Members Jugghaid Posted January 29, 2009 Members Share Posted January 29, 2009 Not because I need to, but because I think it may be a very smart move. I think the housing market is going to tank even worse over the next year. Right now, because my house is in a very solid desireable neighborhood, I can still get close to top dollar for it. I only paid a $257,500 for it and based on the recent sales in my specific neighborhood, I could probably get about $310,000 for it right now. I only owe about $210,000. I can bank that $100k in a 6 month or one year CD so it's nice and safe. Rent for 6 months or a year. Then, as things continue to crash (which I'm pretty damn sure they will) I can swoop in and get twice the house for the same money. A friend of mine just picked up a 3500 Square foot house in Parker (suburb) on 5 acres that sold 4 years ago for a little over $400k. he paid $185k buying it out of foreclosure. That's the kind of deal I'm looking for. Take the equity, bank it, then buy something like this and have a nice tiny mortgage, if one at all. Am I nuts to do this? Link to comment Share on other sites More sharing options...
Members bassman1956 Posted January 29, 2009 Members Share Posted January 29, 2009 Is there anyone else involved in the move? Spouse? Kids?If not, sure, if you don't mind the work. If so, gets a bit more complicated. Link to comment Share on other sites More sharing options...
Moderators ThudMaker Posted January 29, 2009 Moderators Share Posted January 29, 2009 If you are confident that the housing market is going to collapse in your area even further, then it may be a good idea. As usual investment is just like Vegas without the decks of cards and craps tables. Link to comment Share on other sites More sharing options...
Members dDigitalPimp Posted January 29, 2009 Members Share Posted January 29, 2009 you may want to think about playing the bass thru an amp in an apartment. might piss off the neighbors depending on the layout. Link to comment Share on other sites More sharing options...
Members MrJoshua Posted January 29, 2009 Members Share Posted January 29, 2009 Coincidentally, I'm thinking about buying a house. Not yours, though. My neighbors are thinking about selling their house and moving, and if they do I'll try to buy their house. It's quite a bit larger than my trailer - a three-bedroom brick house on about three acres of land, right next to my parents' farm so I'd be close to help out around the farm. Pool, big back yard ... Link to comment Share on other sites More sharing options...
Members bbl Posted January 29, 2009 Members Share Posted January 29, 2009 I dunno, Juggs. How adverse are you to moving? To packing? How about selling costs? Sounds like more downside than upside to me, but I'm also risk adverse when it comes to the roof over my head. It's not just an investment to me. It's my home. But it sounds like you're more risk tolerant and have made some good decisions in the past. Just as we don't know that recessions start until 6-12 months after they've started, we don't know that recessions are over until 6-12 after they're over. In other words, we could be rebounding now or quite soon. Also, you're betting that housing prices will continue to slide significantly, something our big bad gov't and their big fat checkbook desperately want to avoid. Just my 2 cents. Link to comment Share on other sites More sharing options...
Members JacieFB Posted January 29, 2009 Members Share Posted January 29, 2009 Well, it seems cool on paper. But I think it was you, Jugghaid, with the help of Thud and others that got in my head about not gambling with my house. (You may remember the wife had a balloon loan on our house which you guys said I should re-fi asap. We did, btw.) I'm just guessing by the info you've given on here that you prolly have a few more bucks in the bank than we do, but still...I'm sure you're considering the severity of it. Link to comment Share on other sites More sharing options...
Members Jugghaid Posted January 29, 2009 Author Members Share Posted January 29, 2009 Is there anyone else involved in the move? Spouse? Kids?If not, sure, if you don't mind the work. If so, gets a bit more complicated. Yes. Spouse and Kids. That's no biggie though. I hate moving but I could really bank on this move. Link to comment Share on other sites More sharing options...
Members Jugghaid Posted January 29, 2009 Author Members Share Posted January 29, 2009 you may want to think about playing the bass thru an amp in an apartment.might piss off the neighbors depending on the layout. I would rent a house, not an apartment. There are a ton of houses for rent right now due to people trying to stay out of foreclosure for less than my mortgage. Link to comment Share on other sites More sharing options...
Members JacieFB Posted January 29, 2009 Members Share Posted January 29, 2009 The other thing to think about is it is a definite gamble that housing prices will go down. Even if the over-all market goes down, don't underestimate people's ability to over-price things. The wife and I were searching the realty sites yesterday on our snow day. There are some definite bargains to be had out there, but the houses that are truly nice, practical, and in good locations are still priced out-of-this world. Would they budge? Probably, but not enough to, in our case, not make us house poor were we to try and buy one. In your case, perhaps not enough to make it a good investment. Just some thougths. Link to comment Share on other sites More sharing options...
