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Old 05-13-2018, 08:58 AM
 
10,274 posts, read 6,515,435 times
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Quote:
Originally Posted by Dad01 View Post
good points
esp since I like basements so I would not like an area where water table is too high

how can I predict if the area will not go to hell in the next few yrs ?
e.g there are a few areas in the SW suburbs of chicago which were great places to live approx 10-15yrs ago but recently with a lot of people leaving from the south side and cheaper apartment options available these areas are becoming dangerous and school districts suffering.
is it best to avoid any areas < 10 miles of high crime localities or those areas with a lot of cheap housing options, I hate to discriminate on basis of income but its a scary thought to lose 30 % of your home value overnight
You have to be careful with basements. With the water table too high they will be out of the question which is why I've never seen a home in Florida with a basement, Attics are not common here either.

My father has an unfinished basement in the northeast and he needs a sump pump because occasionally after very heavy rains water will still get in. New homes in the area are not being built with basements anymore, don't know if they are not longer allowed. but some people in the neighborhood have finished basements.

You can never predict. We had white flight in the 70s in many areas when minorities moved in. Another thing to keep in mind is that an area that seems good with a lot of older people means when they pass the home is sold and the seller can not discriminate. In many expensive cities bad areas are gentrifying and increasing in value, so you never really know. The displaced people have to go somewhere, and that's to a cheaper area.

10 miles doesn't mean much. Newark NJ is one of the poorest areas (Irvington NJ is worse and closer) and Short Hills NJ is one of the most expensive areas (Time magazines wealthiest community in the US 2014) and they are only 8 miles apart. https://www.distance-cities.com/dist...short-hills-nj Short Hills NJ has a zero % chance of becoming a bad area.

Last edited by LifeIsGood01; 05-13-2018 at 09:18 AM..
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Old 05-13-2018, 09:17 AM
 
16,512 posts, read 17,561,528 times
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Quote:
Originally Posted by Dad01 View Post
Forgive me for using a cliched term but was wondering what are the basic things one can do to buy a relatively "recession proof " house in this market

Obviously no one can accurately predict when or if the housing prices will go up or go down

In the areas I'm interested in upper midwest , the inventory is low and it is pretty much a sellers market

Here was my general principles I'm sticking with when it comes to finding a relatively recession proof house

1-In a good school district obviously for grade/middle and high school

2-smaller house in a subdivision where most houses are higher priced

3-In a town with relatively stable and diversified economy

4-House which is not turn key ready but one in which I can put some sweat equity over the years

5-Not too big , not too small 4 bed/3 bath on average

6-close to public transportation/major highways

7-single family house , not a condo or town house

8-not more than 30 yrs old

PLEase advise if any of the above assumptions are inaccurate and if there is any other suggestions that can be given

the biggest problem I have right now is that inventory is so low that there is a ton of competition for the good deals and esp from cash only buyers

There is no recession proof house. Do what I did. Make sure your payment isn’t anymore than you can truly afford with your income and if you lose your job you have multiple payments stacked up in a account. When I buy a house the payment is made by my investments not my paycheck. I hold enough back in different accounts that I have the money for multiple future payments if something bad happens.
Buy the best house you can find that has the least amount of issues. The bs sweat equity is just that. Unless you KNOW how to do all aspects of repairs in a house you’ll be spending thousands having others do the work.

Learn this phrase. You can’t do it all. I do a lot of stuff around my house but I have a lot of things done. Otherwise I would be working constantly.

Wanna have a safe house in recession times? Don’t chase that bigger better house ladder climbing tactics by selling and buying bigger. And don’t use your house as a ATM. I have never refinanced a cash out refi. The ONLY time I refinanced a property was to go from a 7.25% @ 30 (still had 25 years of payments) to a 4.25 @ 15. My payment went up 100. The loan guy couldn’t believe I didn’t want to take out money. He said he could easily get me 200,000 on top to play with. I declined. It was tempting to go out and buy a bunch of stuff. Really tempting.
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Old 05-13-2018, 09:23 AM
 
10,274 posts, read 6,515,435 times
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Quote:
Originally Posted by Electrician4you View Post
There is no recession proof house. Do what I did. Make sure your payment isnít anymore than you can truly afford with your income and if you lose your job you have multiple payments stacked up in a account. .
And don't buy a house with a high payment in an industry where you job can be phased out or is not stable. Your payments need to be in line to the kind of job that you can quickly get to be able to make your payments while you look for another job. If you are earning $50K make sure you can tighten your belt and survive on a $30K job or if it's a 2 income household make sure the payments can be made if one loses a job temporarily.
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Old 05-13-2018, 09:23 AM
 
