- Centurion Member
- Posts: 204
- Joined: Tue Oct 30, 2012 10:25 am
- Location: TX
Ah, cool beans. With the saltwater pool bit, I was thinking you were down Houston/Galveston way. I'm also in oil/gas/mesquite/cattle country over here. :o)
I actually think we value a lot of the same things in a house-- space, entertainment value, security. But I think (a) I'd be less likely to commit myself to sharing 20 or 30 years of debt with someone who may or may not marry me at some point during those 20 or 30 years, and (b) be less likely to commit 1/3rd of our collective income for the next 20 or 30 years. One third of Americans are one paycheck away from homelessness. 10% of Americans making over $100k/year would immediately miss their next mortgage payment. 61% of those would not be able to pay their rent or mortgage for more than 5 months.
So with that in mind, I would try and figure out what I wanted that I needed the house to have (ie, beds, baths, etc); features I wanted that I could put in myself at my own pace (outdoor kitchen one year, outdoor tv and stereo another year, etc); what could be changed with new paint/fixtures/flooring; and what features were really cool, but I could live without. (ie, municipal pool is $1/head; a membership at the country club is $x; cost of electricity/chemicals/water/parts/pool service is $y/mo; reminds me of a tenant who complained that her $425/mo rent was too high, but she bought a $200 pool that lasted three months before it got holes in it and spent $200 in water filling it twice because she couldn't be bothered to buy a pack of chlorine tabs.) Then I'd figure out my price point. I want this wishlist, but I only feel secure having to pay $z/month. Then I'd look at the options in my range, sort them according to geography (schools, commute, parks, etc), and see what had good bones that I could start with. I would end up saving myself ($100, $200, $300k) on the house itself, plus interest, over time, and I would be able to eventually get the features I wanted.
The houses I buy as investments tend to be acquired at wholesale, not retail. You're able to find that by finding motivated sellers and being willing to do some fixing up. I get great deals by buying in the winter... few people are voluntarily wanting to move between November and February, and yards don't show so well with brown grass and leafless trees, so sellers are more likely to be more flexible that time of year. Know the difference between structural and cosmetic issues. Lots of people can't see past the cosmetic issues, so that really cuts down on the competition, which puts the seller in a weaker spot. The person who's in a hurry is the one who loses. In my area, I get great steals by looking for FSBO signs... people who are trying to save themselves a realtor's commission. This one house, it was a group of eight heirs trying to sell this house to get the inheritence. The last one was a group of five heirs, who could have sold it a few years previously for three times the amount, but they couldn't agree among themselves. The one before that was one heir, looking to cash out his inheritance. The one before that was a house flipper who made a poor choice of where to buy a house sight-unseen, and just wanted to be rid of the thing. Before that, it was a bank foreclosure... trying to sell a house in the middle of nowhere at D/FW prices, and failing for 2 years. Before that, the guy was going to jail, and wanted to get some cash before he went away. Before that, it was a landlord who had soured on the biz and wanted to retire and wanted to be done with his houses. For our current primary residence, it sat on the market for two years, went through two different realtors, rejected our offer, went through two more realtors, went to auction twice, and the third time, we got it at an awesome price at about half of our first offer. We could never have touched a place like this in D/FW, but we moved in three Halloweens ago, and we'll have the whole thing paid off in Jan or Feb 2014 because we've been paying down 3x the note each month, but we could always go back to the minimum payment if we ever had a financial crisis.
I'm not saying "Go buy a slum, fix it up, and be happy". :oP But I am saying to take your time, get a feel for what's out there in your area of interest, watch what comes on the market, how long it stays, what it sells for, etc. Find five, ten, fifteen, twenty fabulous houses that would be absolutely perfect for you and your family, so that when you do find "the perfect one", you're not comparing it to what you currently have... you're comparing it to the competition, in all aspects of the competition. Enjoy your mortgage-free house in the meantime, save up, get yourself in a good position, and don't make yourself vulnerable two, three, four years down the road by buying too expensive, too fast.