Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 01-10-2008, 10:15 AM   #21
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,971
Quote:
Originally Posted by Sandy View Post
First you have to be comfortable in it. But also:

What is the condo association's reserve look like (do they have enough/plan to cover new roofing, paving, etc). This is very important or you could be subjec to special assessments that could be quite steep. You call it "slumlike" does that mean it hasn't been maintained? That would be a big red flag.

Can you walk at night or leave your car in the parking lot without worry?

For the complex, what is the owner occupied versus rented ratio? (owner occupied is better for many reasons).

What is the average age of current residents?

Do you have access to grocery or other desired amenities (that is location in addition to family).

Can you make interior changes without permission of the board?

Cheap is not necessarily bad, but you need to understand what your $$ is getting you - sometimes it is not a good deal, other times it is a real bargain.
I'm waiting to hear back today about what the reserve is. I'm not too worried about assessments though because there are 12 units in each of 2 buildings so a new parking lot or something like that would be split up between 24 units. The citi-data link provided in a earlier post shows well below average crime. At least 4 of the 12 units in my building are rented. It appears that everyone in the building is middle-age or older. That's ok. That probably means they're quite and so am I so that's good. Yes grocery, bank, wal'mart are all within a few miles. I can make interior changes that don't alter the lay-out. ie. can't tear down a wall.
__________________

__________________
aaronc879 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 01-10-2008, 10:55 AM   #22
Thinks s/he gets paid by the post
 
Join Date: Apr 2007
Posts: 1,304
Buying property is not the thing to cheap out on.
The experts say that the key to buying property is location location location. If you are buying a broken down condo (i.e. needs renovation or remodeling) and it is in a great neighborhood, then go for it. You will profit in the long run. If you are buying in a slum (as you put it) then I would advise against it. In the long run, you will get less appreciation and could even lose value on the property if it is in an declining area.
... my 2 cents worth ... and worth every penny
__________________

__________________
Life is GREAT!
megacorp-firee is offline   Reply With Quote
Old 01-10-2008, 12:36 PM   #23
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,617
Why do you want to own your home? Security, comfort, quiet, flexible décor, not having to deal with landlords? Those are all good deals but they come with baggage. Are the advantages more than the distractions and the sweat equity you're gonna have to put forth? Or would you make more money by buying stock in a nice downtrodden shipper or retail bank?

A couple issues to consider:
- At least one poster on this board bought the condo of their dreams, only to see the neighbors change from quiet middle-aged couples to late-night-noisy street-partying 20-somethings. They sold just to find new neighbors. The "good" news is that their hard-partying 20-something buyers thought they were getting a great deal.

- If your area's had a loss of manufacturing jobs, is that likely to depress your real estate values? I'm talking 1980s Houston after the oil crash.

- Ask your prospective neighbors how the condo association is and how the meetings are going. Having lived in a condo of 63 units, I think that 24 units is very shallow in the governance talent pool and way too small to share the condo-association workload. There's a real risk of it being taken over by rules-niggling parlimentary authoritarians.

- Speaking from more personal experience, find out how much it would cost to repaint, reroof, and repave-- and then compare that to the reserves. If you get blank looks in response then run away fast.

- Very few people buy homes for "only a few months or so", but the median ownership is barely seven years. How will you deal with the curve balls of a downsizing, a new/better job, a spouse/family, extended travel, or an unusually harsh Wisconsin winter?

- Houses generally appreciate at the rate of inflation, although if you find a bargain you may gain more for a few years. But if you're planning to live in it for the "long term" then those gains are at risk of vaporizing during the next economic downturn.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 01-10-2008, 01:47 PM   #24
Thinks s/he gets paid by the post
free4now's Avatar
 
Join Date: Dec 2005
Posts: 1,225
Funny how local real estate is... In San Francisco a smaller 1br/1ba condo sells for about 15x the price of that!

I would echo the comments to not buy in a "slum". The most important thing in real estate investing is to be in a place where values go up as much as possible.

I'd wait a few years until the RE market settles down anyway.
__________________
free4now is offline   Reply With Quote
Old 01-10-2008, 02:22 PM   #25
Thinks s/he gets paid by the post
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 2,402
Quote:
Originally Posted by aaronc879 View Post
I'm just wondering if living in a place that is only 1/4 of what I can qualify for is going too far with "LBYM".
I think it is a personal decision. I would say you're going too far with LBYM if:

1. It endangers your or your family's health or safety.
2. It is "penny wise and pound foolish", meaning you'll either (a) buy something for cheap and then end up spending more money to get it the way you want it than if you'd just bought what you wanted in the first place, or (b) buy this place even though it doesn't meet your needs and you end up trading up later, with all the associated transaction costs and hassle.
3. You're not buying what you need.

I wouldn't say it is going too far if you're just going against cultural norms -- in this case the norm is to buy whatever the bank will say you qualify for -- but that is easier said than done.