Members Jugghaid Posted January 29, 2009 Author Members Share Posted January 29, 2009 I dunno, Juggs. How adverse are you to moving? To packing? How about selling costs? I have a real estate agent that will do it at 3%. That industry is hurting right now. But I can make up the $10k it would cost in commissions 10 times over if my timing is right. I hate moving, but another $1000 to move is no big deal. It's a pain in the ass, but well worth it if I can translate it into a $100k net gain over the next year or so. Sounds like more downside than upside to me, but I'm also risk adverse when it comes to the roof over my head. It's not just an investment to me. It's my home. But it sounds like you're more risk tolerant and have made some good decisions in the past. To me, it's a house. Yes, it's my home, but it's also just brick, mortar, wood and drywall, etc. The next one would be my home as well. With the buyout money I am getting for the structured buyout of my interest in my company, I could easly end up with a much nicer house on some land and have absolutely no mortgage in a year or less. I like that idea a lot. Just as we don't know that recessions start until 6-12 months after they've started, we don't know that recessions are over until 6-12 after they're over. In other words, we could be rebounding now or quite soon. Could be. But my house didn't start dropping in value until 30 days ago. And even the comps show that is inaccurate and it hasn't dropped at all. Worst case scenario is that I'll still make money off it based on where the market is right now. New jobless claims and other indicators show we havne't hit bottom yet. I'm figuring at least 6 months to a year before we do and there will be a ton of bank owned properties out there. Also, you're betting that housing prices will continue to slide significantly, something our big bad gov't and their big fat checkbook desperately want to avoid. They do. But I don't think they can stop it at this point. Even if they find the solution now, there are so many people in so far over their heads that any new policies or plans will take a while to have a significant effect, and those that are already screwed and have lost their homes....well, there's a whole lot of property out there cheap right now. I don't think it will get any better for a while. Just my 2 cents. I appreciate the input. That's exactly the type of feedback I'm looking for. Link to comment Share on other sites More sharing options...
Members Emprov Posted January 29, 2009 Members Share Posted January 29, 2009 Right now the credit markets seem to be pretty weird, many companies won't lend anything more than 55% LTV, even with A paper, from what I've seen. It doesn't cost that much to list, but I wouldn't be surprised if it didn't move. Link to comment Share on other sites More sharing options...
Members JacieFB Posted January 29, 2009 Members Share Posted January 29, 2009 Right now the credit markets seem to be pretty weird, many companies won't lend anything more than 55% LTV, even with A paper, from what I've seen. It doesn't cost that much to list, but I wouldn't be surprised if it didn't move. There are definitely fewer and fewer people that can afford that large of an investment these days. Link to comment Share on other sites More sharing options...
Members Jugghaid Posted January 29, 2009 Author Members Share Posted January 29, 2009 Well, it seems cool on paper. But I think it was you, Jugghaid, with the help of Thud and others that got in my head about not gambling with my house. (You may remember the wife had a balloon loan on our house which you guys said I should re-fi asap. We did, btw.) I'm just guessing by the info you've given on here that you prolly have a few more bucks in the bank than we do, but still...I'm sure you're considering the severity of it. The only thing that makes me hesitate is that I have a really nice fixed 30 year (with about 22 years left on it) mortgage. Lenders are going to be way tighter with loans down the road, but I have killer credi and coming up with 20% down will be a non-issue, if I even decide to get a mortgage when I buy a place. I do like the interest writeoff though at tax time, but that washes with not paying the interest in the first place, and then some. you were right to get out of the baloon loan. totally different scenario. Link to comment Share on other sites More sharing options...
Members lug Posted January 29, 2009 Members Share Posted January 29, 2009 So you want to make money whilt everyone else is suffering....you are just pure pure evil! Link to comment Share on other sites More sharing options...
Members #6 Posted January 29, 2009 Members Share Posted January 29, 2009 #1 question is: where do you live? this recession, and this housing market is highly asymmetrical, so there are no general answers to things like this. Many towns my area have seen gains recently, as high as 20% annually, but I live in a place pretty insulated from the recession and the housing bubble. Link to comment Share on other sites More sharing options...
Members mlwarriner Posted January 29, 2009 Members Share Posted January 29, 2009 i just picked up 2400 foreclosed square feet that needs a little love. i figure by the time we're "finished" with the house, we'll have under 50 in it. three years ago, similar houses were listing for 130 to 160, and selling like hotcakes. i'll work on this one until the market comes back, and see about flipping it at that point. i'd say do it if your finances will allow it. Link to comment Share on other sites More sharing options...
