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I don't know that this is the right thing for you NAH. You really don't seem to have the money to throw out on bidding. wouldn't you do better just getting a condo or something? It's not renting at least, but it's less then a house.
I know condos have negatives, but if you want to avoid rent and can only afford a $50k house anyway, I would just get a condo. You'd get a lot more for $50k condo-wise then housewise.
Auctions and foreclosures are generally pretty competitive. The "experts" got in on this years ago. I don't want to be mean, but without extensive knowledge and being there when all this started, you probably don't have the best chance, and then you end up wasting more time.
Suck it up with the "low wages", get a job, work your way up, save up, and get a condo. That's my advice.
There is NO WAY that house is going to be 275!!! You're dreaming!!! It would be a steal at 350!!! It will sell for at least that!
Who knows and we will lose money if we buy it for $350k. $275k is the break even point. House prices are going down despite what you think. That seller(investor?) paid $440k for it a little over a year ago Prices are much lower in my neck of the woods than in Miami
Jammie, do you and your DH plan to rent for the rest of your lives? What is the cost of rent vs. the cost of buying? Dont you feel buying is the cheaper option? By the way if you get quoted at $1200 a month on rent, you could be paying that and living in CA, a much more desirable state
Murphy, my parents are buying that house. It is not going to be mine. Parents will either rent it out to someone(if they can profit) or to me. If they buy that house and rent it to me, ill be paying like $500 a month and my parents will subsidise the other $500 a month because they want me to live near them. You wanted me to rent, well this is my chance. I wouldnt mind renting from my parents, its nothing like renting from a mean, greedy landlord
Who knows and we will lose money if we buy it for $350k. $275k is the break even point. House prices are going down despite what you think. That seller(investor?) paid $440k for it a little over a year ago Prices are much lower in my neck of the woods than in Miami
Jammie, do you and your DH plan to rent for the rest of your lives? What is the cost of rent vs. the cost of buying? Dont you feel buying is the cheaper option? By the way if you get quoted at $1200 a month on rent, you could be paying that and living in CA, a much more desirable state
Murphy, my parents are buying that house. It is not going to be mine. Parents will either rent it out to someone(if they can profit) or to me. If they buy that house and rent it to me, ill be paying like $500 a month and my parents will subsidise the other $500 a month because they want me to live near them. You wanted me to rent, well this is my chance. I wouldnt mind renting from my parents, its nothing like renting from a mean, greedy landlord
Heck of a deal you want to suck your parents into. They pay mortgage, insurance, taxes, up keep on this house while you sit there paying you them $500. a month and they go financially in the hole every month so you can have a cheap place to live. Your a good son, we should all have one so generous. Whats in this deal for them?
Of course. To a Miami resident you can never pay too much for a house. Remember, real estate always goes up, right?
Thats what she thinks. $350k for that house isnt even a good price anymore. I believe that house will drop to $275k in 2009 so thats why we dont wanna bid more than this amount. What do you think?
Quote:
Originally Posted by macguy
Heck of a deal you want to suck your parents into. They pay mortgage, insurance, taxes, up keep on this house while you sit there paying you them $500. a month and they go financially in the hole every month so you can have a cheap place to live. Your a good son, we should all have one so generous. Whats in this deal for them?
They have the money to buy 100% down. Probably wont pay for insurance as the price is too high. In fact my parents might cancel insurance on this house, its been going up, up, up! The HOA and Taxes will be about $11k a year, I will split this cost with my parents. My parents will be able to resell this house at break even once the bottom is over and prices go up very slowly. The only "loss" is the property taxes and HOA and thats half the loss of what renting would be. I dont care if they arent interested, but if my parents want me to live near them, they are going to have to split the costs. They dont mind paying $500 a month
Thats what she thinks. $350k for that house isnt even a good price anymore. I believe that house will drop to $275k in 2009 so thats why we dont wanna bid more than this amount. What do you think?
