Buying a house at the new top of the market?

[DWCAP]

[quote=AN]
If you can afford to pass down a few hundred grand to your heirs, why wouldn’t you pass down a house instead, especially if you’re in CA. Just the prop 13 alone is enough reason to give your kids house(s) instead of cash.[/quote]

My parents did this. They bought many properties in Santa Barbara back in the day, with two houses (side by side) for their sons. My brother bought his in 2001, just before the market went on a tear.
Problem is, the house isnt huge, and two growing girls take up alot of it. (Not supprisingly the biggest problem they face in a house full of girls is that there isnt enough closet space.) But he is kinda stuck because he inherited my dads property tax. It is STUPID low. It wouldnt cash flow, would cause rifts in the family if sold, and is so damn cheap that moving makes almost no economic sense. He is litterally stuck. (it doesnt help that he is underwater on a condo he bought as a rental. It is sucking up his extra $$)

So maybe $$$ is a better option, as it would let people make personal decisions that better fit their situtation.

[bearishgurl]

[quote=DWCAP]My parents did this. They bought many properties in Santa Barbara back in the day, with two houses (side by side) for their sons. My brother bought his in 2001, just before the market went on a tear.

Problem is, the house isnt huge, and two growing girls take up alot of it. (Not supprisingly the biggest problem they face in a house full of girls is that there isnt enough closet space.) But he is kinda stuck because he inherited my dads property tax. It is STUPID low. . . (it doesnt help that he is underwater on a condo he bought as a rental. It is sucking up his extra $$)
[/quote]

Hijack: DWCAP, if the lot is big enough, you can suggest to him that he add on a room addition to make the house work better for his family.

If he’s short on cash and needs to free up $$, suggest to him to wait for his tenants’ lease to expire and not to renew it. Entice the tenant to remain month-to-month by crafting a *new* rental agreement lowering the rent with the provision that tenant will keep it ready to show with 24 hrs. notice. Then “strategically” default on the condo while possibly collecting rent and then list it as a “short sale” before the NOD is hung. The lender will be more willing to “play ball” since he’s in default. If it doesn’t sell, he will have to let it go.

(Before he does this, tell him open a credit acct. with Home Depot or Lowes so he can get 6 mos. 0% int. on building mat’ls).

He’s in a good place with Prop 13 benefits. Who with a family to support would want to mess that up?? Won’t his credit have time to recover before his kids leave the nest?

This may not sound too “moral” but lots of folks seem to be getting away with it. It’s just a strategic maneuver to think about.

[bearishgurl]

[quote=DWCAP]My parents did this. They bought many properties in Santa Barbara back in the day, with two houses (side by side) for their sons. My brother bought his in 2001, just before the market went on a tear.

Problem is, the house isnt huge, and two growing girls take up alot of it. (Not supprisingly the biggest problem they face in a house full of girls is that there isnt enough closet space.) But he is kinda stuck because he inherited my dads property tax. It is STUPID low. . . (it doesnt help that he is underwater on a condo he bought as a rental. It is sucking up his extra $$)
[/quote]

Hijack: DWCAP, if the lot is big enough, you can suggest to him that he add on a room addition to make the house work better for his family.

If he’s short on cash and needs to free up $$, suggest to him to wait for his tenants’ lease to expire and not to renew it. Entice the tenant to remain month-to-month by crafting a *new* rental agreement lowering the rent with the provision that tenant will keep it ready to show with 24 hrs. notice. Then “strategically” default on the condo while possibly collecting rent and then list it as a “short sale” before the NOD is hung. The lender will be more willing to “play ball” since he’s in default. If it doesn’t sell, he will have to let it go.

(Before he does this, tell him open a credit acct. with Home Depot or Lowes so he can get 6 mos. 0% int. on building mat’ls).

He’s in a good place with Prop 13 benefits. Who with a family to support would want to mess that up?? Won’t his credit have time to recover before his kids leave the nest?

This may not sound too “moral” but lots of folks seem to be getting away with it. It’s just a strategic maneuver to think about.

[bearishgurl]

[quote=DWCAP]My parents did this. They bought many properties in Santa Barbara back in the day, with two houses (side by side) for their sons. My brother bought his in 2001, just before the market went on a tear.

Problem is, the house isnt huge, and two growing girls take up alot of it. (Not supprisingly the biggest problem they face in a house full of girls is that there isnt enough closet space.) But he is kinda stuck because he inherited my dads property tax. It is STUPID low. . . (it doesnt help that he is underwater on a condo he bought as a rental. It is sucking up his extra $$)
[/quote]

Hijack: DWCAP, if the lot is big enough, you can suggest to him that he add on a room addition to make the house work better for his family.

