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Talked a cousin out of buying (hopefully)!

By rfsanders   Follow   Mon, 8 Oct 2012, 12:28pm   1,628 views   22 comments
In Fontana CA 92336   Watch (2)   Share   Quote   Permalink   Like (3)   Dislike  

After a visit to SoCal a few months back, my cousin and her husband (plus toddler and twins on the way) were talking about buying a house because they needed the space. I pulled up the "Eight reasons why it's a terrible time to buy a house," page on this site, and started reading a few of 'em off.

Unlike every other foolish peer of mine (ages 25-30), they weren't so emotionally dead set on buying, that they listened!

Recently, she posted on her blog. Here are a few excerpts:

"So I always planned on renting an apartment, scrimping and saving, until I could afford to buy a home. I admit it, I thought renting a home when you could buy was a dumb idea. Why pay thousands when you could put that money into a home of your own? Here's the thing, you may be in a situation where you need more space, but that doesn't mean it's a better deal to buy the space, than to rent it."

"Now I'm not saying that I'm completely convinced and will totally throw all other plans to the wind in favor of some ideas I just learned. But I am taking comfort because I have been really sick of the waiting game lately. I want a house! More specifically I want: Backyard, Garage, Laundry Room, Privacy, Central A/C, Dishwasher in just about that order! So I guess the point of all this is that it's nice to know that those things aren't as far away as I might think. I don't have to buy a home in order to live in one (though it would be nice!), in fact, it's probably better for me not to buy a home right now. So in the meantime, my strategy is: save, save, save!"

The site is working! I am a Mormon, and served as a missionary about seven years ago. I felt a commitment to something I believe in (Jesus Christ) and shared it with those interested in listening, and felt so happy to see a change in their life.

I share that only because this experience ... feels almost like the EXACT same thing, albeit in a different way. Patrick calls this site a "mission," and it effectively is. It's great to learn about the true decay behind mortgage financing and price fixing, and being able to have access to the articles and data to 'evangelize' smart finances. And it's even better to see my friends and relatives who are my age have a positive financial change in their lives.

Hopefully the first of many relatives and friends I can talk into postponing home debtorship.

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1. Strategic Renter Follow Befriend 31 threads 98 comments

   1   1:47pm Mon 8 Oct 2012   Share   Quote   Permalink   Like (2)   Dislike   Very wise. Most of the housing stock in OC is so old that land value minus the cost of demolition is all you should be paying. I will not pay what is being asked for falling down nasty shacks that I would not let my dog live in.

2. duckhead Follow Befriend 3 threads 81 comments

   2   2:00pm Mon 8 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   “in fact, it's probably better for me not to buy a home right now. So in the meantime, my strategy is: save, save, save!" WHAWHAWHAAAAAT?!?!? This is terrrrrrrrrrrrrrrrrible, how could you stop them from paying Realtor ™ commissions… er I mean achieving the American Dream. YOU KILLED THEIR AMERICAN DREAM. My god… save? No no no no no no no no no, banks need you to pay them interest!!! Please pay attention. POOPOWPOW

3. Raw Follow Befriend 10 threads 694 comments

   3   2:55pm Mon 8 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike (2)   rfsanders says After a visit to SoCal a few months back, my cousin and her husband (plus toddler and twins on the way) were talking about buying a house because they needed the space. I pulled up the "Eight reasons why it's a terrible time to buy a house," page on this site, and started reading a few of 'em off. Uh oh! I see a family feud down the road.

4. DaveM_Renter Follow Befriend 7 threads 37 comments San Clemente, CA

   4   3:41pm Mon 8 Oct 2012   Share   Quote   Permalink   Like (2)   Dislike   Just two months ago we moved into a beautiful house 2 miles from the beach in South OC - with all of the things his cousin is looking for: Backyard, Garage, Laundry Room, Privacy, Central A/C, Dishwasher. Additionally we also have a great view, built-in BBQ and smoker and a great cul-de-sac neighborhood with kids my son's age. Also there's a great K-8 school in walking distance. No, we didn't buy for $700k - we're renting for $2500/month!! The same house across the street (but minus the canyon view) now came on the market recently for $680k. Wonder what fool will buy that... As much as I like to have neighbors with kids I would hate to see another family that gets suckered into this rigged game!