They have the money to buy 100% down. Probably wont pay for insurance as the price is too high. In fact my parents might cancel insurance on this house, its been going up, up, up! The HOA and Taxes will be about $11k a year, I will split this cost with my parents. My parents will be able to resell this house at break even once the bottom is over and prices go up very slowly. The only "loss" is the property taxes and HOA and thats half the loss of what renting would be. I dont care if they arent interested, but if my parents want me to live near them, they are going to have to split the costs. They dont mind paying $500 a month
It's just so hard to say what really will happen to the housing market. From the condos I've been following, I really don't believe that real estate will go up any time in the near future. It will more then likely go down because you can see the same homes on the internet month after month plus more added to them. It seems nearly impossible that things can keep going the way they had been in Fla. for any longer. Only the wealthy can afford the price that homes were before when you consider the cost of HOAs and insurance and taxes.
I don't really know if we'll rent for life or if we'll buy a small condo. Since we've never moved out of our home state, the wisest thing for us to do is to rent to see if we can adapt. (I'm pretty sure we can get used to the nice temps and the palm trees and the beach ) At this point it's just too far away for us to be comfortable with buying something when we make the move. We'll more then likely rent for the first year and then decide what our next step will be.
We're just at a really different stage in our lives then you are. We've done the home ownership and fixing and remodeling and taxes and insurance and mortgage payment thing. And the area that we are looking at has rent that's quite a bit more reasonable then 1200 a month.
Good idea. However I dont want to rent even one year as I feel it will be a mistake for me. I refuse to pay full prices for those houses but for a big discount, I feel I can at least break even and live at half the cost of rent
Thats what she thinks. $350k for that house isnt even a good price anymore. I believe that house will drop to $275k in 2009 so thats why we dont wanna bid more than this amount. What do you think?
They have the money to buy 100% down. Probably wont pay for insurance as the price is too high. In fact my parents might cancel insurance on this house, its been going up, up, up! The HOA and Taxes will be about $11k a year, I will split this cost with my parents. My parents will be able to resell this house at break even once the bottom is over and prices go up very slowly. The only "loss" is the property taxes and HOA and thats half the loss of what renting would be. I dont care if they arent interested, but if my parents want me to live near them, they are going to have to split the costs. They dont mind paying $500 a month
Your forgetting the capital gain loss of around $15,000 or more a year, depending what kind of investing they do, they are taking by tying up their money in this house. Add that to the $11,000 your quote and even after your tiny contribution they are stuck over $20,000 a year. And they are not going to cancel all the insurance on the house unless they are totally out of their minds which I doubt they are. They will have to carry at least liability and fire on the house that will be around another $2,000 a year added to the $20,000 + they are already losing. Dream on my friend, your parents are smarter then to get involved in this fiasco. It is only a deal if you can flip it right away for a quick profit which it sounds like you can't
Who knows and we will lose money if we buy it for $350k. $275k is the break even point. House prices are going down despite what you think. That seller(investor?) paid $440k for it a little over a year ago Prices are much lower in my neck of the woods than in Miami
Jammie, do you and your DH plan to rent for the rest of your lives? What is the cost of rent vs. the cost of buying? Dont you feel buying is the cheaper option? By the way if you get quoted at $1200 a month on rent, you could be paying that and living in CA, a much more desirable state
Murphy, my parents are buying that house. It is not going to be mine. Parents will either rent it out to someone(if they can profit) or to me. If they buy that house and rent it to me, ill be paying like $500 a month and my parents will subsidise the other $500 a month because they want me to live near them. You wanted me to rent, well this is my chance. I wouldnt mind renting from my parents, its nothing like renting from a mean, greedy landlord
So your parents will foot the bill for you to live there perhaps? That's ridiculous. Are you living off your parents forever? You might as well not go move into the house. IMO, you should learn how to support yourself or you'll be one of those people who never stops living with or off the parents. That's sad. Get a job. Go rent a place for awhile.
I really have a question -- doesn't anyone think this situation screams for this guy to rent? Why are you so opposed NAH? It's one year of your life "throwing out money". You don't seem to have the financial stability to go out buying houses. So just rent. It's not the end of the world!
