[airics]

http://www.littlebighomes.com/real-e...las-vegas.html


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[ScoopLV]

Originally Posted by BBMW

Okay, I've had enough going around the block with this. You've convinced yourself you're ahead. I'm not going to convince you otherwise. But I can't see how you can be down 25% in equity, after putting in significant upgrades, and still say you're ahead. I'll just leave it at that.

Hopefully other people have been watching this argument and maybe learned something.

I am ahead COMPARED TO SPENDING $200K IN RENT OVER SEVEN YEARS.

If I were to rent this house, that's what my sunk cost would be -- $200K. Compared to THAT, I'm ahead. I wouldn't be happy living in a Siegel Suite for $600 per month. And even THAT is $50K over seven years. It's bad enough that I have to live in this city. If I had to live here in a small house with no view? I can't even imagine that...

[airics]

Originally Posted by OhClaudia

I rent a hassle free nice one bedroom condo for $675 in Green Valley.
Renting gives. I'm sure he sayse freedom and the lifestyle that I want.
I have no mortgage payments, no student loan, no car payments and I'm debt free. I don't work for my mortgage. My rent has not increased since 2009 and I have a great landlord who fixes all necessary repairs on time.
I buy stocks for long term investment and that's separate from my 10% annual savings.

I personally don't want to be tied down to a mortgage commitment or be stuck in the home. I like the idea of "get up and go" when the need arise, i.e. relocation or other opportunities.

Buying a home can be good for others but definitely not for me. It's a personal preference depending on the lifestyle you choose.

That's fine but you've give your landlord over $24,000. About 3/4 of what he paid for it if he bought in 2009. I'm sure he thanks you..

[logline]

[quoted deleted post]
The bank thanks us all, owners and renters alike. They win no matter what... even when they fail.

The only way to sidestep them is to pay cash for a home, and only a small percentage of us have been able to do so.

[MadManofBethesda]

Originally Posted by ScoopLV

Consider this: When we bought our house in 2007, Bear Sterns and Lehman had collapsed, there was a general panic in the financial markets. The pundits were publicly wondering how much worse 2007 was going to be than 1929. And you suggest that I should have taken all of our money and put it into a crashing market. Sure, invested correctly, that would have been a good idea (except for the fact that we STILL would have needed a place to live). But at the time, without a working crystal ball, that didn't seem particularly wise.

Huh? I have no idea when you purchased your home, but your memory is definitely faulty with regard to the stock market. Not only did neither Bear Sterns nor Lehman collapse in 2007, the market generally rose throughout the year. The S&P 500 gained about 5 1/2% for the year.

[ScoopLV]

Originally Posted by MadManofBethesda

Huh? I have no idea when you purchased your home, but your memory is definitely faulty with regard to the stock market. Not only did neither Bear Sterns nor Lehman collapse in 2007, the market generally rose throughout the year. The S&P 500 gained about 5 1/2% for the year.

In August 2007, Bear Sterns was sued and it was revealed that two of their top funds were wiped out. By the time we bought our house in late 2007, their stock had lost almost $100 per share.

Also in August, 2007, Lehman closed BNC Mortgage. A new CFO was installed. And the firm was hemorrhaging money.

Both companies, and the market in general, was in a tailspin when we closed on this house. The fact that it took a few months for both companies to crash and burn is inconsequential. The writing was on the wall when we bought this place. We didn't know how far things were going to drop. But we knew it wasn't going to be good.

One of the reasons we bought this house in the first place was that we knew we needed someplace to ride out the recession. We decided on this place because we knew we were stuck here for the long haul, and may as well have a nice place.


But, to be fair, let's take one of the more modest houses we looked at in 2007 and decided against. The houses down the hill a bit, on the "wrong" side of Hollywood Blvd, were selling for $200K in 2007. They are currently selling for anywhere between $130K and $150K. At their low point, they were going for a little less than $100K. I have one under contract right now. There's another that's working it's way through the bank hierarchy.

These houses rent consistently (and easily) for $1,000 per month. And it's been this way since we moved here. That's easy math. Seven years of rent is $84K, and the house has lost somewhere between $50-70K. Even with minor maintenance (these houses are all recently built), and property taxes, buying beats renting.

Just about any house in the valley was a good deal in late 2007 compared to renting that exact same house -- with the caveat that the sale was not creatively financed, or equity cashed out every couple years.

[MadManofBethesda]

Originally Posted by ScoopLV

Just about any house in the valley was a good deal in late 2007 compared to renting that exact same house -- with the caveat that the sale was not creatively financed, or equity cashed out every couple years.

I wasn't criticising your decision to buy, just pointing out that your timing was off on certain events and the state of the economy in 2007. Nobody was comparing 2007 to 1929. I've always been a housing proponent, especially for anyone who knows they won't be relocating in the foreseeable future.

[ScoopLV]

Originally Posted by MadManofBethesda

I wasn't criticising your decision to buy, just pointing out that your timing was off on certain events and the state of the economy in 2007. Nobody was comparing 2007 to 1929. I've always been a housing proponent, especially for anyone who knows they won't be relocating in the foreseeable future.

People were already starting to compare to 1929 when we closed. Everything was in freefall at that time.

[LuisSuarez]

Interactive Housing Recovery Map

Use this map to track the recovery where you live

Prices up 26% inventory down 9%

This runaway train is going strong even through the winter slow period.

[BBMW]

Thank you for giving me some reasonable numbers to work with.

So we have a house that in 2007 could be purchased for $200K that today is worth $140K (midway in your range.) So we have negative equity of $60K. You're saying they've been renting consistently for $1000/month, for a total rent of $84K.

Let's say the non-recoverable carrying costs (as I defined previously in this thread) are $650/month. I don't have the exact numbers, but I think this is a reasonable percentage. If you have better numbers to work with, let me know, and I'll recalculate. But working with that, we have total nonrecoverable costs of $54,600 for the same period. So between that and the negative equity, the owner is out $114,600 for the period.

The renter would be ahead by $30,600. So much for buying being a better deal.

Originally Posted by ScoopLV

But, to be fair, let's take one of the more modest houses we looked at in 2007 and decided against. The houses down the hill a bit, on the "wrong" side of Hollywood Blvd, were selling for $200K in 2007. They are currently selling for anywhere between $130K and $150K. At their low point, they were going for a little less than $100K. I have one under contract right now. There's another that's working it's way through the bank hierarchy.

These houses rent consistently (and easily) for $1,000 per month. And it's been this way since we moved here. That's easy math. Seven years of rent is $84K, and the house has lost somewhere between $50-70K. Even with minor maintenance (these houses are all recently built), and property taxes, buying beats renting.

Just about any house in the valley was a good deal in late 2007 compared to renting that exact same house -- with the caveat that the sale was not creatively financed, or equity cashed out every couple years.