nvchaz's Discussions

I am paying $1400/mo rent for a 1600sqft house on a .15 lot. I am a first time homebuyer with good credit. I am offering $105,000 for a 1200sqft house on a .25 lot. I estimate my out of pocket will be about $850/mo. Mr. Obama will give me $8,000 to do this.So why is this not a good deal for me?

Thanks for the interesting comments.Here are more details:I currently rent 7485 Limestone Drive, Reno, NV 89511 for $1400/mo.I put an offer in for $105,000 for 1865 Wrondel Way, Reno NV, today.The house is fundamentally sound but cosmetically terrible. I would need to put in $10K to $20K to make it rentable. I am single and a handyman and I plan to live in it for 3 years while I work on it. The neighborhood is fair but not quite on par with my current neighborhood which is not that great either. It is closer to my work. I have 3 dogs and the large lot has tremendous appeal to me. I also plan to bump out two bedrooms with new baths -- the lot is huge and can take another 800 sqft of house. This is probably the largest lot in the neighborhood -- which are typically .15.I have been pre-approved to $150K.Is this a wise move in today's market? 

Actually, I NEVER want to be a landlord. My intentions are not to rent this out in three years. The rental factor is really just a worst case scenario: what happens if I lose my job? What if I have to take a job in another city? To protect myself in the event of this eventuality, I deem it prudent to get the house rentable for the mortgage as soon as practical. An older three bedroom gets $900 to $1200/mo in Reno currently.I am 56 years old and my true desire is to find a house to retire in. 

Thanks!I spend alot of time each morning with this comb-over.I plan to make it to 76 if my liver holds out.Do they have 20 year mortgages, BTW?

Looks are deceiving, but I can barely balance my checkbook. I have no finance or economics training. I have been watching the situation very closely since September. I read one PhD in economics say that we will be out of the RECESSION in 2010, and a day later another PhD in economics says we will be in a DEPRESSION for 12 years! I can only conclude that no one has a handle on solid economic projections. The waffling of Paulson and Geithner proves the point.So how does this affect me? Well, I put in an offer on a house today, and I spent weeks prior trying to figure out what housing values would be in 10 years, when I plan to retire. The idea being that a smart investment now, that I could turn later, would fund a more comfortable retirement. The $8K credit was the kicker.What are my conclusions? I have no idea what real estate values will be in 10 years. I have to go by my feelings. My only solid feeling is that we will never see 2005-2006 values again, at least in my lifetime. Why? I think those values, in retrospect mind you, were so hideously inflated relative to real wealth that such an occurance is a once in a lifetime event.I settled my mind about my potential purchase by trying to ignore (albeit with some difficulty and I still indulge) speculation about long term real estate valuation. I am trying to ignore the pundits, ("L shaped flatline"? Has this ever occurred in history?), the real estate agents, the economic Phds, the nihilists, the pollyannas, the sharks, and the depressed.I am trying to think in the near term -- what makes sense this month and maybe this year. Try to stay flexible, as liquid as possible, and fast on my feet. Every move with an exit strategy. Optimism and positive energy tempered by caution. Since I can't know the long term, I want to know the short term intimately.So, I decided to buy.

Not flat ... but somewhat flat after a peak not a drop.Displays the futility of trying to extrapolate trends from historical data after a unique and unprecedented series of events and conditions.Those who predict with certainty future events in this climate are either fools, knaves, or both. 

I think so.I am only bidding 1997-1999 prices. In my area, Reno, we are starting to get there. Sometimes it triggers a bidding war and I drop out early. But according to my agent that is happening less and less as more inventory comes in.

So, just close your eyes and rent from someone for 30 years to build his/her equity, wheeee!Forget the $8K kicker. Forget the income tax deduction on interest. Ignore demographics and forget the simple fact that more people are born or arrive in this country every year than die or move away. Or, oh wise real estate pundit, do you predict otherwise?[inappropriate post, removed by moderator]

That's actually pretty funny, Spleng.I like a guy with a sense of humor!

Randy_HRight you are! Purchase price is the hub upon which the wheel turns!If you buy at inflated values, all the incentives, be it tax credits or deductions, equity increase, are actually proportional to initial true value, (however that is determined) rather than the inflated value. You don't need any complete algorythms or spreadsheets to understand that, (unless that sort of thing gives you pleasure).Financial institutions are trying to clear toxic assets from their books.In crisis there is opportunity. I am currently bidding 1997-1999 values and looking for a sweet spinning toxic asset to make my home sweet home.What is true asset value? That's the rub. Spleng implies something close to zero and a real estate agent implores NOW!. When a patch of earth is worth zero we will all blow away like dust. Can we be a nation of renters? On the other hand, when a .15 lot goes for $290K we are obligated to investigate the factors making each square foot of earth so expensive, (note: not valuable). Are those factors somehow tangible or market driven?For example: in rural Nevada, land can be had quite cheap. The issue is the water rights deeded with the land - a tangible value, indeed.So my point: when determining the move to stay renting or buy a home, the most important factors to assess are the immediate and short term impacts such a decision makes on your life. True values are somewhere between the Spleng thesis and the real estate agent thesis. I find it interesting to study the pundits and the number crunchers but find opposing pundits and different crunched numbers every step of the way. I can only conclude that a short term micro (comps, sqft, condition, schools if you have kids, commute, monthly out of pocket, aesthetics,etc.) analysis trumps any kind of macro analysis any pundit can pull out of his magic hat.And I'm look for that spinning toxic asset!