2Cor521
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 01-10-2008, 03:12 PM   #26
Thinks s/he gets paid by the post
Bikerdude's Avatar
 
Join Date: Jul 2006
Posts: 1,901
Usually the lower cost Condo's are not very quiet. Check on the sound proofing that was installed when the units were built. Talk to some of the people living there.
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
Bikerdude is offline   Reply With Quote
Old 01-10-2008, 03:27 PM   #27
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,971
When i went for the first showing i was shocked at how quiet it was in the unit. I couldn't hear any noise at all. I went out side by the pool and it was much louder as there is a fairly major highway not far away. But the important thing is inside the unit is quite.
__________________
aaronc879 is offline   Reply With Quote
Old 01-10-2008, 03:47 PM   #28
Recycles dryer sheets
Robert the Red's Avatar
 
Join Date: Aug 2005
Posts: 325
Quote:
Originally Posted by aaronc879 View Post
I plan to get a 15 year mortgage ...
This idea is a mistake. Get a 30 year mortgage (fixed rate, no prepay penalty), then pay extra when you can afford it. You said your job is a little uncertain -- you don't want to be bound to the higher 15 year mortgage pay rate if your pay goes down by 50% suddenly!
__________________
Robert the Red is offline   Reply With Quote
Old 01-10-2008, 04:19 PM   #29
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 16,528
In addition to the other comments, consider whether you're going to use the amenities (i.e., the pool) that the association fees will be paying for. For example, the community we live in has a pool we don't use that takes up about one-third of the $400/year association fee. Had we known that, we may not have bought in the community. Compared to the total cost of ownership it's a drop in the bucket really, but it was a surprise that the pool cost that much and is an annoyance. Much of the pool cost is for insurance and the lifeguards that are required by the insurance company.

I've also heard bad things about associations not keeping adequate reserves for roofs and repaving - be careful about that!
__________________
I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
Old 01-10-2008, 04:25 PM   #30
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,860
Quote:
Originally Posted by Robert the Red View Post
This idea is a mistake. Get a 30 year mortgage (fixed rate, no prepay penalty), then pay extra when you can afford it. You said your job is a little uncertain -- you don't want to be bound to the higher 15 year mortgage pay rate if your pay goes down by 50% suddenly!
This is good advice. I paid my house off in four years, but got a 30-year mortgage to do it. By the time I paid it off my total payments had been a trivial amount more than they would have been with a fifteen year mortgage. But each month, I had the *option* of sending in the extra or not. Obviously I paid more than my required payments most of the time, but I liked the increased flexibility in case something unexpected came up.
__________________
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 01-10-2008, 07:18 PM   #31
Recycles dryer sheets
 
Join Date: Dec 2006
Location: Florida
Posts: 249
Are you comfortable with the racial make-up of the "hood" (er, neighborhood) ? Also not mentioned, or did I miss it? : condos can be difficult to re-sell, especially if your neighborhood goes to S#!T after you buy it. Perhaps this is less of a risk in a not-ritzy neighbor hood to begin with?
__________________
I've got nothing against an honest day's work, provided that someone else does it.
pedorrero is offline   Reply With Quote
Old 01-10-2008, 08:37 PM   #32
Recycles dryer sheets
 
Join Date: May 2007
Posts: 216
I just did a quick MLS search in your area. Literally took me one minute. Here are some single-family homes in the 65k-75k range. If it were me, I would think very seriously about spending a 20-30k more and getting a house. If you can afford to put 15k down to avoid PMI, on a 75k house, your payments would be about $359.

I don't know your situation, obviously. But this may be an avenue that you should seriously, seriously consider.

Edit: Here is a link: Neenah, WI - Prudential Preferred Properties
__________________
"...I'm the kind of guy who if he can't have too much of a thing doesn't want any at all."
GatorBuzz is offline   Reply With Quote
Old 01-10-2008, 09:50 PM   #33
Recycles dryer sheets
barbarus's Avatar
 
Join Date: Aug 2007
Posts: 433
Wait awhile if you can and see how your position holds up AARON. You'll find even better deals in the next couple of years. Much better.
You're wise to be concerned about manufacturing. The Midwest is in a death spiral that I see no way out of.
__________________
barbarus is offline   Reply With Quote
Old 01-10-2008, 09:58 PM   #34
Thinks s/he gets paid by the post
lazygood4nothinbum's Avatar
 
Join Date: Feb 2006
Posts: 3,895
257 foreclosures in neenah per Welcome to RealtyTrac

with 59 of those "priced" (in quotes) under $150k per http://realestate.yahoo.com/Wisconsi...w=&bathroomLow=

wanna bet you can get one of those for half price?
__________________
"off with their heads"~~dr. joseph-ignace guillotin

