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Might buy a house... Am I crazy?

By joshuatrio following x   2016 May 30, 2:46pm 9,803 views   40 comments   watch   nsfw   quote     share    


So we moved to the Atlanta area 6 months ago and really like it. We're in the burbs, and it's family friendly, good schools and it's been a good move. We'll probably end up staying here for another 5-10 years and raise our kids here (elementary aged).

Just made an all cash offer ($268k) which was accepted - on a nice place with good schools, 3600 sq. ft. - which includes the finished basement. Subdivision built in the 90's. House is in great shape, could use some touch ups and a few odds and ends - but has a new roof and dual a/c units which are new as well.

Anyhow, am I crazy for considering buying now? I see a bunch of shit going on in the world, but at the rate I'm paying rent - this seems to pencil out math wise, if we stick around for a while.

1   someone else   ignore (0)   2016 May 30, 2:57pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

fuck macroeconomics.

if a landlord would at least break even on cash flow (rent for the equivatlent house covers all ownership costs), then it's safe to buy it.

2   Tenpoundbass   ignore (15)   2016 May 30, 3:34pm   ↑ like (1)   ↓ dislike (1)   quote   flag        

We're going to start winning so much we're going to get sick of winning so much.
There will be winning hotlines. And win shaming.

Or it could go the other way, who knows with this lot?

3   APOCALYPSEFUCKisShostikovitch   ignore (38)   2016 May 30, 4:03pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

As long as you buy cash and tell all the bankers to SUCK YOUR COCK!

4   HEY YOU   ignore (7)   2016 May 30, 4:23pm   ↑ like (0)   ↓ dislike (1)   quote   flag        

The listing price must be $2,680,000.
$268,000 is 10% of listing.
Now that's a great price.

When one rents are they living in too much house & impressing themselves or trying to impress others?
Mini storage is cheap if one gets rid of their junk. OH NO! I can't live in a small house with small monthly rent.

5   Strategist   ignore (2)   2016 May 30, 4:26pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

joshuatrio says

Anyhow, am I crazy for considering buying now? I see a bunch of shit going on in the world, but at the rate I'm paying rent - this seems to pencil out math wise, if we stick around for a while.

There's always a bunch of shit going on in the world. That should not be part of your analysis.
Congratulation on your purchase.

6   BlueSardine   ignore (2)   2016 May 30, 4:31pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

Well all sediment aside...you might just find Atlantis!

7   APOCALYPSEFUCKisShostikovitch   ignore (38)   2016 May 30, 4:43pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Aftee you buy walk into a bank president's office every day and announce you bought cash and take a shit on the bank president's desk.

8   Quigley   ignore (0)   2016 May 30, 5:44pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

That's a fantastic price for what you are getting, should be very affordable. Market trends up long term, so if you plan to live there a while you can't lose.

9   CovfefeButDeadly   ignore (5)   2016 May 30, 7:21pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

joshuatrio says

So we moved to the Atlanta area 6 months ago and really like it. We're in the burbs, and it's family friendly, good schools and it's been a good move. We'll probably end up staying here for another 5-10 years and raise our kids here (elementary aged).

Just made an all cash offer ($268k) which was accepted - on a nice place with good schools, 3600 sq. ft. - which includes the finished basement. Subdivision built in the 90's. House is in great shape, could use some touch ups and a few odds and ends - but has a new roof and dual a/c units which are new as well.

Anyhow, am I crazy for considering buying now? I see a bunch of shit going on in the world, but at the rate I'm paying rent - this seems to pencil out math wise, if we stick around for a while.

I'm not understanding what your issue is. Congrats on the purchase.

10   bob2356   ignore (4)   2016 May 30, 8:38pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

joshuatrio says

Just made an all cash offer ($268k) which was accepted - on a nice place with good schools, 3600 sq. ft. - which includes the finished basement. Subdivision built in the 90's. House is in great shape, could use some touch ups and a few odds and ends - but has a new roof and dual a/c units which are new as well.

