Thanks everyone. There is a lot of really good info here.
Om, I totally forgot you did real estate. We'll have to talk.
I'm in South San Francisco, which is it's own city and not part of real San Francisco. It's like 10 minutes from San Francisco. I work for San Mateo county as part of the library system. I believe it's going to be a pretty stable career and I definitely have the potential to move up within the organization. I've already moved up quickly and new things keep popping up.
We rent from my grandma and are currently in a 2 bedroom that has a full basement and a finished room in the basement where all of my records and music equipment are. Grandma lives across the street. She loves it and we love it. My mom grew up in this house. Rent is cheap. Downside... Dudes keep killing eachother within blocks of my house. This is a relatively quiet and I would even say safe area, but knuckleheads are shooting dudes in the face, blasting down 15 year olds, and last night a drive by that had 6 shot. It's gang shit, but it's literally around the corner and two blocks down. This is some other side of the tracks shit. One block up the hill are some baller million dollar mansions and then my block is modest 500k to 700k maybe. Then you go down a few blocks towards 101 and it seems decent, but dudes are shooting people in the face!
Were not looking in sf. Were looking more on the peninsula, especially Burlingame and parts of San Mateo. Sometimes things pop and seem decent but I'm not even ready to make moves. I just want to get everything in line and not procrastinate on this. I put a mental pin marker 3 years down and told my wife we need to figure out how to make it happen by then. Chances are we'll get some help from family but I am not expecting anything.
Thanks for all the input. I really appreciate it. Keep it coming.
Just my two cents. When you're putting in hundreds of thousands into something, damn straight you better look at it as an investment.
Obviously this is preferable, but the reality (imo) is that 95% of the houses in the U.S. won't appreciate beyond the level of inflation for the next 20 years or so. If you aren't living in a high demand area then there isn't much you can do to change that.
If your house turns into a windfall that's great, but counting on it is risky.
Just my two cents. When you're putting in hundreds of thousands into something, damn straight you better look at it as an investment.
Obviously this is preferable, but the reality (imo) is that 95% of the houses in the U.S. won't appreciate beyond the level of inflation for the next 20 years or so. If you aren't living in a high demand area then there isn't much you can do to change that.
If your house turns into a windfall that's great, but counting on it is risky.
Definitely. It still kills me when I hear mortgage companies advertising about a house being "your greatest investment." Houses are now probably better investments when you don't actually live in them yourself.
I think maybe we have two different meanings for "investment" here.
Any home purchase is an investment in time, energy, stress and of course, money. It'd be an "investment" regardless if you accrue equity or not. So I think, when Spelunk says, "darn tootin', it's an investment," he's partially suggesting that, given the amount of capital you're putting in, you need to be judicious.
However, if you think of a home as "source of increasing equity" then you need a reality czech about the current state of the housing market. The idea that what you buy today is something you can flip for profit in 5-10 years is pipe dream territory at this point.
Chances are we'll get some help from family but I am not expecting anything.
I'd get clarity on this, especially since gathering money for your down is the biggest challenge that most prospective homebuyers face. It's good to know, going in, what kind of help you might be able to count on rather than leaving it ambiguous.
I'm in South San Francisco, which is it's own city and not part of real San Francisco. It's like 10 minutes from San Francisco. Then you go down a few blocks towards 101 and it seems decent, but dudes are shooting people in the face!
ah-- figured you were in the city proper, as there are parts that are ho-hum neighborhoods and two blocks down, shit can get wild.
geez, i had no idea SSF got down like that. yikes!
i feel bad for home buyers in the bay....shit is just through the roof.
my dad built a house on potrero hill before i was born and sold it when we moved to philly in 75. he just shakes his head and laughs about that "business deal". oof.
