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Old 02-22-2007, 04:54 PM
 
Location: Southern Ca but getting out soon
892 posts, read 2,252,830 times
Reputation: 294

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Here is my dilemma -
I want to move out of CA tomorrow but my husband will take a 50% pay cut moving and we have a lot of credit card debt and 2 car payments which living here we can handle no problem but making less money we might not manage. So we are working at paying off our debt and moving in 1 to 2 years out of state. I need to move out the area I am in now do to it is turning ghetto. I was planning on renting but I am thinking of buying a semi fixer upper and remodeling it and making a small (tiny) profit. I figure even if we are stuck with the house for a year or too longer that if we can resale it for more than it would be better than renting? What do you think? How many years do you need to be in a house before you can sell it and not be upside down in it? The rent I am looking to pay is $1400 to $1500 and I think I could get a house for the same amount a month. Thanks for any advice!
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Old 02-22-2007, 05:22 PM
 
279 posts, read 1,764,837 times
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Well being upside down all depends on how much you owe versus how much its worth. But you have to live in a house for 2 years to not have pay capital gains taxes on your profits.
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Old 02-22-2007, 05:27 PM
 
Location: Missouri
6,046 posts, read 22,482,321 times
Reputation: 5138
Don't forget that when you buy this fixer-upper, not only will you be spending money to fix it up, but you will also be paying closing costs when you buy (which can be several thousand dollars) and possibly a seller's commission when you sell (there's another several thousand dollars). I have always read that assuming the market is relatively stable (not extremely hot or cold) you would need to stay in a home for 5 - 7 years before seeing a substantial profit. Of course, if the market is strong for sellers, and you know what you are doing in terms of remodeling, you can make a profit in much less time.
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Old 02-24-2007, 09:27 PM
 
Location: Bloomington IN
7,430 posts, read 9,213,917 times
Reputation: 19116
Default don't give up so soon on your dream to leave CA

It's quite possible that your housing and living expenses will be low enough that you can afford to leave CA sooner. Often the reason for lower pay scales is because the cost of living is much lower. Obviously the car payments and credit card debt won't change, but I would be willing to bet if you researched the rental market in the area you would like to live in, rent is much lower.
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Old 02-26-2007, 03:05 AM
 
Location: Southern Ca but getting out soon
892 posts, read 2,252,830 times
Reputation: 294
Thank you all for the replies so far.
I have researched the rent in the other state and it is easily affordable and we also have family that is willing to let us live with them, which we don't want to impose on them. I know the cost of living is less and we can adjust to the lower pay but I think having as much debt too start off with is not too smart. If we don't pay off our debt now then we will have it a lot longer having to make minimun payments with making less money. If we stay here we can pay off everything within 2 years.
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Old 03-02-2007, 09:04 PM
 
Location: Charlotte area
15 posts, read 66,694 times
Reputation: 17
Have you looked into moving to Charlotte, NC? There are TONS of people who have moved here from CA, FL, NY, NJ, and MA...the housing is so much less expensive. You wouldn't believe what you can get for your money here. The market has really started to go up over the last 2 years especially, because of the influx of people. It is one of the few places left where the real estate market is healthily appreciating. You're probably better off buying rentals here where the rent can pay the mortgage, and watch your equity grow!
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Old 03-05-2007, 01:40 PM
 
Location: Southern Ca but getting out soon
892 posts, read 2,252,830 times
Reputation: 294
We have already picked the city and state will are moving to. It is just a question of when.
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Old 03-05-2007, 01:49 PM
 
474 posts, read 2,075,643 times
Reputation: 249
If you have a lot of credit card debt, plus 2 car payments, plus losing 50% of your current income -- the questiion is, how are you going to qualify for a mortgage? Plus if you buy a fixer, the bank wants to know how you are going to get the funds to fix it up.

You would be much better off renting ... dump all of your extra expenses of owning a home until you can get your credit straightened out. Have you thought about selling at lease one of the cars you have a loan on?

Realistically speaking, you may need to go to a credit counselor and/or a financial consultant to get some concrete advice on this. Moving may not be the answer. It's also going to cost several thousand dollars to relocate. If you are cash poor, you will only get into more credit card debt. You could be in a Catch 22 situation. Renting is the answer.

Let me add: there is no perfect place.
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Old 03-05-2007, 03:19 PM
 
243 posts, read 833,020 times
Reputation: 137
Talking Property Values

Quote:
Originally Posted by lookingfortheperfectplace View Post
Here is my dilemma -
I want to move out of CA tomorrow but my husband will take a 50% pay cut moving and we have a lot of credit card debt and 2 car payments which living here we can handle no problem but making less money we might not manage. So we are working at paying off our debt and moving in 1 to 2 years out of state. I need to move out the area I am in now do to it is turning ghetto. I was planning on renting but I am thinking of buying a semi fixer upper and remodeling it and making a small (tiny) profit. I figure even if we are stuck with the house for a year or too longer that if we can resale it for more than it would be better than renting? What do you think? How many years do you need to be in a house before you can sell it and not be upside down in it? The rent I am looking to pay is $1400 to $1500 and I think I could get a house for the same amount a month. Thanks for any advice!
I am not a realtor but let me ask you, how long have you owned your present home? Where in CA do you Live? Have you looked into what your house will sell on today's market? My stepdaughter bought a home (1800) sq. ft. in Rosmoore, Ca. for $335,000 and seven years later sold it for $465,000 and bought a home in Woodbridge, Va. (5,000) sq. ft. for 395,000. So you see the cost of living is cheaper in other states then in California and if you have owned it for awhile you will more then likely walk away with a bundle in your pocket. Maybe enough to pay cash somewhere else. Just something for you to think about. We bought our home in Albuquerque, NM five years ago for $165,00 and we are putting it on the market in a month for $285,000. We are within reason according to the comps in my neighborhood. Do some checking on the above mentioned things. It might be a happy surprise.
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Old 03-05-2007, 05:38 PM
 
Location: Southern Ca but getting out soon
892 posts, read 2,252,830 times
Reputation: 294
Quote:
Originally Posted by Apple Annie View Post
If you have a lot of credit card debt, plus 2 car payments, plus losing 50% of your current income -- the questiion is, how are you going to qualify for a mortgage? Plus if you buy a fixer, the bank wants to know how you are going to get the funds to fix it up.

You would be much better off renting ... dump all of your extra expenses of owning a home until you can get your credit straightened out. Have you thought about selling at lease one of the cars you have a loan on?

Realistically speaking, you may need to go to a credit counselor and/or a financial consultant to get some concrete advice on this. Moving may not be the answer. It's also going to cost several thousand dollars to relocate. If you are cash poor, you will only get into more credit card debt. You could be in a Catch 22 situation. Renting is the answer.

Let me add: there is no perfect place.

We are not losing 50% pay until we move out of state. Which is why we are not moving this year with our debt we owe. We don't need financial counseling. We make plenty of cash money to cover our expenses. We like to use our credit cards for large items or trips. Staying in Ca, we can easily pay off our debt as we always due yearly. It is when we move that we will take a pay cut. We are qualified for a mortgage here in CA because we make the money to cover our debt plus addtl. mortgage. When we move out of state we will not have the credit car debt or auto loans. One is paid off next month and the other one we will sell when we move out of state along with a third truck that is paid for already.
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