Anyhow, am I crazy for considering buying now? I see a bunch of shit going on in the world, but at the rate I'm paying rent - this seems to pencil out math wise, if we stick around for a while.

If we stick around? If there is any doubt at all about sticking around then why buy? If not the why worry, you have to live somewhere. Why pay rent when you don't have to unless you can earn enough more than the rent with your 268k cash to make renting worth the hassle.

11   anonymous   ignore (null)   2016 May 30, 10:25pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

joshuatrio says

Anyhow, am I crazy for considering buying now?

no. i remember telling you 6 months ago to consider atlanta as a future target for real estate investment as the "24-hour markets" get saturated.

what you've done is simply park your cash until the next move, with a strong potential upside for passive growth. beats throwing it away on rent.

12   bob2356   ignore (4)   2016 May 30, 11:07pm   ↑ like (0)   ↓ dislike (1)   quote   flag        

Ironman says

bob2356 says

If we stick around? If there is any doubt at all about sticking around then why buy? If not the why worry, you have to live somewhere. Why pay rent when you don't have to unless you can earn enough more than the rent with your 268k cash to make renting worth the hassle.

Just where did you find such brilliance??

It's smarter than anything you've ever posted. of course simply posting quotes from a thomas the train book would accomplish that.

13   dang007   ignore (0)   2016 May 31, 1:45am   ↑ like (0)   ↓ dislike (2)   quote   flag        

The blackstone group bought a bunch of house in the atlanta area, once the economy collapses they are going to dump all of their houses on the market and bail. If u buy u will be stuck with a house that is value less, so if i were you ill wait.

14   Tenpoundbass   ignore (15)   2016 May 31, 5:54am   ↑ like (1)   ↓ dislike (0)   quote   flag        

I think with 3600 sqft for less than $300K you're safe.
Even in Atlanta, someone will always have to move to Atlanta.

15   anonymous   ignore (null)   2016 May 31, 5:59am   ↑ like (0)   ↓ dislike (0)   quote   flag        

What does that type of place rent for?

16   Strategist   ignore (2)   2016 May 31, 6:02am   ↑ like (0)   ↓ dislike (0)   quote   flag        

errc says

What does that type of place rent for?

My guess would be between $1,500 and $1,800.

17   joshuatrio   ignore (0)   2016 May 31, 7:09am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Strategist says

My guess would be between $1,500 and $1,800.

That's probably about right. I'm paying $1500 for a 4 bed place that is about 2000 sq. ft. in a "meh" neighborhood.

18   NuttBoxer   ignore (2)   2016 May 31, 1:06pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

As long as you consider it a luxury, not an investment, then you can't lose.

19   ja   ignore (0)   2016 May 31, 2:46pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

IS 7%-8% gross yield normal in the area? What if you discount HOA fees?

20   Tenpoundbass   ignore (15)   2016 May 31, 3:51pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Wait a minute the OP didn't say anything about HOA fees.

The deals off! I wouldn't pay a penny for it.

21   FortWayne   ignore (4)   2016 May 31, 4:16pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Don't know Atlanta. Can tell you only about CA and some parts of Indiana. If you are not putting up your family as a collateral I think you'll do all right.

22   NuttBoxer   ignore (2)   2016 Jun 1, 1:07pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

Ironman says

There, that makes more sense.

A camper is a shelter. A tent, van, RV, tiny house, all shelters. 3600sq ft is not a necessity to live, and therefore, by definition, is a luxury.

23   Johny   ignore (0)   2016 Jun 1, 6:03pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

Wondering if there is a good place where I can buy and rent out with cash positive ?

24   Strategist   ignore (2)   2016 Jun 1, 6:07pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Johny says

Wondering if there is a good place where I can buy and rent out with cash positive ?

Anywhere depending on the down payment you have in mind.

