ....it does not become a "material fact". Once it becomes a "material fact", the listing company has to disclose the mold. So right now...am forming a back up plan...to maybe purchase a lot...and build. Don't know but am moving with caution. Thanks for your well wishes.
__________________
sheehs1 is offline   Reply With Quote
Old 06-29-2011, 07:59 AM   #94
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Posts: 1,648
Quote:
Originally Posted by haha View Post
Just to check- do you mean 73% of the new list price, or 73% below the new list price? The first would be $730K on a million dollar asking, the second would be $1 million-$730K, or $270K.

In any case, a trophy property that will also rent at break-even or better is a rare find.

Ha
I wish it was the latter...but ...it is the former. Not quite at that level. Bank listed for $869 down from 1.3ish in 2009 (aren't they all). I offered $650K...due to the mold problem on bottom floor. Don't think they will accept. Built in 2005 4,750 square feet, 4 large master bedrooms each with their own bath and deck access, brazillian cherry floors, granite in kitchen...etc. and larger than we had wanted but loved the cedar shakes and decks and the design of the home. Also..has a real tiled pool and not those form pools most put it to satisfy renters pool requirement .

Without the ability of most being able to finance since a bank won't lend with a visible mold issue, and with true investors perhaps wanting beach front with more bedrooms, and few are going to pay "cash" (but someone might)...it could sit on the market longer. It's been on the market for over 900 days..already. It is probably the interior design. The main room...is 70 feet long..with no walls....kinda looks like a bowling alley with windows ...but I saw the possibilities of how to "warm it up" . Heck I could even put in a couple of fake walls if needed.or double sided book cases.
FYI...8 bedroom ocean front...bank owned.. just sold for $750K. So I thought my offer more than fair.

The lending company that owns this property......is in bankruptcy. All suggestions appreciated. We could have gone a bit higher on the offer...but ...I had calculated that at a certain point...it might not be a great business decision.
__________________
sheehs1 is offline   Reply With Quote
Old 06-29-2011, 09:38 AM   #95
Thinks s/he gets paid by the post
 
Join Date: Dec 2009
Location: Alberta/Ontario/ Arizona
Posts: 3,136
Not really a fan of rental real estate. Did this in my 30's with some success but the work/hassle required of being a landlord put me off. Also very illiquid asset and a long time frame is probably the best approach. There was a study done in Canada that reached the conclusion that you get very similar returns with REITS as compared to owning directly. Much less work too.
Having said that, personal use property is something very different. Still considering getting an high-end place in Scottsdale. Love having our stuff/cars, etc at our places. Still not sure as this would be place #4 and would probably only use it for about 75 days a year. Prices sure look good though.
__________________
Danmar is offline   Reply With Quote
Old 06-29-2011, 12:36 PM   #96
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 5,717
Send a message via Skype™ to kcowan
Quote:
Originally Posted by sheehs1 View Post
Once it becomes a "material fact", the listing company has to disclose the mold. So right now...am forming a back up plan...to maybe purchase a lot...and build. Don't know but am moving with caution. Thanks for your well wishes.
Visible mold is just a sign that there will mold behind the drywall and getting rid of that is very expensive...there was a special about a women sensitive to mold who had to move out of her house (Slept in the RV in the driveway) until they discovered the mold growth behind her drywall. None of her family members were impacted.
__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Old 06-29-2011, 02:36 PM   #97
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Posts: 1,648
Quote:
Originally Posted by kcowan View Post
Visible mold is just a sign that there will mold behind the drywall and getting rid of that is very expensive...there was a special about a women sensitive to mold who had to move out of her house (Slept in the RV in the driveway) until they discovered the mold growth behind her drywall. None of her family members were impacted.
Exactly right Kcowan...and is why I'm being as careful as I know how to be. Won't be upset if the bank laughs at my offer. Technically speaking...it isn't an offer and I've signed nothing. The bank only wanted letter from my lending bank with the terms of the offer before proceeding further...so...I have an out. The possibility of buying a lot and building just came up yesterday. Lots did not have for sale signs out...but there are 3 of interest that are available. I can possibly do this for about the same price...granted with less square footage but 4,750 square feet was larger than we wanted to begin with.
I'll tell you one thing. This can be stressful .but then I'm such a detail person it's probably me driving myself crazy making sure I have all the t's crossed and i's dotted before committing to anything.
The mold worried me...quite a bit actually...as my mom ultimately ended up with aspergillosus (sp) in her lungs..which contributed to her COPD.
__________________
sheehs1 is offline   Reply With Quote
Old 06-29-2011, 06:47 PM   #98
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
Quote:
Originally Posted by sheehs1 View Post
... I offered $650K...due to the mold problem on bottom floor. ...

Before I would risk any amount of money, I would get an expert to inspect and assess the property including (especially) the mold issue. For that matter, I would get an assessment before I took any further steps at all!

It is a buyer's market.... plenty of properties available. Why take any risk on known problems (that could be big... toxic black mold) and avoidable? It could affect the resale value or even your ability to resell it.
__________________
chinaco is offline   Reply With Quote
Old 06-29-2011, 07:12 PM   #99
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Posts: 1,648
I agree chinaco. Been sort of interesting. The bank won't let you do anything until they have ratified a contract. They stated they will only allow 7 to 10 days for due diligence...which allows a buyer to walk if something is found. But since they want their list price...and since no lender is going to lend money unless the house is free of "defects,.... the bankrupted bank has set the stage for allowing only a cash offer at full list price. They had someone in there "cleaning" the mold off the walls on the bottom floor when my agent went in there on Tuesday. The mold is not evident now. We saw it when it was. Hope they are not trying to hide it from a buyer.

We aren't getting this property and are now looking at a lot...to maybe build. At least then, we'll know what is behind the walls...especially if we want to retire to it someday.
__________________
sheehs1 is offline   Reply With Quote
Old 06-29-2011, 07:13 PM   #100
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,850
Quote:
Originally Posted by chinaco View Post
It is a buyer's market.... plenty of properties available. Why take any risk on known problems (that could be big... toxic black mold) and avoidable? It could affect the resale value or even your ability to resell it.
If my understanding is correct, you can't insure a home that has had mold until you can produce evidence that it was treated by a certified mold remediation expert.
__________________

__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
How you sleep may be bad for you easysurfer Health and Early Retirement 30 08-26-2010 05:31 PM
Housing crisis is global free4now FIRE and Money 14 09-10-2008 08:36 AM
Anonymous poll How many people sleep on thier back summer2007 Health and Early Retirement 36 07-30-2008 07:28 AM
Retirement crisis: From bad to worse serie1926 FIRE and Money 37 03-09-2008 10:00 AM
More fallout from housing crisis Zoocat Other topics 19 11-04-2007 10:09 PM

 

 
All times are GMT -6. The time now is 12:54 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.