Big decision time - Chicagoland Sportbikes
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post #1 of 49 (permalink) Old 04-07-2005, 10:57 AM Thread Starter
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Big decision time

Okay...as some of you know I've been trying to move for some time and I have a big decision to make right now.

I've found a great (new) place in an area that I really like, and for a great price, but I can't sleep on it much longer as they are selling fast.

So basically, if I want to get this new house I have to:

1. Clean out my savings accout to cover the ernest money to secure it.

2. Sell my Eclipse and Ninja, among all the other little things I have sitting around that I don't use (probably a good idea in itself).

3. Lower my asking price or do some renovations to my condo to get it to sell ASAP, so I'm not carrying 2 mortages (on a single salary) longer than I can afford to.

4. Minimize by bills; cancel the TV (probably another healthy idea) kill the phone and maybe even internet access (omg). Basically, stop spending money like I have been.

5. Skip the track altogether this summer, as I won't be able to spend a single dollar on anything else until I get the house sold and then pay off that mortage. The bike and insurance is paid for, and I already have plenty of gear for street riding. It would be smartest to put off until next year, but then I already blew $75 on this seaons' Nesba membership.

Honestly, I REALLY want to do this, and I'm quite confident and safe at my currrent job, so I'm not worring about loss of income during this transition. And I'm getting to the point were I need to take some type of risk to get to where I want.

This will give my the new house I wanted to be in before turning 30 (in 2 months) with a garage for my car & bike, and a shorter drive to work. It's also a great layout for a roomate, so I'm trying to find someone that wants to live in Cary for 6-12 months to help offset the bills.

Has anyone done this or think I'm crazy?

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Last edited by shadrach; 04-07-2005 at 10:59 AM.
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post #2 of 49 (permalink) Old 04-07-2005, 11:03 AM
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I just did this! and I do think your crazy but for other reasons.

Ok back to the serious part.

I just ended the double payment of an apartment and a mortgage last month. So I can now start budgetting money for real again. When I moved to Michigan I sold my house in Chicago and stayed in an apartment for a year an a half. Then the opportunity came to buy a house at an excellent price, awesome location and I just jumped on it and took the risk. It was not easy by any means but I am glad I did.

I try to live a life with no regrets, and the decision felt right to me. I have no regrets about buying it. I say go for it

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post #3 of 49 (permalink) Old 04-07-2005, 11:03 AM
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crazy , you asked
Theres ALWAYS another place and it seems like youre taking some risks as well as giving up some basic necessities like TV. If it was me, I wouldnt

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post #4 of 49 (permalink) Old 04-07-2005, 11:06 AM
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Just put your priorities in line and everything will work out fine.

If you want to have a nice new pad by the office - then make the sacrifices to do it. If you want to hit the track - and you don't mind waiting for the next "perfect new house" to come along - then relax and enjoy the summer and start getting the finances in order for the next opportunity.

It sounds to me like you're making an emotional decision (buying the house b/c you like it) and an irrational one (a desire to satisfy a personal goal before you turn 30). Not the best reason to take on an unecessary mortgage and forego the track IMO.

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post #5 of 49 (permalink) Old 04-07-2005, 11:08 AM
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Well,

I was in this predicament about a month ago when I really liked this place in Lemont. I decided against it and here's why:

1. I already have a house and refiguring my finances to squeek by on the second home didn't seem appealing to me at this time while rates are rising and home prices are more likely to cool off now than ever.

2. The house I was looking at was big, 3600 sq. ft. While yes I really liked it, I had to ask if I really needed it with just me and my wife.

3. Interest rates have moved higher than my current rate so my $$$ isn't going as far anymore.

4. I really like my neighbors and friends in the area.

5. Last year circumstances reminded me how hard times could be and All of the above led me to decide stretching finances and selling things associated with what I like to do (like my bikes) just to buy a bigger home which I don't need may not be the smartest idea.


Whatever you do good luck.

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post #6 of 49 (permalink) Old 04-07-2005, 11:12 AM
 
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You want to buy as much house as you can afford. It is tough the first year, but it gets easier and you can resume all the things you enjoy so much. I am buying a new construction townhome and it will be overwhelming for a while, but it is worth it. Real estate is a great investment.
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post #7 of 49 (permalink) Old 04-07-2005, 11:14 AM
 
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Quote:
Originally Posted by Underdog
Just put your priorities in line and everything will work out fine.

If you want to have a nice new pad by the office - then make the sacrifices to do it. If you want to hit the track - and you don't mind waiting for the next "perfect new house" to come along - then relax and enjoy the summer and start getting the finances in order for the next opportunity.