Location: Northern Maine
9,510 posts, read 14,303,621 times
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Dad01, the OP, has a good list for suburbia and moderate size towns. In rural America, there is a different list:

3 to 4 bedroom
2 or more baths
Storage building in addition to garage
25 or more acres
Some woods
Some tillable land
Some pasture or potential pasture.
Good water supply for people and critters
Not a flood zone
Year round road access

Bonus is potential passive solar, wind generator and running stream or pond

This property is something you could survive on and rarely leave. This is the property that most preppers want. MANY preppers are moving to Maine. Our winters keep people who are not into self sufficiency from moving to Maine.
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Old 05-13-2018, 09:28 AM
 
Location: Tennessee
21,013 posts, read 15,317,177 times
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Quote:
Originally Posted by Dad01 View Post
And I truly appreciate the feedback !

one more thing I have always gravitated towards burbs of big cities when it comes to buying a house, my thought being big cities ( like STL , chicago size) will always have people looking to move in so it will not be hard to resell

I have stayed away from looking at average sized towns ( under < 300 k) as I feel these town are very dependent on one or two industries and if they close or move then the whole town goes to hell and property prices suffer, case in point Decatur IL, or Danville IL
That's a good rule of thumb. The mega-priced areas could face significant value decline. In your neck of the woods, I'd be looking at the affordable suburbs around Indianapolis. Strong job market with moderate taxes and low housing prices probably won't fall too far.
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Old 05-13-2018, 09:40 AM
 
98 posts, read 40,441 times
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Quote:
Originally Posted by Dad01 View Post
so you think 4 bed/3 bath is too big ?

How about 3 bed /2 bath ? less likely to take a hit ?
I’m not a real estate investor, but as a layperson yes, I would feel better having a house that I felt was the right size to sell to *first-time buyers. Simply because most people don’t move to a bigger house during a recession, but there will always be people who want to enter the market for the first time. ETA: Also, with larger homes you are competing with new builds. They don’t build many new SF starter homes today!

Last edited by CapitalBat; 05-13-2018 at 10:34 AM..
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Old 05-13-2018, 09:46 AM
 
3,046 posts, read 1,216,716 times
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Quote:
Originally Posted by MikeJaquish View Post
Avoid "Mistake Houses."
A "Mistake House" will be the first in your market to take a price hit, and may be very difficult to re-sell should you need to move on or cash out.

1. Flood plains.
2. Adjacent electrical power transmission lines.
3. Significant structural issues, particularly broken foundations.
4. Poor access due to bad driveways. Sloped up or down. Weirdly curved. Side entry garage that doesn't have adequate clearance for easy entry and exit.
5. Adjacent to loud commercial or industrial nuisances.

And, pay cash, or pay it off or pay down any loan.
Nothing frees you up in any market like not being encumbered by a debt that is more than resale value.
1 might not be an issue in some states. Iím from FL and some areas that are heavily flood prone hold their value because the schools are consistently ranked the best in the area/state. So you either take the risk of bad schools, or you take the risk of flooding. The area I moved from was still fairly hot when I left even after the hurricanes and the fact that it was a barrier island due to the quality of the schools. For some, it was a risk people were willing to take because most of the areas that had good schools also came with a higher flood risk.
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Old 05-13-2018, 09:48 AM
 
10,274 posts, read 6,515,435 times
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Quote:
Originally Posted by CapitalBat View Post
to sell to FTB..
Is that a new florist?
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Old 05-13-2018, 10:37 AM
 
5,682 posts, read 7,271,193 times
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Quote:
Originally Posted by Dad01 View Post
so you think 4 bed/3 bath is too big ?

How about 3 bed /2 bath ? less likely to take a hit ?
What's the difference in price between the two? All else equal a 4/3 is probably going to appeal to more people than a 3/2.

But somewhat on that note, if you have a bedroom and bathroom (not necessarily the Master) on the main floor, that will appeal to more people as well.
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Old 05-13-2018, 12:57 PM
 
Location: Illinois USA
291 posts, read 148,354 times
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What about ranch style vs 2 story ? which ones makes it easier to re-sell

What about taxes ? usually they go hand in hand with good schools so should I not try to focus too much on getting in an areas where taxes are lower ? that being said taxes throughout chicagoland are extremely high good or bad schools
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