5. robertoaribas Follow Befriend (23) 55 threads 3,749 comments Scottsdale, AZ robertoaribas's website

   5   3:54pm Mon 8 Oct 2012   Share   Quote   Permalink   Like   Dislike   DaveM_Renter says o, we didn't buy for $700k - we're renting for $2500/month!! At 3.5%, 20% down, tax = 5000 and ins = 1000 I'm getting a mortgage of $3000 a month... $900 a month is principal the first year... Is tax higher then I'm estimating? mello roos or something? Not as good as the Phoenix market obviously, but price/rent isn't as terrible as you're claiming... I'd delay the self congratulatory back slapping for a few years...

6. rufita11 Follow Befriend (3) 10 threads 162 comments San Ramon, CA

   6   6:33pm Mon 8 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   robertoaribas says DaveM_Renter says o, we didn't buy for $700k - we're renting for $2500/month!! Is tax higher then I'm estimating? mello roos or something? Tax is probably way higher than you are estimating. More like 14K for a 700K house, depending on exact location. You should probably run your comparison at zero down, because that is what a renter has invested in the property. They also don't have to worry about maintenance on a place that is near the ocean and probably about 25 years old or more.

7. robertoaribas Follow Befriend (23) 55 threads 3,749 comments Scottsdale, AZ robertoaribas's website

   7   8:21pm Mon 8 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   rufita11 says robertoaribas says DaveM_Renter says o, we didn't buy for $700k - we're renting for $2500/month!! Is tax higher then I'm estimating? mello roos or something? Tax is probably way higher than you are estimating. More like 14K for a 700K house, depending on exact location. You should probably run your comparison at zero down, because that is what a renter has invested in the property. They also don't have to worry about maintenance on a place that is near the ocean and probably about 25 years old or more. an additional $600 a month in property tax makes renting look a good deal better. I don't run it at zero down, because despite the big down payment, the real likelihood, is that 10 years later, the buyer is sitting on a fair pile of equity, despite the nitwit hordes on this board.

8. Raw Follow Befriend 10 threads 694 comments

   8   8:29pm Mon 8 Oct 2012   Share   Quote   Permalink   Like   Dislike   robertoaribas says rufita11 says robertoaribas says DaveM_Renter says o, we didn't buy for $700k - we're renting for $2500/month!! Is tax higher then I'm estimating? mello roos or something? Tax is probably way higher than you are estimating. More like 14K for a 700K house, depending on exact location. You should probably run your comparison at zero down, because that is what a renter has invested in the property. They also don't have to worry about maintenance on a place that is near the ocean and probably about 25 years old or more. an additional $600 a month in property tax makes renting look a good deal better. I don't run it at zero down, because despite the big down payment, the real likelihood, is that 10 years later, the buyer is sitting on a fair pile of equity, despite the nitwit hordes on this board. You should still run it at zero down as Rufita states because you have an opportunity cost on your equity. That is why CAP rates ignore loan costs in their calculation.

9. robertoaribas Follow Befriend (23) 55 threads 3,749 comments Scottsdale, AZ robertoaribas's website

   9   9:45pm Mon 8 Oct 2012   Share   Quote   Permalink   Like   Dislike   Use the new york times rent vs buy calculator and analyze it...

10. CaffeineAddict Follow Befriend 3 threads 59 comments

    10   11:51pm Mon 8 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Congratulations on probably convincing them to do the right thing and thinking with their brain.

11. ELC Follow Befriend (3) 3 threads 657 comments Fort Lauderdale, FL

    11   4:57am Tue 9 Oct 2012   Share   Quote   Permalink   Like (2)   Dislike   rfsanders says I believe in (Jesus Christ) When will they learn... Deuteronomy 23:19 ESV “You shall not charge interest on loans to your brother, interest on money, interest on food, interest on anything that is lent for interest." Romans 13:8 ESV "Owe no one anything, except to love each other, for the one who loves another has fulfilled the law." Psalm 15:5 ESV "Who does not put out his money at interest and does not take a bribe against the innocent. He who does these things shall never be moved."

