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Old 04-14-2015, 02:57 PM
 
2,802 posts, read 3,149,328 times
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Quote:
Originally Posted by stevek64 View Post
For most people, the mortgage payment is the biggest monthly outlay they have. If I just got layed off, yet had a house paid for in cash, it wouldn't take much of a job or 2 for many to meet the basic needs of putting food on table. Plus don't forget one can collect unemployment for at least a year(probably more but I'm not going to get aggravated talking about this) and this alone would probably be enough to make ends meet with a house paid for.
I'm not 100% sure but with our home prices fairly low I would think health care is the biggest expense for most families? Between my employer and me we pay way more for health care than housing even with upkeep included. This is also the biggest factor in personal bankruptcies nationwide.
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Old 04-14-2015, 03:31 PM
 
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I'm trying to stay around $100K. So I know a SFH in that price range for Scottsdale/Tempe/Chandler would put me in the ghetto and/or as you mentioned a bad pool for tenants.

There are actually some good finds I've come across in that range for Scottsdale/Biltmore/Arcadia, but condos/townhomes.
I like the idea of a townhome since to me its a happy medium.
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Old 04-14-2015, 03:51 PM
 
Location: Amongst the AZ Cactus
7,068 posts, read 6,422,753 times
Reputation: 7729
Quote:
Originally Posted by Potential_Landlord View Post
I'm not 100% sure but with our home prices fairly low I would think health care is the biggest expense for most families? Between my employer and me we pay way more for health care than housing even with upkeep included. This is also the biggest factor in personal bankruptcies nationwide.
Very good points.

I would guess most bankruptcies related to health care are from people not carrying any health insurance but never researched the data. And yes, some of those health insurance plans that cover people via work have some high deductibles and are not cheap but I would say even a high deductible health insurance plan should keep most people out of bankruptcy if a bad health event occurs......paying something like 8k in insurance/deductibles is easier to stay out of bankruptcy than a 500k "event" bill for most.
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Old 04-14-2015, 05:55 PM
 
9,676 posts, read 11,039,006 times
Reputation: 8391
Quote:
Originally Posted by WriterDude View Post
I haven't said (not once) that buying a house with cash is "bad" or bad for everyone - clearly it's good for you.
There is no reason to assume I was talking to you. I was quoting asufan who said paying off a mortgage was (more or less) financially stupid.

I'm not risk adverse. To the contrary. I'm logical. Debt other than business debt is not recommended. Sure. Take out a mortgage. But chisel away the debt. That was my 1st goal. To be debt free outside of my business which happened in my mid 30's. My kids dodged debt for college. One's a soon-to-be dentist and the other is going to be a medical doctor (TBD on the specialties). Think HPSP to dodge the MASSIVE tuition debt and their fellow students passed on the same opportunity. Dodging debt while taking risks is my mode of operation. If you think it is a brilliant move, go for it! But I would never ever recommend it.
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Old 04-14-2015, 06:13 PM
 
9,676 posts, read 11,039,006 times
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Quote:
Originally Posted by asufan View Post
Some would argue that there is MORE risk in paying cash for a house than taking out a mortgage. Lets take an example of an average employed person paying $300,000 cash for a house, then loses his/her job for 12 months.
I have a equity line and several lines of credit IF I needed it. They would happily borrow me the money because I have a line of credit attached to my homes. Problem solved.

My age has nothing to do with why I don't want debt. I'm fiscally conservative. I buy homes that are under market from leveraged people who get in trouble. I live way under my means because I don't feel the need to keep up with the Jones. I'm up $150K on my home in Surprise which is one of many RE transactions. I can rent out both of my homes as vacation rentals if I want or need to and could live on just my rental income without any business income. I buy properties only when it makes the most sense. I ONLY invest in my own business and I am proud to say I have zero in the stock market. My bets have been well placed. I'm savvy and I don't have a worry in the world. Do I sound ignorant? I know a lot of business owners that have the same mentality.
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Old 04-14-2015, 07:30 PM
 
Location: Texas
2,847 posts, read 2,485,471 times
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Quote:
Originally Posted by Potential_Landlord View Post
Did you actually read the article you linked? It talks about states with a judicial foreclosure process, which is not the case in AZ. What is your goal with spreading this misinformation?
The article is an overview of the general foreclosure situation. You must have a home to rent or sell or you would not take everything so personal.
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Old 04-15-2015, 09:18 AM
 
Location: LEAVING CD
22,974 posts, read 26,874,403 times
Reputation: 15643
Quote:
Originally Posted by BestintheWest View Post
The article is an overview of the general foreclosure situation. You must have a home to rent or sell or you would not take everything so personal.
But is "possible" shadow inventory germane to the discussion of AZ real estate? I think the answer to that is obvious.
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Old 04-15-2015, 12:46 PM
 
Location: Leaving, California
480 posts, read 840,642 times
Reputation: 738
Quote:
Originally Posted by MN-Born-n-Raised View Post
There is no reason to assume I was talking to you. I was quoting asufan who said paying off a mortgage was (more or less) financially stupid.
So when you post a public message in a public forum, the only people who can respond to your comments without being chided are those who you quote? Wow, that's interesting.