when i bought my place, i was sold on the location, but had to resign myself to buying a shell. banks are very very squeamish and put out a lot of red tape for construction loans....enough so where it was not possible to do it through a bank. the solution for me was getting an official loan through circle lending, an org that sets up in family loans. keep in mind that the loan was under a 100k, but it allowed me to take my time with the rehab, avoid a ton of closing costs, and pay the interest on my 30 year loan to my family. on their side, they pulled out of a mediocre investment and got a better return from the points in our contract that circle lending set up. so win win all around...avoiding banks all together.
circle lending has changed its names several times over the years, but basically, they charge $600 to set up the mortgage loan and administer it. no extra charges. i pay them every month, and they pay the family lender. if i dont pay, my sit gets repossessed by family, i guess. everything is still an official mortgage or tax purposes
this loan necessitates knowing a family/friend who can put up that type of money and is willing to do so for modest long term returns.
man
great advice in this thread
we have about 30k ready for a down (saving aint no thang)
but we need to find some stable ass work
furthermore we need to focus on where exactly we will settle
i had a long conversation with a couple of architects and thy knew their shit
agent and an area with gov investment to make the area grow in value is the advice i kept
Indeed. I'm in the process of closing on an East Bay cottage on .25 acres for 175k. Escrow to close May 4th.
My friend just bought a 5 bed mansion w/ pool (grotto/playboy/waterfall schitt) in Valejo for 372k.
There's some crazy deals in the bay.
The shitty thing about my spot is that it was bank owned and they didn't want anything to do with the yard. The yard is full of old chicken/pigeon coops (5 of 'em) and completely overgrown. I found syringes and a spoon in one of the coops. I know it's a shot in the dark, but do you guys think there's any chance I could call the health department and see if they would help clean up? I figure it's worth asking. Otherwise I'm hiring a crew to handle this. No HIV/Bird flu for me.
Indeed. I'm in the process of closing on an East Bay cottage on .25 acres for 175k. Escrow to close May 4th.
My friend just bought a 5 bed mansion w/ pool (grotto/playboy/waterfall schitt) in Valejo for 372k.
There's some crazy deals in the bay.
The shitty thing about my spot is that it was bank owned and they didn't want anything to do with the yard. The yard is full of old chicken/pigeon coops (5 of 'em) and completely overgrown. I found syringes and a spoon in one of the coops. I know it's a shot in the dark, but do you guys think there's any chance I could call the health department and see if they would help clean up? I figure it's worth asking. Otherwise I'm hiring a crew to handle this. No HIV/Bird flu for me.
The only drawback could be is that if they found "issues" you could have trouble, i.e. forced into costly hazmat cleanup and containment procedures.
If you hire a crew, make sure that they're insured.
The only drawback could be is that if they found "issues" you could have trouble, i.e. forced into costly hazmat cleanup and containment procedures.
If you hire a crew, make sure that they're insured.
Thanks I didn't think about that.
And my crew will most likely come from the Home Depot parking lot, so I don't think they're insured. I will make sure that anyone involved with clean up understands the risks involved with cleaning up bird poop/drug paraphanelia.
I almost bought a house once.
Then I found out there are closing costs.
Fortunately at the signing someone tipped to the closing costs.
Of course I walked away.
And did you know the realtors get a cut? And the escrow people? And the inspector? And the appraiser? It's a racket. Worse than social security.
If I could go back, one thing I would do differently is to get two (2) home inspections. The one guy found a few things but the stuff he missed, I gather, would have given me enough leverage to skim some more off the top. Paying for all of that now, cuz you know I needed to get some new gutters STAT!
Signed the contract a little more than a year ago and closed a year ago in June. Definitely do not regret buying.
Closing costs, I got a Union Plus mortgage through my union and there were like zero costs to me. Plus, I have protection if I am laid off or we go on strike -- the mortgage will be paid for up to eight months, with four of those (I think) completely covered at no cost to me.
Basically, unless its what you do for a living, you have to completely ignore the investment side of home-buying. Otherwise you are prone to fits of anxiety with any news story about housing prices, bubbles, crashes, etc.