It sounds to me like you're making an emotional decision (buying the house b/c you like it) and an irrational one (a desire to satisfy a personal goal before you turn 30). Not the best reason to take on an unecessary mortgage and forego the track IMO.

G'luck!

+1

Wise words from an EMR sucka

Not to mention, you really do not want a roomate, do you?
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post #8 of 49 (permalink) Old 04-07-2005, 11:14 AM
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I paid two mortgages for FIVE months. I saw, I liked, I bought.
The REAL questions is, Is it worth it to YOU?
Having to live on a budget isn't all that bad. You'll learn a lot about what you need vs what you want.



ps. Why the roommate for a year? What happens after that?

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post #9 of 49 (permalink) Old 04-07-2005, 11:18 AM
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Quote:
Originally Posted by mthal
You want to buy as much house as you can afford. It is tough the first year, but it gets easier and you can resume all the things you enjoy so much. I am buying a new construction townhome and it will be overwhelming for a while, but it is worth it. Real estate is a great investment.

I'm an investor by profession and let me tell you..... Seeing statements like this REALLY scares me as far as the real estate market goes. Besides that a good financial plan starts with your age and other life circumstances. Buying as much home as you can is not the right thing to do for everyone and the phrase "as much as you can" is waaaaaaaaaaaaaaay too subjective.


BTW.....your house is NOT an investment!!!!!!!!

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post #10 of 49 (permalink) Old 04-07-2005, 11:20 AM
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Oh.......btw: I don't know if you're married or not. But if you are a roomate is a REALLY REALLY bad idea

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post #11 of 49 (permalink) Old 04-07-2005, 11:21 AM
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Quote:
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BTW.....your house is NOT an investment!!!!!!!!
I disagree. I think your house (depending on your income level) it is sometimes the only investment you can make. It can really help you on a good financial road.

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post #12 of 49 (permalink) Old 04-07-2005, 11:24 AM
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Quote:
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I disagree. I think your house (depending on your income level) it is sometimes the only investment you can make. It can really help you on a good financial road.

Disagree if you will, but by definition investment is the act of investing; laying out money or capital in an enterprise with the expectation of profit. IT IS NOT!!! laying out money for exchange of shelter Investments should be risk taken with money you can afford to lose. I'm sorry but shelter is a necessity. You can't afford to lose that

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post #13 of 49 (permalink) Old 04-07-2005, 11:26 AM
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Ask yourself "Do I really need a biger place?" I asked myself that 4 years ago and said "hell ya!!" Loking back, I'm a dumb ass, that old piece of shit house has doubled in value due to crazy insane downers grove property values, plus now I have a house that doesnt even have furniture in some rooms, because I have no use for those rooms. I am now looking to downsize and get back into something smaller with more land and room for an extra garage. ANd I want to get the hell out of a subdivion, they suck, no mature trees, rediculously small lots, all the houses are on top of each other the houses and are built flimsy, older homes are built so much better. and the lots are much nicer.




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post #14 of 49 (permalink) Old 04-07-2005, 11:27 AM
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Quote:
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Disagree if you will, but by definition investment is the act of investing; laying out money or capital in an enterprise with the expectation of profit. IT IS NOT!!! laying out money for exchange of shelter


Flex that Masters all you can, but you know what I am saying too. Real state is a way better place to put your money than the market (Unless) you know what the heck you are doing in the market.

You know I am just messing with you

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post #15 of 49 (permalink) Old 04-07-2005, 11:29 AM
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I still want to know about the roommate thing.
What if one loses his/her job? Has an extended stay in the hospital?
Do you have backups? Are they signing leases?

You should be able to do this on your own, as painful as it may be.

Your name is on the mortgage.

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post #16 of 49 (permalink) Old 04-07-2005, 11:29 AM
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Quote:
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Older homes are built so much better. and the lots are much nicer.
Yes, that is for sure. I bought new contruction for my first house, and have not done that ever since. Last house was built in 1972, the one I got now was build in 69. A lot better than the house that was build in 99.

Be careful with new contruction, that is something I did not consider when I first replied to your post.

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post #17 of 49 (permalink) Old 04-07-2005, 11:29 AM
 
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Quote:
Originally Posted by Crazy
I'm an investor by profession and let me tell you..... Seeing statements like this REALLY scares me as far as the real estate market goes. Besides that a good financial plan starts with your age and other life circumstances. Buying as much home as you can is not the right thing to do for everyone and the phrase "as much as you can" is waaaaaaaaaaaaaaay too subjective.