Your forgetting the capital gain loss of around $15,000 or more a year, depending what kind of investing they do, they are taking by tying up their money in this house. Add that to the $11,000 your quote and even after your tiny contribution they are stuck over $20,000 a year. And they are not going to cancel all the insurance on the house unless they are totally out of their minds which I doubt they are. They will have to carry at least liability and fire on the house that will be around another $2,000 a year added to the $20,000 + they are already losing. Dream on my friend, your parents are smarter then to get involved in this fiasco. It is only a deal if you can flip it right away for a quick profit which it sounds like you can't
I discussed this with my dad and he has a point. The math we did:
1. Mortgage interest loss $15k the first year, $14.5k the next and so on. He says banks amortize meaning they make you pay mostly interest early on in the mortgage and very little into the principle. Its almost as bad as an interest only loan The banks love it when you pay back the loan after a few years as they make big profit on the interest and you still owe them almost all of the principle and have very little equity.
2. I already know the HOA and taxes is a $11k loss
3. Hurricane insurance is required with a mortgage so thats another $3400 a year(and rising every year)
4. If dad sells his stocks and funds to buy the house 100% down he will lose on the capital gains which will be more of a loss than the interest on the mortgage. In fact it can be as much as twice the loss depending on the type of funds and how much it appreciates per year.
5. Theres maintainence and repair costs, figure an average of $2.5k a year
6. We discussed the investment upside to decide if this deal was worth it or not. First we discussed the losses to be around $30k a year. This means in 5 years if we pay $250k for the house, it needs to be worth $400k to break even. But breaking even isnt good enough because if he didnt buy the house and left the money in stocks/funds he would have lots of capital gains and profits.
7. If instead of me living in the house, he rents it out for $21k a year(annual lease) that is still a $9k loss a year plus work to be a landlord. We figure that house which the seller wants $350k to be worth about $300k today(he paid $440k lol) and to be worth $250k in 2009 and go back up in value after the bottom. We figure about 5% appreciation per year from the bottom of $250k so in 5 years or 2014 itll be worth $319k. If we get it for $250k, which dad doubts the seller is gonna be willing to sell for less than $300k and in 7 years the house is worth $319k, that comes out to 3.55% appreciation a year average. But theres a $9k loss per year for $63k in 7 years with a $69k profit in the house. The $6k profit in 7 years is laughable for all the trouble and it doesnt come close to keeping up with inflation. Even leaving your money in the bank is more profitable than this, let alone leaving it in funds!
8. Listen carefully, after doing the math, I realise its a bad idea and not fair to my parents for me to live in that house unless I had won the lottery and have the money to pay. It is way too expensive to live in that house
9. Me and my dad will still have a look at that house. There is one reason for buying the house, if my parents decide they want to downsize and move into this smaller house. Taxes and insurance will be the same but the equity we get from downsizing will go into funds which will appreciate unlike houses which are liabilities(sorry the bubble days of 15-20% appreciation are over)
10. Murphy and a few others suggest I rent. Lets see what rent would cost. In PSL its $900 for a small, old 2 bedroom house or $1200 for a new larger 3 bedroom house. This is way too much money to lose and I will starve as I wont have enough to eat! Those houses cost too much to buy and too much to rent, both ways you lose money.
11. My dad told me $250k houses are for rich people and I thought so. You will need a 6 figure or pushing it with a high 5 figure gross annual income. Dad says a $50k house will be perfect for me. This is what ive been saying all along. Sorry Murphy, dad knows best. You arent even gonna buy a house but rent which will end up costing you just as much but you prefer renting, if its something you like doing, I respect this. I want a house and maybe ill be able to get a $50k house in PSL when house prices drop more and I get a handyman and/or foreclosure special or find a desperate seller willing to give it to me for $50k. Dad says that house in WPB isnt for me, its for rich people. I totally agree and understand.
12. Good chance I wont stay in FL unless I can get an affordable house in a safe area like PSL. There are nice big houses in the northeast for $50k in good condition "by owner" those are the good deals and not overpriced.
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You're dreaming!!! It would be a steal at 350!!! It will sell for at least that!
) At this point it's just too far away for us to be comfortable with buying something when we make the move. We'll more then likely rent for the first year and then decide what our next step will be.