25   BayArea   ignore (1)   2016 Jun 1, 9:38pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

Patrick is spot on... if as a landlord you would break even in cash-flow on the place, then it's safe to buy.

26   joshuatrio   ignore (0)   2016 Jun 2, 5:20am   ↑ like (1)   ↓ dislike (0)   quote   flag        

Update, we ended up walking away. The house appraised for $260k (not $268) and the seller wouldn't budge on some of the work that needed to be done.

Great place, but the owner hadn't kept up with some of the maintenance. When we asked for some concessions, they wouldn't budge.

BayArea says

Patrick is spot on... if as a landlord you would break even in cash-flow on the place, then it's safe to buy.

Thanks, that's our stance. If we can get a decent place, for a decent price - and get out of the rent race, we'd be happy with that.

NuttBoxer says

A camper is a shelter. A tent, van, RV, tiny house, all shelters. 3600sq ft is not a necessity to live, and therefore, by definition, is a luxury.

Sure, I agree. When you look at the majority of homes out here, you'll find that the majority of homes less thatn $250k are snatched up right away and usually range in the 2000-2400sq. ft. range. Anything over $250k and you can often get 3000 plus sq. ft. when you include a finished basement.

Homes are built on the larger side in the south. We were used to 1500 sq. ft. in California.

27   BlueSardine   ignore (2)   2016 Jun 2, 5:55am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Come again??

NuttBoxer says

3600sq ft is not a necessity to live, and therefore, by definition, is a luxury.

28   someone else   ignore (0)   2016 Jun 2, 7:38am   ↑ like (0)   ↓ dislike (0)   quote   flag        

@Johny in general the poorer the neighborhood, the more likely it is to be cash flow positive

couple of reasons for that:

1. it's harder to actually collect the rent in poor areas (so being cash-flow positive may be only theoretical)
2. poor people don't have downpayments, so they're forced to rent
3. rich people tend to overpay for houses

you can probably be cash flow positive in most of the middle of the country.

29   BayArea   ignore (1)   2016 Jun 2, 9:35am   ↑ like (0)   ↓ dislike (0)   quote   flag        

The appraisal came in $8K too low huh?

This site generally has a special feeling towards real estate agents. It's not much different for "appraisers" and the "analysis" they bring...

And yes, lower priced areas tend to have higher rent:price ratios. There is certainly a hidden premium cost for living in affluent areas, and that cost is obvious when you try to rent the house out.

Ask Mr. Patrick about why he hasn't bought a house in his affluent city. He's likely to tell you that it's cheaper to rent than to buy there. I'm in a similar boat in San Carlos.

30   joshuatrio   ignore (0)   2016 Jun 2, 10:19am   ↑ like (0)   ↓ dislike (0)   quote   flag        

BayArea says

The appraisal came in $8K too low huh?

This site generally has a special feeling towards real estate agents. It's not much different for "appraisers" and the "analysis" they bring...

Pretty much - especially since the appraisal was to my advantage. I refuse to pay more than the appraised amount, simply because 99% of buyers out there are financed - and banks will only lend up to that number. So as a cash buyer, why would I pay more? In the past, cash buyers generally had an advantage.

Not to mention the house needed some work (which I didn't mind doing), but the seller wouldn't come off the $268k figure, so we walked. Between the appraisal and repairs, there are better deals out there.

31   FNWGMOBDVZXDNW   ignore (2)   2016 Jun 2, 10:33am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Sounds like you made a good decision. Is it really hard to find places in Atlanta in the area you want? I would think it would be pretty easy.

32   joshuatrio   ignore (0)   2016 Jun 2, 10:47am   ↑ like (0)   ↓ dislike (0)   quote   flag        

YesYNot says

Sounds like you made a good decision. Is it really hard to find places in Atlanta in the area you want? I would think it would be pretty easy.

