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Old 02-02-2021, 04:17 PM
 
Location: moved
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Quote:
Originally Posted by Oklazona Bound View Post
Depends what repairs are needed. ...
Indeed. In a vibrant and burgeoning market, the value of the land is such, that the existing house could be torn down. In less vibrant markets, we must be wary of unpermitted construction, shoddy maintenance/repairs, and all sorts of obscured but devastating flaws. My "favorite" is foundations. If the foundation is unsound, then quite literally, the whole house teeters. Joe and Jane Homeowner can't exactly effect a DIY repair of the foundation, using materials and rented tools from Home Depot. Neither for that matter can the average GC. It takes more than three men in a F-350 and a trailer. But to discover such a flaw, is not obvious. In my case, the flaw remained hidden for 15 years, until I had occasion to un-finish the basement. That exercise exposed a buckling wall, of cement blocks improperly laid, on grounds improperly graded or drained.

Again, if the market is good, then even a gullible buyer who disregarded a serious flaw of construction or maintenance, can still profit handsomely. But if the market isn't so good, criteria become more stringent.

I am contemplating renting an apartment in a building with a good location and a commodious dwelling. But casually inspecting the building, I find the construction to be shoddy and the flaws to be substantial. I have no interest in buying the building, even if it cash-flows nicely. I'd rather pay rent. Then, at the next earthquake or hill-slide or whatever, I just call Penske or U-Haul, for their next available moving-truck.
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Old 02-03-2021, 07:04 PM
 
81 posts, read 85,207 times
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Quote:
Originally Posted by WalkingLiberty1919D View Post
This year was partially brutal as I had a leaking window that had to be replaced and damage fixed. And then the fridge broke and had to be replaced. And then the furnace needed repairs.
.
What was the cost of the window, fridge, and furnace repair?

Consult with an expert before liquidating your home to pay for a potentially questionable college degree. Not all have equal value, despite having the same price.

I feel terrible for you, having to deal with caring for 2 generations. You must be under a lot of stress. I hope you can find some peace.

Quote:
Originally Posted by City Guy997S View Post
Also factor in some people don't want to own anything, they would rather have $5000 rims on their $1000 car, the latest sneakers on their feet and new Iphone in hand! It is priorities........home ownership isn't one of them.
I get that, but the original question was posed under the context that the cost to rent was higher than owning. If that were the case, the fastest way to those $5000 rims is to pay less to own when renting is $1100 vs. owning is $750.
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Old 02-04-2021, 11:46 PM
 
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A home of only that much cost says: It is a fixer upper needing a lot of work, and will not be available for a low down payment loan, and probably any loan of any kind.
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Old 02-05-2021, 11:03 AM
 
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Quote:
Originally Posted by multifarious View Post
I get that, but the original question was posed under the context that the cost to rent was higher than owning. If that were the case, the fastest way to those $5000 rims is to pay less to own when renting is $1100 vs. owning is $750.

A lot of people are the result of the environment they grew up in. If the people they know value nice rims over home ownership they are likely to think the same way. I have driven through trailer parks. You often see newer SUV's parked next to an old trailer that is barely still standing. Their car is worth way more than their home. In Arizona where there are lots of trailer parks people pay overinflated prices for the trailers because they can get it for $500 down or whatever. So they are paying 5 or 10 years to pay off the trailer, paying too much for the lot and paying a used car lot for their high end SUV. But they have bad credit so they can't go to a new car dealer and get 0% financing. That is the kind of person who should be driving an old car, saving up their money and then buying a real house. Perhaps something like you talked about. But if they ever have extra money or a stimulus check its gets spent on stuff right away. They never get over the hump. In fact more than likely they pay 4 years on the trailer, hit a financial snag and have to move out losing all the equity they paid into it. And everyone they know is in the same boat so they don't think they are doing things the wrong way.


15 years ago I was buying and flipping cheap homes. I was picking them up on poor shape for $8,000 to $12,000 or so. Painting them, doing minor repairs and flipping them for $35-$45K. People I knew asked me why don't the locals who live there do the same thing? It was simple. $8,000 might as well be a million. Most of the people there had never had $8,000. It was totally unattainable to them.
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Old 02-05-2021, 03:13 PM
 
Location: moved
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Quote:
Originally Posted by Oklazona Bound View Post
A lot of people are the result of the environment they grew up in. If the people they know value nice rims over home ownership they are likely to think the same way. I have driven through trailer parks. You often see newer SUV's parked next to an old trailer that is barely still standing.
Some houses have a market value of $0. They require more in repairs than they'd be worth, if properly repaired. The financially reasonable approach, is to ignore them. No further maintenance. Just live in them while living is still possible, and then abandon them.

The SUV with ridiculous rims is an example of devoting one's passions to what one likes, rather than what conventional wisdom insists. Conventional wisdom insists that it's salutary to like new kitchens and granite countertops and so forth. Rims meanwhile are for gangbangers. Well, what if I don't give a [expletive] about countertops, because I eat out nearly every meal anyway? Am I a fool and a lightweight, for desiring the flashy rims?