12. ELC Follow Befriend (3) 3 threads 657 comments Fort Lauderdale, FL

    12   5:02am Tue 9 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   robertoaribas says I'm getting a mortgage And you're funding known criminals. You're going to find Karma is a bitch.

13. 37108605 Follow Befriend 1 threads 1,055 comments

    13   5:49am Tue 9 Oct 2012   Share   Quote   Permalink   Like   Dislike   Strategic Renter says I will not pay what is being asked for falling down nasty shacks that I would not let my dog live in. You are NOT alone.

14. 37108605 Follow Befriend 1 threads 1,055 comments

    14   5:50am Tue 9 Oct 2012   Share   Quote   Permalink   Like   Dislike   ELC says When will they learn... THEY don't believe in these values so learning them is not an issue for them.

15. jerrypap Follow Befriend 21 comments

    15   6:44am Tue 9 Oct 2012   Share   Quote   Permalink   Like   Dislike (1)   Now OC may seem overpriced - but it is OC..,(location, location, location) As for the rest of the nation (90%) there has NEVER been a better time to buy.

16. Strategic Renter Follow Befriend 31 threads 98 comments

    16   6:58am Tue 9 Oct 2012   Share   Quote   Permalink   Like   Dislike   jerrypap says Now OC may seem overpriced - but it is OC..,(location, location, location) As for the rest of the nation (90%) there has NEVER been a better time to buy. Have you seen OC lately. It is an illegal alien overun dump. And there have been many better times to buy in the past as there will be in the future. The Quote is the only correct part of your statement.

17. 37108605 Follow Befriend 1 threads 1,055 comments

    17   7:01am Tue 9 Oct 2012   Share   Quote   Permalink   Like   Dislike   Strategic Renter says jerrypap says Now OC may seem overpriced - but it is OC..,(location, location, location) As for the rest of the nation (90%) there has NEVER been a better time to buy. Have you seen OC lately. It is an illegal alien overun dump. And there have been many better times to buy in the past as there will be in the future. The Quote is the only correct part of your statement. You just read my mind. I agree 100%. There were better times to buy in the OC like pre-1975.

18. ELC Follow Befriend (3) 3 threads 657 comments Fort Lauderdale, FL

    18   11:07am Tue 9 Oct 2012   Share   Quote   Permalink   Like   Dislike   jerrypap says As for the rest of the nation (90%) there has NEVER been a better time to buy. Buy when interest rates are low and then try to sell when interest rates are high because when interest rates go up so do property values. When interest rates are low prices are a bargain. Welcome to Bizzaro World...

19. Strategic Renter Follow Befriend 31 threads 98 comments

    19   11:12am Tue 9 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   when interest rates go up so do property values What are you smoking. How is that remotely possible?.

20. gbenson Follow Befriend 16 threads 376 comments

    20   11:43am Tue 9 Oct 2012   Share   Quote   Permalink   Like   Dislike (1)   Hope you are still getting holiday cards in 5 years when that $500k property you talked them out of is listing for $700k. While you could be right and the price stagnates (or goes down), the SC market is almost entirely built upon rampant speculation and stupid amounts of startup cash. Apply logic and reason to herd mentality problems, and I suppose you'll still be right about half the time :)

21. 37108605 Follow Befriend 1 threads 1,055 comments

    21   11:47am Tue 9 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   gbenson says Hope you are still getting holiday cards in 5 years when that $500k property you talked them out of is listing for $700k. I am not dealing with idiotic mentality any longer. I am out of here.

22. dublin hillz Follow Befriend 10 threads 763 comments Dublin, CA

    22   12:17pm Tue 9 Oct 2012   Share   Quote   Permalink   Like   Dislike (1)   gbenson says Hope you are still getting holiday cards in 5 years when that $500k property you talked them out of is listing for $700k. And if the rents increase by 30% on top of that, he might get "decommissioned" lol.