"life should begin with age and its privileges and accumulations, and end with youth and its capacity to splendidly enjoy such advantages."~~mark twain - letter to edward kimmitt 1901
lazygood4nothinbum is offline   Reply With Quote
Old 01-10-2008, 10:16 PM   #35
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,046
Quote:
Originally Posted by free4now View Post
Funny how local real estate is... In San Francisco a smaller 1br/1ba condo sells for about 15x the price of that!
We were in SF in December and could not understand the reason that people would pay that much for a place to live. Most houses (built in early 1900s) do not have any windows on the side and their walls are almost right next to those of another house. Parking spaces are limited. Traffic is very congested even on the weekend. The city does have a lot of high rises that overlook the bay, but a condo at one of those buildings probably costs a couple million dollars.
Most of the jobs, I believe, are located in downtown to which you can access by BART from the East Bay in which housing is more affordable (still very high).
__________________
Spanky is online now   Reply With Quote
Old 01-10-2008, 11:50 PM   #36
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 Spanky View Post
Most of the jobs, I believe, are located in downtown to which you can access by BART from the East Bay in which housing is more affordable (still very high).
Totally different experience. I lived in Walnut Creek for 2 weeks; I hated it so much I forfeited my first and last to get over to the city. I also lived in Berkeley for a time which was nice, and sunnier and warmer than SF, but not so hot as east of the Berkeley/ Oakland Hills.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 01-11-2008, 10:12 AM   #37
Full time employment: Posting here.
CCdaCE's Avatar
 
Join Date: Apr 2006
Posts: 887
Doesn't look like too tough of a neighborhood, adjacent to the golf course. See the aerial map on Mapquest. I worked in Port Washington for a few weeks, so I got a ballpark idea of the area.

Personally, I don't like the idea of a condo, with the fees and "I-don't-get-a-say" in the maint. issues. Sure, it may seem "cheap" now, but you're stuck with those fees forever. Figure out the present value of $200/mo. or whatever for the rest of your life, or life of the dwelling. You still have maint. with a house, but at least you have more say whether you put in a new driveway, pay for snow removal for every 1/2" that falls (stuff you can do yourself if you're truely LBYM), pick maint. free siding/shingles, etc. Are you going to have enough room for all your hunting/fishing/stamp collecting/kayaking/Green Bay Packers/etc. gear in 10 years in a condo.?

I just can't make the leap after renting through college and now owning a house for the past few years. But, I'm a OCD Engineer when it comes to some things.

Good luck, whatever you choose. A seemingly (to me) low priced condo. might be exactly what you're suited to. Pros and cons to everything.

-CC
__________________
"There's those thinkin' more or less, less is more, but if less is more, how you keepin' score?
It means for every point you make, your level drops. Kinda like you're startin' from the top..." "Society" - Eddie Vedder
CCdaCE is offline   Reply With Quote
Old 01-11-2008, 01:39 PM   #38
Recycles dryer sheets
 
Join Date: Jan 2005
Posts: 322
Quote:
Originally Posted by Spanky View Post
We were in SF in December and could not understand the reason that people would pay that much for a place to live. .
Spanky, we were there for a week n half over Thanksgiving visiting my brother, SIL, and their new babe.
We went here for b-fast almost everyday:
Welcome | TARTINE BAKERY - SAN FRANCISCO
OMGoodness! the best tasting 1000kcal for for a meal. Yeah-ah! If I could stroll here for b-fast everyday I would move there SOO fast.
sigh... I think my stomach shed some tears when the plane left the tarmac.

OP, how much more house equity could the $110/mo HOA buy you?
I think condos are best for places where RE is really expensive.
Honestly, from the looks of your locale, I would save or work for a house. In the ABSOLUTE most desirable location. I understand you make $44k, but there are ways to increase that.
__________________
P.S. is offline   Reply With Quote
Old 01-12-2008, 05:28 PM   #39
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 Robert the Red View Post
This idea is a mistake. Get a 30 year mortgage (fixed rate, no prepay penalty), then pay extra when you can afford it. You said your job is a little uncertain -- you don't want to be bound to the higher 15 year mortgage pay rate if your pay goes down by 50% suddenly!

I disagree. He is paying a condo at 1X his salary, compared to a far more typical 3x or in places like Hawaii or CA 4-5x. There is a 1/2 percent different between 30 year and 15 year fixed. 15 year 35K loan at 5% payments are $276 at 30 year loan at 5.5% is $198
__________________

__________________
clifp is offline   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
Lbym mickeyd FIRE and Money 17 10-02-2007 09:52 AM
So you think YOU LBYM??? W2R FIRE and Money 33 07-10-2007 05:46 PM
Poll: Why do you LBYM? JustCurious FIRE and Money 34 02-20-2007 06:57 PM
Why do you LBYM? JustCurious FIRE and Money 58 02-14-2007 02:12 PM
Ultimate LBYM................. FinanceDude Other topics 3 12-19-2006 12:25 PM

 

 
All times are GMT -6. The time now is 12:35 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.