If he’s short on cash and needs to free up $$, suggest to him to wait for his tenants’ lease to expire and not to renew it. Entice the tenant to remain month-to-month by crafting a *new* rental agreement lowering the rent with the provision that tenant will keep it ready to show with 24 hrs. notice. Then “strategically” default on the condo while possibly collecting rent and then list it as a “short sale” before the NOD is hung. The lender will be more willing to “play ball” since he’s in default. If it doesn’t sell, he will have to let it go.

(Before he does this, tell him open a credit acct. with Home Depot or Lowes so he can get 6 mos. 0% int. on building mat’ls).

He’s in a good place with Prop 13 benefits. Who with a family to support would want to mess that up?? Won’t his credit have time to recover before his kids leave the nest?

This may not sound too “moral” but lots of folks seem to be getting away with it. It’s just a strategic maneuver to think about.

[bearishgurl]

[quote=DWCAP]My parents did this. They bought many properties in Santa Barbara back in the day, with two houses (side by side) for their sons. My brother bought his in 2001, just before the market went on a tear.

Problem is, the house isnt huge, and two growing girls take up alot of it. (Not supprisingly the biggest problem they face in a house full of girls is that there isnt enough closet space.) But he is kinda stuck because he inherited my dads property tax. It is STUPID low. . . (it doesnt help that he is underwater on a condo he bought as a rental. It is sucking up his extra $$)
[/quote]

Hijack: DWCAP, if the lot is big enough, you can suggest to him that he add on a room addition to make the house work better for his family.

If he’s short on cash and needs to free up $$, suggest to him to wait for his tenants’ lease to expire and not to renew it. Entice the tenant to remain month-to-month by crafting a *new* rental agreement lowering the rent with the provision that tenant will keep it ready to show with 24 hrs. notice. Then “strategically” default on the condo while possibly collecting rent and then list it as a “short sale” before the NOD is hung. The lender will be more willing to “play ball” since he’s in default. If it doesn’t sell, he will have to let it go.

(Before he does this, tell him open a credit acct. with Home Depot or Lowes so he can get 6 mos. 0% int. on building mat’ls).

He’s in a good place with Prop 13 benefits. Who with a family to support would want to mess that up?? Won’t his credit have time to recover before his kids leave the nest?

This may not sound too “moral” but lots of folks seem to be getting away with it. It’s just a strategic maneuver to think about.

[bearishgurl]

[quote=DWCAP]My parents did this. They bought many properties in Santa Barbara back in the day, with two houses (side by side) for their sons. My brother bought his in 2001, just before the market went on a tear.

Problem is, the house isnt huge, and two growing girls take up alot of it. (Not supprisingly the biggest problem they face in a house full of girls is that there isnt enough closet space.) But he is kinda stuck because he inherited my dads property tax. It is STUPID low. . . (it doesnt help that he is underwater on a condo he bought as a rental. It is sucking up his extra $$)
[/quote]

Hijack: DWCAP, if the lot is big enough, you can suggest to him that he add on a room addition to make the house work better for his family.

If he’s short on cash and needs to free up $$, suggest to him to wait for his tenants’ lease to expire and not to renew it. Entice the tenant to remain month-to-month by crafting a *new* rental agreement lowering the rent with the provision that tenant will keep it ready to show with 24 hrs. notice. Then “strategically” default on the condo while possibly collecting rent and then list it as a “short sale” before the NOD is hung. The lender will be more willing to “play ball” since he’s in default. If it doesn’t sell, he will have to let it go.

(Before he does this, tell him open a credit acct. with Home Depot or Lowes so he can get 6 mos. 0% int. on building mat’ls).

He’s in a good place with Prop 13 benefits. Who with a family to support would want to mess that up?? Won’t his credit have time to recover before his kids leave the nest?

This may not sound too “moral” but lots of folks seem to be getting away with it. It’s just a strategic maneuver to think about.

[DWCAP]

Thanks for the advice, but I dont think he would ever take it. They did consider something similar to what you advise in early 09, but decided not to. The resulting bounce since then has convinced them to hold on till they can get out for even.

There isnt too much room to expand. I dont understand all of it, but it was gonna cost him like a quarter mil+ to put a second story on it. An addition is possible, but not cheap any way it goes.

As for the Condo, they have decided to just suck it up and take the monthly loss. They make great $$$, and if they really wanted to make it up, they could just cut back on the lifestyle alittle. But they dont so they have chosen to remain stuck. Path of least resistance and all that.

It was just an example of how family housing inheritances can sometimes not be optimal.

[DWCAP]

Thanks for the advice, but I dont think he would ever take it. They did consider something similar to what you advise in early 09, but decided not to. The resulting bounce since then has convinced them to hold on till they can get out for even.