There is the peace of mind associated with the idea that your monthly payments are going (at least in part) into an asset you own as opposed to some random landlord (but that is assuming that asset is appreciating, so therefore see my advice above).
There are a million variables that go into a decision to rent or buy, but in the end, emotion tips the scales.
However, a house can be a crazy money pit and when things go wrong, it gets mighty expensive. There's something to be said for just being able to call up the landlord and let them fix shit.
The shitty thing about my spot is that it was bank owned and they didn't want anything to do with the yard. The yard is full of old chicken/pigeon coops (5 of 'em) and completely overgrown. I found syringes and a spoon in one of the coops. I know it's a shot in the dark, but do you guys think there's any chance I could call the health department and see if they would help clean up? I figure it's worth asking. Otherwise I'm hiring a crew to handle this. No HIV/Bird flu for me.
Comments
Om, I totally forgot you did real estate. We'll have to talk.
I'm in South San Francisco, which is it's own city and not part of real San Francisco. It's like 10 minutes from San Francisco. I work for San Mateo county as part of the library system. I believe it's going to be a pretty stable career and I definitely have the potential to move up within the organization. I've already moved up quickly and new things keep popping up.
We rent from my grandma and are currently in a 2 bedroom that has a full basement and a finished room in the basement where all of my records and music equipment are. Grandma lives across the street. She loves it and we love it. My mom grew up in this house. Rent is cheap. Downside... Dudes keep killing eachother within blocks of my house. This is a relatively quiet and I would even say safe area, but knuckleheads are shooting dudes in the face, blasting down 15 year olds, and last night a drive by that had 6 shot. It's gang shit, but it's literally around the corner and two blocks down. This is some other side of the tracks shit. One block up the hill are some baller million dollar mansions and then my block is modest 500k to 700k maybe. Then you go down a few blocks towards 101 and it seems decent, but dudes are shooting people in the face!
Were not looking in sf. Were looking more on the peninsula, especially Burlingame and parts of San Mateo. Sometimes things pop and seem decent but I'm not even ready to make moves. I just want to get everything in line and not procrastinate on this. I put a mental pin marker 3 years down and told my wife we need to figure out how to make it happen by then. Chances are we'll get some help from family but I am not expecting anything.
Thanks for all the input. I really appreciate it. Keep it coming.
Obviously this is preferable, but the reality (imo) is that 95% of the houses in the U.S. won't appreciate beyond the level of inflation for the next 20 years or so. If you aren't living in a high demand area then there isn't much you can do to change that.
If your house turns into a windfall that's great, but counting on it is risky.
Definitely. It still kills me when I hear mortgage companies advertising about a house being "your greatest investment." Houses are now probably better investments when you don't actually live in them yourself.
Any home purchase is an investment in time, energy, stress and of course, money. It'd be an "investment" regardless if you accrue equity or not. So I think, when Spelunk says, "darn tootin', it's an investment," he's partially suggesting that, given the amount of capital you're putting in, you need to be judicious.
However, if you think of a home as "source of increasing equity" then you need a reality czech about the current state of the housing market. The idea that what you buy today is something you can flip for profit in 5-10 years is pipe dream territory at this point.
I'd get clarity on this, especially since gathering money for your down is the biggest challenge that most prospective homebuyers face. It's good to know, going in, what kind of help you might be able to count on rather than leaving it ambiguous.
ah-- figured you were in the city proper, as there are parts that are ho-hum neighborhoods and two blocks down, shit can get wild.
geez, i had no idea SSF got down like that. yikes!
my dad built a house on potrero hill before i was born and sold it when we moved to philly in 75. he just shakes his head and laughs about that "business deal". oof.
