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Old 01-21-2008, 03:02 PM
 
495 posts, read 425,120 times
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To the poster if you are still paying attention..............


I recently, just in the last few days heard some other stories of dramatic price drops in house prices. In particular of people the 'have' to sell. The houses were from what I could gather fairly nice house just outside of Missoula in the 300k range and being reduced down to 250k.

Point being is that, there is hope yet. I certainly would be nice if some of the nice homes up in that 250-300k range start coming back to earth in the less than 200k range........I average joe would actually have a change again at a decent place.

I've also heard it said...."yes the person you want to buy from is an older couple who have had the house for a while and bought if for 40k" - because they see it as a 150k profit, verse someone who bought it last year for 250k and has to sell it for a lose and won't budge on the price - the old couple will talk - heck their making 150k on it. If you get my drift.

Hope is on the way........I hope.....who said a housing market crash wasn't good.
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Old 01-21-2008, 04:20 PM
 
Location: SW Montana
355 posts, read 1,077,214 times
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Default One other option

I'm in the Gallatin valley, not Missoula, but I base what I'm going to say on the assumption that the real estate market is approximately the same.

I would think about renting something and then seeing if you can find a small but clean duplex to buy, live in one half and rent out the other. I know a couple people who have done this and enabled themselves to move on into a home of their own in about five years. I have a modest rental here, and expect to have it paid for in about seven years, and my rent price is aways below the going rate. Once it is paid for, it will pay the majority of my home mortgage plus I can use the LLC to offer me financial advantages that I would not otherwise have. To be sure, landlording has it's horror stories but excercise some due diligence and research, plus some street smarts in selecting tenants, and it's not a bad experience.

If you don't feel that dealing with people inhabiting a place is best for you, then perhaps you could consider finding a place where you could rent space for RV, bike, snowmobile, etc. type storage. There are several people doing that around here. The business is fairly straightforward, and if it's cold storage the security, insurance, etc. problems are minimized.

Of course, this plan requires that you have the desire to run the hoops of being in business, which can be a little daunting at first. But it is a way to live on a place that you want and have income coming in to help support the payments. One of my neighbors has a modest newer manufactured home on an acre lot. There is a 12x75 trailer about 150' from the main house and they rent the trailer out to a gal who lives there and has a small massage therapy business. So they are receiving two incomes from the same structure - enough to pay 2/3 of their mortgage. Smart.

Good luck!
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Old 01-23-2008, 02:40 PM
 
495 posts, read 425,120 times
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Or you can always buy a lottery ticket

One of every how many businesses fail ? is it one out of ten.....doesn't sound like good odds to me, I guess that's the chance you take.

In Missoula, typically speak, what a house costs you and what you get back in rent has gone so far out of wack, that in many cases the owner is lucky to have the rent cover his mortgage, and even if you did make 5 percent, why take on the headache, just put your money in the bank and collect the interest.
Most buyers now are betting on that the price of the house will go up in value, not a good bet when it's obvious the market has put in a major long term top.
Sound wisdom not that long ago said, the income on the property should be in the 10 to 15 percent range, or don't even bother thinking about it. Current wisdom(if you wanna call it that is)....the rent will pay the mortgage because it's an "investment" and realestate always goes up (which only helps if it's up when you need to sell it - ask the Japanesse some of the smartest business people in the world lost their butts in realestate in the USA, sure it's up now, put that didn't stop them from losing big time)
Are there still good deals there - NO, at best you'll find an "OK" deal, and unless you get it on the 'inside' - there will be 2 dozen other people like yourself fighting over the same deal.
I know someone who got an "OK" inside deal on a rental about a year ago and they are already looking to get out of it, evidently it isn't working out that good. Don't forget just one month vacancy or repair and your paying the mortage that month out of you pocket, because the income isn't high enough to cover it.
You hear lots of people saying they are doing good.....but no one is every going to say........."man did I make a bad deal"...........so they'll spin it to sound like it's ok, in reality they are probably glad to be breaking ever..
The people doing ok are those that got in early and road the realestate wave up, currently that wave is rolling back out to sea.
So keep you power dry, be patient and sit tight. The best time to buy anything is when they can't give it away....As someone once told me "I can get a bad deal and day of the week, what's the rush"
In missoula if a house has a basement apartment it sells for a premium because it has 'income', but at the same time it's like you bought a house without a basement to use, to me that should make the house worth less, for the priveliage of having a strange live down stairs and getting to unplug their toilet. So it better be really worth it, like 10-15 percent return on your investment, not 5 or break even.
Being a landlord is probably the biggest 'own your own business' in Missoula, everyone you meet is a landlord of one sort or the other. As such rental properties have been driven up aborbadently. People went under in the rental business on the last housing boom in Missoula in the 80s. But of course history never repeats itself, does it ? Personally currently I don't see how you can make money buy a place to rent, to bare out my point, the buying up of small house and turning them into rentals isn't happening anymore, their just to expensive to do that anymore....so they've moved onto the condo thing.
A market crash would only serve to benfit, and would allow alot of first time buyers to come into the market without having to buy some crappy condo or townhouse, which is all you'll currently get.
I say hold out, and drive a hard bargin when the time comes and you'll get 3 times the house for same price as one of those cardboard condos they're building everwhere now. And remember don't rush because "you can get a bad deal any day of the week" and good luck
And look at it this way, as the market slows more and more realestate people and construction people will start losing their jobs and in Missoula that means probably having to leave town to find work, so there will be even more houses on the market that "have to sell".....Which is an unspoken fear no one wants to think about around here, and that is that the whole thing even on a small down turn could reach a tipping point where it all starts to snowball down. And that make some people real nervous.