Quote:
Originally Posted by Oklazona Bound View Post
15 years ago I was buying and flipping cheap homes. I was picking them up on poor shape for $8,000 to $12,000 or so. Painting them, doing minor repairs and flipping them for $35-$45K. People I knew asked me why don't the locals who live there do the same thing? It was simple. $8,000 might as well be a million. Most of the people there had never had $8,000. It was totally unattainable to them.
That's one explanation. Another is that that $8000 house would actually need $50,000 of work, were I to be attempting it, because I don't know [expletive] about houses. For for me, the wiser business-proposition is to pay you, $40K for the house that you had just flipped.
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Old 02-05-2021, 05:39 PM
 
30,025 posts, read 11,616,146 times
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Quote:
Originally Posted by ohio_peasant View Post
The SUV with ridiculous rims is an example of devoting one's passions to what one likes, rather than what conventional wisdom insists. Conventional wisdom insists that it's salutary to like new kitchens and granite countertops and so forth. Rims meanwhile are for gangbangers. Well, what if I don't give a [expletive] about countertops, because I eat out nearly every meal anyway? Am I a fool and a lightweight, for desiring the flashy rims?
No problem buying things that you like. But if it means you don't have money for things you need like a down payment on a home well that is a problem long term.

Quote:
Originally Posted by ohio_peasant View Post
That's one explanation. Another is that that $8000 house would actually need $50,000 of work, were I to be attempting it, because I don't know [expletive] about houses. For for me, the wiser business-proposition is to pay you, $40K for the house that you had just flipped.
I did not know much when I bought my first home. But I hired people who did and worked along side them and learned the trade quickly. You don't have to do the work yourself but you have to know enough to make sure your workers are doing what they are suppose to be doing.

I did not make the houses perfect just clean. First couple I did complete rehab projects. Then I decided to try just painting the homes, clean them up and then sell them as is. I had a two week time frame and a very small budget. I hired locals who knew basic stuff and could do the grunt work. I ended up doing better with the clean up houses. But I see what you mean. If you have to hire a general contractor it gets very expensive.
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Old 02-09-2021, 11:39 AM
 
572 posts, read 321,219 times
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Nobody is dumb enough. They must have reasons to rent and not buy. Reasons unknown to you as you are not in their position.
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Old 02-10-2021, 01:01 PM
 
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Quote:
Originally Posted by multifarious View Post
A friend of mine bought a $40k house in a crappy area.
It needed $15k in renovations.
He rented it out for $1100/mo.
Those are the cold hard numbers, period.
I stopped reading after this for basically one reason.

I don't want to live in a crappy area to make sure my crappy tenant doesn't ruin my cheap house that I just put $15K of HARD money into.

I'll reserve my opinions about the rest of this story.
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Old 02-11-2021, 12:52 PM
 
Location: moved
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Quote:
Originally Posted by Oklazona Bound View Post
No problem buying things that you like. But if it means you don't have money for things you need like a down payment on a home well that is a problem long term.
That is the case, when legitimate needs go unmet, because one's resources are spent on illegitimate wants. But consider: is an expansive and elegant house truly a "need"? Or is it a want, masquerading as a need? Does the hero of our vignette even need to buy a house? Maybe even a studio-apartment is excessive, and all that's really needed is a cot in a basement barracks, with a communal wash-basin? Then perhaps it makes perfect sense to spend the money on a sports-car, which one can use and enjoy on a daily basis, rather than to save the money for a down-payment, on a house that's just an albatross and a burden.

Quote:
Originally Posted by Oklazona Bound View Post
I did not know much when I bought my first home. But I hired people who did and worked along side them and learned the trade quickly. You don't have to do the work yourself but you have to know enough to make sure your workers are doing what they are suppose to be doing.
The issue is less about reaching modicum of proficiency in the various trades, which enable one for for example to mud and paint drywall, or to replace the water heater. Rather, the issue is that a cheap/neglected house will likely have substantial defects. Exhibit #1 is my own soon-to-be-former house. It was improperly sited. The dirt was improperly graded. The foundation was improperly laid. It has been leaking and degenerating for decades. The proper remedy is to jack up the house, setting it aside. Demolish the foundation. Dig out the remnants. Excavate properly. Pour a new foundation. Then reattach the house. I can't even begin to fathom how to do that, and I'm an engineer.

So, how idiotic was the buyer (me!) to have missed these maladies? Very! Why? Well, other than a congenitally doltish and moronic nature, it was a case of defects being well-hidden... such as via a finished basement. Concrete walls bowing and threatening to collapse? Simple! Put 2x4 studs offset from the walls (untreated, of course!) and slap drywall on them. Make sure that the paint is beautiful, that there are plenty of electrical outlets... maybe even inlaid speakers, a pretty chandelier and ceiling fan. Gorgeous! But underneath?

So... in this thread we have a $40K house. On what grounds (see what I did there???) do we establish that the foundation is sound, and that the lingering troubles are only cosmetic?

It's like those before-after transformations, where a flabby and porcine fellow is transformed after a 6-month regimen into a strapping Olympic athlete. Magical! The reality is that the athlete was paid to let himself go, gain weight, slouch and so forth... to create the "before". Then he resumes his normal training and diet, 6 months later returning to "after". Magical!

Thus I say: are there really any legitimate $40K deals? Or do we have a $40K purchase price, needing $140K of remediation?
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Old 02-11-2021, 03:27 PM
 
3,287 posts, read 2,008,603 times
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Quote:
Originally Posted by ohio_peasant View Post


So... in this thread we have a $40K house. On what grounds (see what I did there???) do we establish that the foundation is sound, and that the lingering troubles are only cosmetic?


Thus I say: are there really any legitimate $40K deals? Or do we have a $40K purchase price, needing $140K of remediation?
This is why I'm hesitant to comment more on this thread, as I think the $40K thing (and the rent and the improvement budget) isn't really clear enough in context.

Using a pure hypothetical as an example which $40K home would you have more comfort buying:

a $40K home mixed in with other $40K homes
or
a $40K home mixed in with other $80K homes
or
a $40K home mixed in with other $250K homes

?

To me, every other decision flows from there.
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