Since we are looking for a long term residence for our family - we're being really selective and have a list of "must haves" if we purchase. We figure if this is our permanent home for the next 10+ years, let's get what we want and not compromise. So it's taking a little more time than it would most people.

33   BayArea   ignore (1)   2016 Jun 2, 11:11am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Joshua, cash is king and you did what most of us would do.

Best of luck with the next one. I'd imagine Atlanta suburbs have a mind blowing amount of inventory you can choose from.

34   NuttBoxer   ignore (2)   2016 Jun 2, 12:58pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

You guys have the right approach. We looked a few years back, but market seemed to dictate putting in an offer without even seeing the place.

When it comes to the most expensive purchase you'll ever make, the last thing you should do is rush in.

35   casandra   ignore (0)   2016 Jun 2, 1:35pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

It sounds like you like the location and you did your research. Having a house with no mortgage is a wonderful thing. Congratulations on your new home ! Enjoy !!

36   Johny   ignore (0)   2016 Jun 2, 4:52pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Looking for some rental condo in san diego area in good areas... as cn't really deal with people in shady area.
2BR/2BA condo is almost ~350K with ~$300/month HOA and rent it can bring in is ~$1800/month.

37   BayArea   ignore (1)   2016 Jun 3, 3:10pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

casandra says

Having a house with no mortgage is a wonderful thing

Yup, you only have to worry about increasing annual property taxes, HOA fees, insurance, and maintenance costs. Is it better than the alternative? Sure.

38   bob2356   ignore (4)   2016 Jun 3, 11:45pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

BayArea says

casandra says

Having a house with no mortgage is a wonderful thing

Yup, you only have to worry about increasing annual property taxes, HOA fees, insurance, and maintenance costs. Is it better than the alternative? Sure.

Do you think renters get these things from the tooth fairy? If costs go up, rent goes up.

39   MMR   ignore (0)   2016 Jun 4, 12:00am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Ironman says

That 3600 sq. ft. house, if located in CA would be 4x - 5x the price, probably more, than it is in GA.

YesYNot says

s it really hard to find places in Atlanta in the area you want? I would think it would be pretty easy.

Calling Acworth or Kennesaw 'Atlanta' is like calling Wall twp ' New York'

Buckhead Atlanta prices are nearly as expensive as anything in Orange County or LA county, with schools that are mediocre (north atlanta high 6/10 on zillow)

http://www.zillow.com/homes/for_sale/Tuxedo-Park-Atlanta-GA/pmf,pf_pt/269446_rid/any_days/33.86229,-84.381202,33.843152,-84.408668_rect/14_zm/

Many of the emerging, gentrifying neighborhoods are between 300-400/sf range inside I-285. Also with schools rated 5 or below on zillow and general lack of AP courses (Grady high and Jackson High school come to mind)...Virginia Highlands, Morningside/Lenox Park, Kirkwood

Best schools for academics in Atlanta area are actually outside perimeter in neighborhoods with 150-200/sf in East Cobb county and Gwinnett county.

Acworth has schools rated 9 or 10/10 on zillow but can't even verify if those schools offer AP courses or have close to the caliber of the facilities of the top schools in East Cobb(Walton, Wheeler), Gwinnett county and some schools in Dekalb county (Decatur and Chamblee)

40   CDon   ignore (0)   2016 Jun 20, 4:05pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

rando says

in general the poorer the neighborhood, the more likely it is to be cash flow positive

couple of reasons for that:

1. it's harder to actually collect the rent in poor areas (so being cash-flow positive may be only theoretical)

Its interesting, for years a few posters here (particularly Ace and Ptieman) explained over and over to you why this was the case and why the disparity in yields in poor vs wealthy areas did not mean expensive areas were destined for a crash. /Ten+Reasons+It%27s+A+Terrible+Time+To+Buy+An+Expensive+House

Its a shame you couldn't admit this when the bottom came and it would be of help to those deciding what to do.


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