Last edited by JoeJoeMan; 01-23-2008 at 02:56 PM..
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Old 01-23-2008, 03:19 PM
GLS
 
1,985 posts, read 5,124,608 times
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Quote:
Originally Posted by JoeJoeMan View Post
Or you can always buy a lottery ticket

One of every how many businesses fail ? is it one out of ten.....doesn't sound like good odds to me, I guess that's the chance you take......
.

It's been awhile, but I used to consult for the Small Business Administration.
The rate of failure of new businesses is between 50 to 60% in the first two years. The primary reason for failure is under-capitalization.

The remainder of the points in your post are probably both chilling and realistic.
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Old 01-23-2008, 04:15 PM
 
1,640 posts, read 4,467,365 times
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Quote:
Originally Posted by JoeJoeMan View Post
Or you can always buy a lottery ticket

One of every how many businesses fail ? is it one out of ten.....doesn't sound like good odds to me, I guess that's the chance you take.
We need to compare apples to apples here. It's true that many small businesses fail, however; setting up a LLC to rent out a trailer in the backyard to help w/the mortgage is quite different than deciding you're going to invest your networth in a pygmy rat daycare.

You do have some excellent points and I'm with you that a drop in the market isn't always a bad thing.
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Old 01-23-2008, 11:01 PM
 
3 posts, read 10,051 times
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Thanks everyone. You all have been a big help. I love getting advice from experienced peopel when it comes to making BIG decisions in life. My husband and I have spent the last few weeks researching and planning having a house built. I am not 100% convinced that this is what we should do but I love the idea that for the same price as buying a house we can have a house exactually like we want it. I really like the whole process of designing and decorating homes...it might become a hobby=). I have some fears: going over budget, hidden costs, being unhappy with the work, or the people ect. We know the builder and he is working with us alot on plans, budget, and lecturing us about what we spend and what we can afford. He subs out all his work and is letting us do what we can and want to do( I like that). There are so SO many pros and cons with both buying and building a home that I dont really know if one is better then the other. I just dont know and I just want a house. Man decisions get harder and harder as we all become older and older. Please keep any adivce coming, and thanks again for everything that you have all shared..I really appreciate it!!!Really!
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Old 01-23-2008, 11:21 PM
 
495 posts, read 425,120 times
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mickelburg wrote:
Quote:
I just dont know and I just want a house.
Be carefull and patient now. Mistakes are always made in all things in life, that goes without sayiing. But our mistakes are usually alot easier to take when looking back, if we know that we thought it through and gave it our best shot rather than making a quick emotional decision.
That's just my 2 cents for life in general.....as I've never undertaken the endeavor of having a house built. Good luck
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Old 01-23-2008, 11:25 PM
GLS
 
1,985 posts, read 5,124,608 times
Reputation: 2458
Quote:
Originally Posted by Mickelburgs View Post
Thanks everyone. You all have been a big help. I love getting advice from experienced peopel when it comes to making BIG decisions in life. My husband and I have spent the last few weeks researching and planning having a house built. I am not 100% convinced that this is what we should do but I love the idea that for the same price as buying a house we can have a house exactually like we want it. I really like the whole process of designing and decorating homes...it might become a hobby=). I have some fears: going over budget, hidden costs, being unhappy with the work, or the people ect. We know the builder and he is working with us alot on plans, budget, and lecturing us about what we spend and what we can afford. He subs out all his work and is letting us do what we can and want to do( I like that). There are so SO many pros and cons with both buying and building a home that I dont really know if one is better then the other. I just dont know and I just want a house. Man decisions get harder and harder as we all become older and older. Please keep any adivce coming, and thanks again for everything that you have all shared..I really appreciate it!!!Really!
If it isn't against forum rules, post the name of your builder. Maybe someone here has had experience with him and can share it with you.
It sounds like you are in for an adventure. Hang on tight and enjoy the ride.
Best of luck to you.
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Old 01-24-2008, 08:01 AM
 
Location: LEAVING CD
22,973 posts, read 25,035,816 times
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Having built my house and generalled it myself here are a few pieces of advice for you.
1. YOU WILL GO OVER BUDGET by at least 10%, everybody does so plan on 20% to be safe.