Members Jugghaid Posted January 29, 2009 Author Members Share Posted January 29, 2009 The other thing to think about is it is a definite gamble that housing prices will go down. Even if the over-all market goes down, don't underestimate people's ability to over-price things. The wife and I were searching the realty sites yesterday on our snow day. There are some definite bargains to be had out there, but the houses that are truly nice, practical, and in good locations are still priced out-of-this world. Would they budge? Probably, but not enough to, in our case, not make us house poor were we to try and buy one. In your case, perhaps not enough to make it a good investment. Just some thougths. And I appreciate the input. I'm still mulling this over and it's good to bounce stuff like this off other people. I don't know what the housing market is like in your neck of the woods, but in colorado, we led the nation in forclosure rates for 2 or 3 years. I know a TON of people that are walking away from their homes because they are worth significantly (30-40%) less than they paid for them and owe on them. when the banks liquidate them after foreclosure, you can get some great deals of you do your homework. The only reason I'm in this position is because of where I bought. The old "location location location" thing worked really well for me. while other values wre going down, my house was still going up by 2-3% per year. Now that it has pretty well peaked, I'm thinking it might be time to take the profit and reinvest it into something that dropped. The reason a lot of these dropped is due to massive foreclosures in really nice neighborhoods with great houses. But people bought WAY more house than they could afford with ARM's and baloon loans etc. That has driven the values down in that area. I haven't had 1 forcloseure in my neighborhood in over 7 years. Most of the people who live in my area have their houses paid off as they bought them new in the 60's. Glad I listened to my wife when we were buying. she grew up in that neighborhood. Link to comment Share on other sites More sharing options...
Members Jugghaid Posted January 29, 2009 Author Members Share Posted January 29, 2009 So you want to make money whilt everyone else is suffering....you are just pure pure evil! Yes, yes I am. My brother is worse. Him and one of our good friends are seriously loaded and they are already buying up distressed properties for the long haul. And they are buying the $million + homes. There was one here in town that solf for $8.5 mil 3 years ago that they just bought for a little over $3mil. It may still go down a little but in 10 years it will probably be worth over $10mil easily. Link to comment Share on other sites More sharing options...
Members Emprov Posted January 29, 2009 Members Share Posted January 29, 2009 i just picked up 2400 foreclosed square feet that needs a little love. i figure by the time we're "finished" with the house, we'll have under 50 in it. Nicely done. Link to comment Share on other sites More sharing options...
Members Jugghaid Posted January 29, 2009 Author Members Share Posted January 29, 2009 #1 question is: where do you live?this recession, and this housing market is highly asymmetrical, so there are no general answers to things like this.Many towns my area have seen gains recently, as high as 20% annually, but I live in a place pretty insulated from the recession and the housing bubble. Denver. We led the country for a couple of years (2004 thru 2006) and we were still in the top 10 in forclosure rates in 2007 (at #7) Link to comment Share on other sites More sharing options...
Members Jugghaid Posted January 29, 2009 Author Members Share Posted January 29, 2009 i just picked up 2400 foreclosed square feet that needs a little love. i figure by the time we're "finished" with the house, we'll have under 50 in it.three years ago, similar houses were listing for 130 to 160, and selling like hotcakes. i'll work on this one until the market comes back, and see about flipping it at that point.i'd say do it if your finances will allow it. That's what I'm talking bout. Link to comment Share on other sites More sharing options...
Members Jugghaid Posted January 29, 2009 Author Members Share Posted January 29, 2009 Right now the credit markets seem to be pretty weird, many companies won't lend anything more than 55% LTV, even with A paper, from what I've seen. It doesn't cost that much to list, but I wouldn't be surprised if it didn't move. Guy across the street sold his house, same house as mine, but he did a bit of work to it with remodeling, for $338K. In 2 days. Guy down the street listed his a week ago for $329k and had it under contract the same day. His backs up to the greenbelt like mine does. People literally wait years to find a house on my street. I don't get it, but it is what it is. That's why I feel pretty confident I could get $310k pretty damn quick. Link to comment Share on other sites More sharing options...
Members #6 Posted January 29, 2009 Members Share Posted January 29, 2009 Denver. We led the country for a couple of years (2004 thru 2006) and we were still in the top 10 in forclosure rates in 2007 (at #7) im not a pro, but i would expect denver to see a continued slide in jobs, and therefore a continued slide in housing, especially since I think (correct me if im wrong) but the denver area was one of the fastest growing in terms of new housing over the last decade? So, large inventories will add to the problem. So, I think you are probably either going to come out ahead, or a wash at worst if you go ahead with your plan. My neighbor did this last year, with the same thinking, but we are already seeing rises in prices, so he screwed himself. Different economy, different part of the country though. Link to comment Share on other sites More sharing options...
Members lug Posted January 29, 2009 Members Share Posted January 29, 2009 Yes, yes I am. My brother is worse. Him and one of our good friends are seriously loaded and they are already buying up distressed properties for the long haul. And they are buying the $million + homes. There was one here in town that solf for $8.5 mil 3 years ago that they just bought for a little over $3mil. It may still go down a little but in 10 years it will probably be worth over $10mil easily. Why don't y'all just rip the braces out of poor children's mouths whilst enslaving overseas populations and go ahead and pollute the earth so our decendant will die of horrible diseases! ...cries bitter tears for Mother Earth Link to comment Share on other sites More sharing options...
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