In this conversation, I'm not speaking for asufan, but we have largely parallel positions. We both seem to take the perspective that leverage has a significant value at certain times, and cash purchases have a significant value at other times.

On the other hand, you and stevek are pretty much on the other side of the discussion. Both of you are zero-debt advocates. So if you

Quote:
Originally Posted by MN-Born-n-Raised View Post
I'm not risk adverse. To the contrary. I'm logical. Debt other than business debt is not recommended. Sure. Take out a mortgage. But chisel away the debt. That was my 1st goal. To be debt free outside of my business which happened in my mid 30's. My kids dodged debt for college. One's a soon-to-be dentist and the other is going to be a medical doctor (TBD on the specialties). Think HPSP to dodge the MASSIVE tuition debt and their fellow students passed on the same opportunity. Dodging debt while taking risks is my mode of operation. If you think it is a brilliant move, go for it! But I would never ever recommend it.
Logic is a funny thing, but it's not the opposite of risk aversion. Like everyone, your reasoning process is based on premises. Your premise is that debt is undesirable, and in many cases, it is.

I'm not claiming this is your position, but you need to be aware that anyone who says "avoid debt at all costs" is saying they're willing to pay any cost to avoid debt. It shouldn't be too surprising that not everyone shares that opinion. I'm not sure how far your 'dodging' goes, but debt is not inherently toxic.

I'm glad your kids turned out well, and avoided college debt, but we're not talking about student loans here. Nothing wrong with bragging on your kids, but let's not confuse the issue. We're talking about paying cash for a house in lieu of a 4% mortgage.

In most cases, avoiding mortgage debt at the cost of liquidity has a cost. If you have $10k in the bank, and a mortgage, I believe that keeping the float in the bank is a sensible thing, even though you're not chiseling away debt at that moment. Or in your opinion, if someone has $10k in the bank and a mortgage, should they toss $9500 into a check to the mortgage company? Why or why not?

In this case, I carelessly conflated debt aversion to risk aversion, because that's typically part of the reason people avoid debt. You may think of debt solely in terms of cost, or other factors other than risk, and in that case, that's my mistake. However, I suspect that if you analyze the reason you avoid debt, risk avoidance is at least part of your calculus.

Also, you might want to be careful about presuming extremes. Nobody is saying debt is a brilliant move in the abstract. The only observation here is that cheap mortgage debt is preferable to paying cash for a house. Leveraging cheap debt is nothing more than a tactic for managing money, maximizing returns, and minimizing risk by retaining liquidity.

Or to say it differently, this isn't to in any way disparage your approach, but it would help your case if you could find a wealthy person who has conducted all of their financial activities with cash. I don't think you can find a single person like that. Millionaires leverage. Thousand-aires leverage. Billionaires leverage. Then after they have achieved their investment goals, they de-leverage. They pay off mortgages, they retire debt. Then the wealthy write hypocritical books about how people need to avoid debt, because although leveraging worked for them, they can make a simpler case for debt avoidance even though it isn't as lucrative for their readers. ;-)
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Old 04-15-2015, 04:29 PM
 
Location: Texas
2,847 posts, read 2,485,471 times
Reputation: 1774
Quote:
Originally Posted by jimj View Post
But is "possible" shadow inventory germane to the discussion of AZ real estate? I think the answer to that is obvious.
Maybe both foreclosures and shadow inventory should be considered, that is all I am saying, should be considered

Arizona Foreclosures(current as of 4/14/2015)
10,362 results
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Old 04-15-2015, 07:11 PM
 
Location: LEAVING CD
22,974 posts, read 26,874,403 times
Reputation: 15643
Quote:
Originally Posted by BestintheWest View Post
Maybe both foreclosures and shadow inventory should be considered, that is all I am saying, should be considered

Arizona Foreclosures(current as of 4/14/2015)
10,362 results
Foreclosures are a valid consideration as it's a real,factual,countable thing but when supposed "shadow" inventory is mentioned you're now talking about a Yeti, in other words something that's not proven to exist in AZ except in lore although it's been repeatedly refuted by facts...
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