Hey MemberSince99, Let's Do a Home-Buying Thread

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JoDa
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Postby JoDa » Wed Feb 26, 2014 6:24 pm

You're both, of course, 100% correct some unknown percentage of the time. Some owners are arses, as are some tenants. My last tenant got her entire security deposit back 6 days (with interest, per law here) after she vacated the property. One of the blinds was broken (the pull cord), but I had no evidence that was *her* fault (could be normal breakage...the blinds appeared to be in good shape, but I bought the place with them in there, so I don't know how old they are) and it cost me only $35 to replace anyway. The rest of the stuff I did (painting and replacing the closet doors) were either normal maintenance or something that I knew was broken but hadn't gotten around to fixing yet because it was functional enough. I put the security deposit in a separate savings account and don't touch it unless I need to. Plus, I have NO carpet to clean, and that's 100% intentional. :) I wouldn't hesitate to charge for major damage or filth (or unpaid rent), but normal stuff is normal stuff, and factoring maintenance into your bottom line is part of your JOB as a landlord.

But I've had the terrible landlord before. I lived in one complex where I was warned they would not only charge me for cleaning the carpets, but charge me double the actual cost. So, I had the carpets cleaned the day I moved out, after all my stuff was loaded up. They STILL tried to charge me nearly 3x what I paid to have the carpets cleaned. I wrote them a letter demanding they provide evidence the service was necessary, and they sent me pictures OF AN ENTIRELY DIFFERENT APARTMENT. They ended up giving me 2x my security deposit back in court (plus court fees, but those weren't much) because they refused to back down on that (and other ridiculous charges). Small claims is pretty easy provided you keep good records (easier than ever with cell phone cameras that automatically time and date stamp photos...if you want to be REALLY careful, take your photos RIGHT before you hand the keys over, and then take a photo of you handing the keys over), and there's usually a steep penalty for landlords who unjustly withhold security deposit funds (usually 2-3x what the tenant is owed).

I've also LIVED with the terrible tenant. Unfortunately, in that case, the roommates got to mop up the mess (we didn't want to trash our credit), but she'd be a REAL joy to have as a sole tenant. /snark

Also, Member, I got their "credit inquiry explanation letter" form today, and they only needed explanation for inquiries within the last 4 months. If you're at all worried about it, it looks like that's your time frame to abstain from other inquiries. As it stood, all they needed me to do is check a box ("I opened a new account") and give them the latest statement for the account. I asked the loan officer "why 4 months" and she said that sometimes the new account won't pop up on your credit report for a few months, and if it didn't, they need to include it in your DTI calculation. Basically, NBD so long as you keep your debt low. Just be cautious how much is on the card at your statement date.

ALSO, I learned a little about mortgage credit scoring models. Basically, they weight PREVIOUS mortgage history more heavily. Let's just say that, given that little nugget, *those* scores are astoundingly high for me. Like, 30+ points higher than my general consumer credit score. My mortgage officer laughed and said "yeah, any mortgage company would be lucky to have you." I wouldn't worry, you're still a well-qualified buyer from the sound of it.

Finally, in case you couldn't gather, I got the place. Small bidding war, but I got it for less than 2% above list within 24 hours out of 4 total offers. Now I get the joy of moving. OH JOY! ON THE OTHER HAND, two renters I know in my neighborhood have already inquired about renting my place! Apparently, I and my place come across right! (Actually, a 3rd asked, too, but his dog is over 50 pounds and my Association limits to 50 pounds).

Edit to say: 2% above list is small potatoes here, especially for places that are well priced. Our LTS (list-to-sale) across the city is something like 96%. There were actually two units available in that building, and BOTH went under contract within 96 hours of list, even though I didn't think the other one would (layout issues that needed fixed with a couple thousand dollars of construction...I was actually keeping that one as a back up thinking it wouldn't sell quickly!).
CSP $19K
BOA $4K
UMP $11.5K
Target Visa $1.5K


JoDa
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Postby JoDa » Wed Feb 26, 2014 6:32 pm

Oh, also, on the association front, that's why I like SMALL buildings. I only have to get ONE other person to agree with me that a rule is a bad idea in my current primary residence and the measure will fail at vote. I also SCOUR condo docs. All of my buildings have pretty minimal rules meant only to keep the peace and the place looking reasonable. There are a few nits I mind (one building requires that loud noises during quiet hours go on for more than 15 minutes before they're considered a violation, and I've been woken by brief, VERY loud noises before) and a bit of a learning curve for people who aren't legally-minded (some proposed rules are a good idea, but worded all wrong, but I've always been able to explain why we should word them differently and get them passed in a reasonable form), but it overall boils down to NO YOU CANNOT ENCLOSE YOUR PATIO YES YOU MUST CLEAN UP AFTER YOURSELF AND NO YOU CANNOT KEEP THE WHOLE BUILDING UP ALL NIGHT! All make sense in shared *buildings*.
CSP $19K
BOA $4K
UMP $11.5K
Target Visa $1.5K