BTW.....your house is NOT an investment!!!!!!!!

I was going to leave that alone. Not to mention, "buy as much as you can afford" is scary. I like to spend money on other things. I bought the cheapest I could find, that offered the amenities that I wanted. I was approved for 100k more than what I bought.

Do the math Logtar. YOU are the one paying the interest, you are not getting paid interest. If the interest you pay on the loan exceeds the rate at which your property appreciates, it is a losing "investment". At best, it should be considered to be a savings account.
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post #18 of 49 (permalink) Old 04-07-2005, 11:32 AM
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Brian, I had to mess with the other Brian! I don't get that apportunity all that often.

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post #19 of 49 (permalink) Old 04-07-2005, 11:33 AM
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Real estate should only be considered an investment when its paying you, such as owning apartment buildings or rental houses, or even comercial properties. Buying a home is just smart way to live since your building some equity instead of just paying rent.




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post #20 of 49 (permalink) Old 04-07-2005, 11:35 AM
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House an investment????

I wouldn't recommend having two house payments, period! Hold your horses! Worry about selling your home 1st, then you can find a nice home anywhere you want. You shouldn't have to sell every luxury you own, cause extra work for yourself (and stress) for a house you like. Sell your current house 1st, find another house, keep your goodies!

House is an investment??? It's partially true (only when you buy BELOW MARKET VALUE and fix it up)but I beleive the proper desciption is a "savings account".
my reason/example:
If you buy a house for $250k in a subdivision that all houses range anywhere from $180k -$260k.....you go ahead and add a nice deck, a swimming pool, marble counter tops, ceramic tile/wood floors. DO You think you're gonna get $275k for that house come selling time. Hell no! There's no house in that subdivision, or area for that matter, selling for that. In this case, it's not an investment.

Last edited by toys4pops; 04-07-2005 at 11:46 AM. Reason: adding a suggestion...
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post #21 of 49 (permalink) Old 04-07-2005, 11:35 AM
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Quote:
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Oh.......btw: I don't know if you're married or not. But if you are a roomate is a REALLY REALLY bad idea
That depends on if the roomate is female and into three ways

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post #22 of 49 (permalink) Old 04-07-2005, 11:35 AM
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My take on it:

Roomates are nice, but you HAVE to be able to pay mortgage without one.

How confident you can sell your current place fast? In my area, I'd have to invest a couple grand into the house, sell it, and MIGHT squeek away with selling it in 4-6 months (Round Lake really sucks for real estate).

Buying a house at the very max of what the mortgage companies will give you isn't the greatest idea (even my real estate agent said that). On top of no fun money, you need incendental expense money, and cars don't last forever so you need to be able to save up for another one of those. Also, in our age bracket, you need fun money or it's a pretty boring life. Yeah, you'd have a great house, which is a good thing because you'd be too broke to go have any fun and you'll need to be spending all summer around it.

I suggest selling off the stuff you don't need anyways, cut down on expenses and save up, buying when it's a little more feasible.

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post #23 of 49 (permalink) Old 04-07-2005, 11:38 AM
 
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Quote:
Originally Posted by Crazy
Disagree if you will, but by definition investment is the act of investing; laying out money or capital in an enterprise with the expectation of profit. IT IS NOT!!! laying out money for exchange of shelter Investments should be risk taken with money you can afford to lose. I'm sorry but shelter is a necessity. You can't afford to lose that
By that logic you should be living in a very cheap apartment. If you don't expect to make a profit on your home, then why would you buy and not rent?

Also the more mortgage interest you pay the less you pay in income taxes. I am not saying go out and buy a 400k house when you make 50k a year. A good mortgage person should be able to tell you how much you can afford.

I am not an investor by profession, but I don't see home prices declining anytime in the future. Even if prices stagnate a bit in the future, the Chicago housing market will most likely remain strong.
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post #24 of 49 (permalink) Old 04-07-2005, 11:39 AM
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Quote:
Originally Posted by logtar


Flex that Masters all you can, but you know what I am saying too. Real state is a way better place to put your money than the market (Unless) you know what the heck you are doing in the market.

You know I am just messing with you

I'm telling you. Thinking that way will eventually land you in trouble. Consider this. You stretch to buy a house. Two years later things didn't improve for you financially and an emergency comes up. Maybe you can't work or get layed off. You stretched so far that now you have to sell. Even if your property appreciated so have others. Now it costs you just as much to get into a smaller house than it did for you to get in this house. You have no job and therefore no credit. So even if you want to break even on the house, Yes break even considering Realter fees and other moving expenses that aren't above and beyond appreciation normally after only 2 years, you can't. Bam foreclosure, and no place to live. A house is NOT a stock that you can dump at any given time bro.