2. Once you have your plans set, and after the walls are being framed DO NOT CHANGE ANYTHING no matter how nice it seems. Change orders will kill your budget. You can change most anything up to the point the walls are up without really hurting yourself but try to avoid the temptation. If you do change anything be sure and SIGN a change order, look at the real cost that's on the order BEFORE you sign. Don't ever go for "trust me".....

3. Don't do what most newbies do. They mess around with the construction plans while building like "ohh, that bathroom would really be nice if it were bigger" or "that closet would look better over there" or "this room really needs to be bigger" and then run out of money at the end and try to cheap out at the finish. Remember, the finish is what people see and they'll be able to tell if you cheap out. I can walk into a house and tell pretty much where the owner/builders ran out of money and started cheaping out.

4. Think about resale and build accordingly. Unless you're planing on living in the house until you die you will enventually want to sell it so that strange triangle office room that was very interesting to you probably won't impress a buyer. It's fine to designe a house that YOU want but try and keep an eye on what a future buyer would want as well. Take a geo dome as an example, I saw one built in whitefish, it was for sale so we went and looked at it. Needless to say it sat for years and finally sold real cheap and you couldn't have paid me to live in it.

5. Get a completion bond! There is no consumer protection here so if your builder or subs walk your only recourse is to sue which trust me takes years.

6. No matter how much you like the builder get references and CALL THEM. Ask if they'd use him again.

7. Go to the local courthouse and run the builders name to see if there's been any lawsuits filed agaisnt him or his business. There's no such thing as the BBB here so you have to do some homework yourself. Go to MT.Gov and make sure he's a registered contractor and be SURE to get proof of comp insurance on him and all the subs. In this state if you don't you can and will be held liable if someone gets hurt.

8.Visit the site daily just to see what's going on and see if it's on schedule. If the site is a pig pen then you can pretty much assume that's the kind of work they're going to do and if it's behind schedule find out why.
As an example, my house took 3 1/2 months to build which is about normal, my neighbors took 7 months. Turns out the builder had a couple of projects going at the same time so he didn't spend full time at any of them and his subs flaked in and out as well. Also, the builder installed the truss's and didn't realize they weren't right until my neighbor pointed it out to him and demanded they be ripped out and changed to meet the plans. So it pays to stay on top of things and understand your plans and keep tabs on how it's going.
Again, and I can't stress this enough, this is Montana, there's virtually NO consumer protection here so it's up to you to do as much as you can to protect yourself.
Good luck!!!!!!

Last edited by jimj; 01-24-2008 at 08:34 AM.. Reason: forgot a few important things
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Old 01-24-2008, 10:26 AM
 
Location: Seattle, WA
1,368 posts, read 6,238,729 times
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Quote:
Originally Posted by JoeJoeMan View Post
mickelburg wrote:


Be carefull and patient now. Mistakes are always made in all things in life, that goes without sayiing. But our mistakes are usually alot easier to take when looking back, if we know that we thought it through and gave it our best shot rather than making a quick emotional decision.
That's just my 2 cents for life in general.....as I've never undertaken the endeavor of having a house built. Good luck

Just because I have to... you people have dealt with some ****ty contractors and agents. A good agent will look for the house you want. Here's a story my father (who was a real estate agent) told me once.

A man calls him up, says he wants to buy a particular house for like $250k. My father asks, great, but why are you calling me and not the listing agent? Man replies, I did. Agent asked him what he did for a living, and the man replied, "I work milking cows for $12/hr." The agent hung up. My father stayed on the phone, and listened a bit more, and the man told him that he had saved up $50k for a downpayment. My father immediately replied that he'd be glad to talk more about the house and got the sale.

A good agent listens to the customer and their needs. Same is true for car salesman, or anyone on commission. Yeah, you may not get that rush sale, but you'll get repeat business. So, I'm sorry people have had lots of bad experiences, but know that not every agent is like that.

Same is true with contractors. But for them, as its been said, reputation and inspecting their work is very very important.
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