JoDa
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Posts: 235
Joined: Tue Mar 12, 2013 10:10 pm
Location: United States

Postby JoDa » Fri Feb 28, 2014 7:09 pm

ALSO, AND THIS IS A BIG ONE...today I learned a little about investment properties and capital gains taxes. The general wisdom out there is that if you live in a property for 2 out of the last 5 years, and haven't sold another property in the last 2 years, your gain, up to $250K ($500K for MFJ) is TAX FREE AND DOESN'T COUNT AS INCOME. THAT IS NOT ENTIRELY TRUE!!!! (one more for emphasis) ! IF you move into the property on sale, that's 100% true. IF YOU DON'T, you have to pro-rate ANY time you owned the property between qualified (owner-occupied) and non-qualified uses!!!! (again) ! So, if you buy a property today, rent it out for 2 years, live in it for 2 years, and then sell it, you CAN ONLY CLAIM 50% OF ANY APPRECIATION TAX-FREE AND NOT AS INCOME! If, instead, you moved into it right away, lived there for 2 years, rented it for 3, and then sold it, 100% of your gain up to $250K (or $500K MFJ) is exempt (this would also be the case if you moved into it for a year, rented it for 3, and then moved back into it for the last year and sold it, or any other combination that means YOU MOVED INTO IT RIGHT AWAY *AND* OCCUPIED IT FOR 2 OUT OF 5 YEARS). Apparently, this little nugget didn't get around widely, but it's *super* important. YOU MUST OCCUPY A PROPERTY AS YOUR PRIMARY RESIDENCE UPON SALE OR YOU DON'T GET THE FULL TAX WRITE-OFF ON GAINS AT SALE! Lucky for me I'm doing this anyway with this property (I never have and never will occupy my current investment property because it's just too small for my needs, but my gains on that stand to be so large (I bought it out of foreclosure for about 1/3 its fair-market value...you do the math) I don't care).
CSP $19K
BOA $4K
UMP $11.5K
Target Visa $1.5K

JoDa
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Posts: 235
Joined: Tue Mar 12, 2013 10:10 pm
Location: United States

Postby JoDa » Thu Mar 13, 2014 11:06 pm

Today's lesson is READ EVERYTHING. It turns out the Association in the building where I was planning to buy is not in good financial shape. Or, should I say, in TERRIBLE financial shape. When I *finally* got the documents this week (they took their whole 10 business days to turn them over), I decided to pull out of the transaction. It sucks and it gave me a lot of heartburn, but less heartburn than seeing the fees spiral out of control. Also, be mindful of your jurisdiction's rules about these things. While I didn't need it (it took me 5 minutes to decide I couldn't afford their negligence), here we get 3 business days to decide to pull out, without penalty, from when we get the documents.
CSP $19K
BOA $4K
UMP $11.5K
Target Visa $1.5K

MemberSince99
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Postby MemberSince99 » Fri Mar 14, 2014 6:39 am

JoDa, I would never buy a property that is subject to an association. That just seems too much like living in a socialist country to me. Next thing you know these wacko control freaks will be telling you that you MUST wear a coat and tie to mow your loan (even when it's triple digit heat and muggy) because that's the kind of image they want to project, and if you are caught trying it in shorts and sneakers you'll be fined. And be sure their little Gestapo pets will be out monitoring you to make sure you can't sneak and get away with doing it in the best comfort possible.


I'm just not going to put up with that BS you could not pay ME to live in an association, let alone I pay them to control my life. I'm already paying the government to do that for me and if I want further control I can just go to work. I can barely tolerate that let alone an association. I don't know how you guys put up with that.

JoDa
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Posts: 235
Joined: Tue Mar 12, 2013 10:10 pm
Location: United States

Postby JoDa » Wed Mar 19, 2014 10:45 pm

Member, I think Associations here are slightly different than in smaller cities. Here, we're talking about a condo *building* (owned apartments, communal ownership of the outward structure and "common grounds"), versus a group of busy-body neighbors who go around measuring your "private" grass. It's a necessary evil when single-family homes are out of reach for many people, but the benefits of owning outweigh renting (lower costs, equity accrual, etc.). In this case, the Association was responsible for the outward building and grounds, and me for the interior. They just weren't managing the exterior well. Both of my current places are condos, and we manage the outward stuff well. Again, necessary evil. I'd *never* buy a townhome with its own lawn and structure or single-family home with all that and more subject to an Association, but when buying a *true* condo, them are the breaks. You just have to make sure everyone is one the same page as far as maintaining the building properly.
CSP $19K
BOA $4K
UMP $11.5K
Target Visa $1.5K



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