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post #25 of 49 (permalink) Old 04-07-2005, 11:41 AM
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Quote:
Originally Posted by Crazy
I'm telling you. Thinking that way will eventually land you in trouble. Consider this. You stretch to buy a house. Two years later things didn't improve for you financially and an emergency comes up. Maybe you can't work or get layed off. You stretched so far that now you have to sell. Even if your property appreciated so have others. Now it costs you just as much to get into a smaller house than it did for you to get in this house. You have no job and therefore no credit. So even if you want to break even on the house, Yes break even considering Realter fees and other moving expenses that aren't above and beyond appreciation normally after only 2 years, you can't. Bam foreclosure, and no place to live. A house is NOT a stock that you can dump at any given time bro.
+1 I'm seeing that trying to downsize now. I'm looking at house that are half te size of mine that are more than I paid for my house.




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post #26 of 49 (permalink) Old 04-07-2005, 11:44 AM
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Quote:
Originally Posted by HDTony
+1 I'm seeing that trying to downsize now. I'm looking at house that are half te size of mine that are more than I paid for my house.
real estate is a tough market. you shoulda stayed in downers, its much closer to the hooters by me!

Chris
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post #27 of 49 (permalink) Old 04-07-2005, 11:50 AM
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So you wanna be a rock superstar, and live large
A big house, 5 cars......

if you gotta give up all the toys and fun.. it's not worth it. You're a young man.. have some fun dammit and leave real estate to us grownups.
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post #28 of 49 (permalink) Old 04-07-2005, 11:50 AM Thread Starter
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Quote:
Originally Posted by v2neal
That depends on if the roomate is female and into three ways
Dude, I seriously almost had that hooked-up too!

Seriously though, I CAN afford to do this, even alone. Also, my place will sell soon enough, people are buying, just not mine. I have to figure out how to make mine more attractive to potential buyers.

I've been looking since LAST summer and this place is the best thing I have found, and if I pass on it, as picky as I am, it'll be a long time (maybe) never that I find the same thing again. I'm not buying too much house, hell's it's still under $200.

I'm single, no kids, not even a GF now, which makes this an easier time to do this. I dunno.... it's a lot to think about....

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post #29 of 49 (permalink) Old 04-07-2005, 11:53 AM
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Originally Posted by mthal
By that logic you should be living in a very cheap apartment. If you don't expect to make a profit on your home, then why would you buy and not rent?

Also the more mortgage interest you pay the less you pay in income taxes. I am not saying go out and buy a 400k house when you make 50k a year. A good mortgage person should be able to tell you how much you can afford.

I am not an investor by profession, but I don't see home prices declining anytime in the future. Even if prices stagnate a bit in the future, the Chicago housing market will most likely remain strong.

Apartment?????? were do you see the logic in that. Read Brian's post about what you need and what you can afford.

I can get approved for a home 300-400k more than the one I own now, but there is no way I could actually make the payments. They'll give you more than you can afford, trust me.

The write off's on your taxes are not as big as you think when you consider insurance and interest.

Your right you don't see a hit coming in real estate, because your objective should be to live in your house not profit from it. You'd never see that coming just like all those people in TX's didn't see Enron going bankrupt. You just don't know, you take an educated guess. Besides just say your house is an investment. Add up the interest, property tax, and other expenses over the life of a thirty year home. To actually make money your house would need to more than TRIPLE in value!!!!!!!! That may or may not happen either way it's a risk. So looking at your home as a necessity and not as an investment is a much better way of figuring your portfolio

Brian (F.K.A. Crazy)

Gamertag: CRAZY403


“You can’t escape the responsibility of tomorrow by evading it today.”

-Abraham Lincoln


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Meulen is offline  
post #30 of 49 (permalink) Old 04-07-2005, 11:57 AM
 
Join Date: Aug 2003
Posts: 726
           
Notice in my first post I said buy all you can AFFORD. If you can't AFFORD it, don't buy it. Of course you need to work out some kind of budget where you have money for incidentals, food, and entertainment. Live without some luxuries for a year and you should be more comfortable in your new home.

In my personal experience my real estate purchases have been for shelter and investment. My current place has been appreciating from 6-7% a year and I am paying less than 5% interest on the balance of my mortgage. Maybe I am putting my money in the wrong place, but it has done well for me (better than any investment I could have chosen). I will be renting it out soon so it becomes only an investment.
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