when i bought my place, i was sold on the location, but had to resign myself to buying a shell. banks are very very squeamish and put out a lot of red tape for construction loans....enough so where it was not possible to do it through a bank. the solution for me was getting an official loan through circle lending, an org that sets up in family loans. keep in mind that the loan was under a 100k, but it allowed me to take my time with the rehab, avoid a ton of closing costs, and pay the interest on my 30 year loan to my family. on their side, they pulled out of a mediocre investment and got a better return from the points in our contract that circle lending set up. so win win all around...avoiding banks all together.
circle lending has changed its names several times over the years, but basically, they charge $600 to set up the mortgage loan and administer it. no extra charges. i pay them every month, and they pay the family lender. if i dont pay, my sit gets repossessed by family, i guess. everything is still an official mortgage or tax purposes
this loan necessitates knowing a family/friend who can put up that type of money and is willing to do so for modest long term returns.
good luck man... i love the bay area to death.
regulating mens
great advice in this thread
we have about 30k ready for a down (saving aint no thang)
but we need to find some stable ass work
furthermore we need to focus on where exactly we will settle
i had a long conversation with a couple of architects and thy knew their shit
agent and an area with gov investment to make the area grow in value is the advice i kept
Indeed. I'm in the process of closing on an East Bay cottage on .25 acres for 175k. Escrow to close May 4th.
My friend just bought a 5 bed mansion w/ pool (grotto/playboy/waterfall schitt) in Valejo for 372k.
There's some crazy deals in the bay.
The shitty thing about my spot is that it was bank owned and they didn't want anything to do with the yard. The yard is full of old chicken/pigeon coops (5 of 'em) and completely overgrown. I found syringes and a spoon in one of the coops. I know it's a shot in the dark, but do you guys think there's any chance I could call the health department and see if they would help clean up? I figure it's worth asking. Otherwise I'm hiring a crew to handle this. No HIV/Bird flu for me.
The only drawback could be is that if they found "issues" you could have trouble, i.e. forced into costly hazmat cleanup and containment procedures.
If you hire a crew, make sure that they're insured.
175k buys half a closet in hawaii ;_;
Thanks I didn't think about that.
And my crew will most likely come from the Home Depot parking lot, so I don't think they're insured. I will make sure that anyone involved with clean up understands the risks involved with cleaning up bird poop/drug paraphanelia.
Should I present the seldom discussed other side?
Sure.
Or one of your non sequiturs if you'd like
pls elaborate
A) Cash Gone.
B) Closing costs.
C) Maintenance.
D) Taxes.
E) You're trapped.
F) You're broke.
H) Illiquidity. / High leverage. / No diversification.
Then I found out there are closing costs.
Fortunately at the signing someone tipped to the closing costs.
Of course I walked away.
And did you know the realtors get a cut? And the escrow people? And the inspector? And the appraiser? It's a racket. Worse than social security.
pffff. everything is negotiable, including realtor rates. Redfin that ish.
small price to pay
you mean breaks? plenty of 'em. mortgage interest tax break plus others
I've never been trapped in my house, have a spare set of keys
nope, cash not gone. It's well within reason that a mortgage can be equal or less than a rental
why would anyone buy a home for it's liquidity, we aren't talking flipping
fwiw, your source believes home ownership "is a scam"
http://www.dailyfinance.com/story/credit/seven-reasons-not-to-buy-a-home/19597268/
Signed the contract a little more than a year ago and closed a year ago in June. Definitely do not regret buying.
When I retire in 15 years or so (if I'm lucky) the payments will be quite a bit higher, assuming SS still exists.
People focusing on liquidity are missing the point - owning is largely a quality of life consideration.
There is the peace of mind associated with the idea that your monthly payments are going (at least in part) into an asset you own as opposed to some random landlord (but that is assuming that asset is appreciating, so therefore see my advice above).
There are a million variables that go into a decision to rent or buy, but in the end, emotion tips the scales.
However, a house can be a crazy money pit and when things go wrong, it gets mighty expensive. There's something to be said for just being able to call up the landlord and let them fix shit.