There isnt too much room to expand. I dont understand all of it, but it was gonna cost him like a quarter mil+ to put a second story on it. An addition is possible, but not cheap any way it goes.

As for the Condo, they have decided to just suck it up and take the monthly loss. They make great $$$, and if they really wanted to make it up, they could just cut back on the lifestyle alittle. But they dont so they have chosen to remain stuck. Path of least resistance and all that.

It was just an example of how family housing inheritances can sometimes not be optimal.

[DWCAP]

Thanks for the advice, but I dont think he would ever take it. They did consider something similar to what you advise in early 09, but decided not to. The resulting bounce since then has convinced them to hold on till they can get out for even.

There isnt too much room to expand. I dont understand all of it, but it was gonna cost him like a quarter mil+ to put a second story on it. An addition is possible, but not cheap any way it goes.

As for the Condo, they have decided to just suck it up and take the monthly loss. They make great $$$, and if they really wanted to make it up, they could just cut back on the lifestyle alittle. But they dont so they have chosen to remain stuck. Path of least resistance and all that.

It was just an example of how family housing inheritances can sometimes not be optimal.

[DWCAP]

Thanks for the advice, but I dont think he would ever take it. They did consider something similar to what you advise in early 09, but decided not to. The resulting bounce since then has convinced them to hold on till they can get out for even.

There isnt too much room to expand. I dont understand all of it, but it was gonna cost him like a quarter mil+ to put a second story on it. An addition is possible, but not cheap any way it goes.

As for the Condo, they have decided to just suck it up and take the monthly loss. They make great $$$, and if they really wanted to make it up, they could just cut back on the lifestyle alittle. But they dont so they have chosen to remain stuck. Path of least resistance and all that.

It was just an example of how family housing inheritances can sometimes not be optimal.

[DWCAP]

Thanks for the advice, but I dont think he would ever take it. They did consider something similar to what you advise in early 09, but decided not to. The resulting bounce since then has convinced them to hold on till they can get out for even.

There isnt too much room to expand. I dont understand all of it, but it was gonna cost him like a quarter mil+ to put a second story on it. An addition is possible, but not cheap any way it goes.

As for the Condo, they have decided to just suck it up and take the monthly loss. They make great $$$, and if they really wanted to make it up, they could just cut back on the lifestyle alittle. But they dont so they have chosen to remain stuck. Path of least resistance and all that.

It was just an example of how family housing inheritances can sometimes not be optimal.

[an]

Very interesting example DWCAP. I don’t think I would want to leave my children a house that doesn’t cash flow either. Here’s how I see it, when I die, my kids will probably be either almost at retirement or are in retirement themselves, so they would probably have their own primary house and their own investment property(ies). I view this as my own family’s “trust” fund, in a way. My house is probably at break even point today, so I’m sure in 30+ years, it would cash flow then too. Again, I view it as me passing down a passive income to my future generation(s). It requires lots and lots of time to amass a huge family asset. It started w/ my parents and I’ll continue that tradition and build on top of it. I would hope my kids and their kids will build on top of that. I don’t believe in get rich quick scheme, but I do believe if you build family assets over several generations, it will get to a sizable amount eventually.

[an]

Very interesting example DWCAP. I don’t think I would want to leave my children a house that doesn’t cash flow either. Here’s how I see it, when I die, my kids will probably be either almost at retirement or are in retirement themselves, so they would probably have their own primary house and their own investment property(ies). I view this as my own family’s “trust” fund, in a way. My house is probably at break even point today, so I’m sure in 30+ years, it would cash flow then too. Again, I view it as me passing down a passive income to my future generation(s). It requires lots and lots of time to amass a huge family asset. It started w/ my parents and I’ll continue that tradition and build on top of it. I would hope my kids and their kids will build on top of that. I don’t believe in get rich quick scheme, but I do believe if you build family assets over several generations, it will get to a sizable amount eventually.

[an]

Very interesting example DWCAP. I don’t think I would want to leave my children a house that doesn’t cash flow either. Here’s how I see it, when I die, my kids will probably be either almost at retirement or are in retirement themselves, so they would probably have their own primary house and their own investment property(ies). I view this as my own family’s “trust” fund, in a way. My house is probably at break even point today, so I’m sure in 30+ years, it would cash flow then too. Again, I view it as me passing down a passive income to my future generation(s). It requires lots and lots of time to amass a huge family asset. It started w/ my parents and I’ll continue that tradition and build on top of it. I would hope my kids and their kids will build on top of that. I don’t believe in get rich quick scheme, but I do believe if you build family assets over several generations, it will get to a sizable amount eventually.

[an]

Very interesting example DWCAP. I don’t think I would want to leave my children a house that doesn’t cash flow either. Here’s how I see it, when I die, my kids will probably be either almost at retirement or are in retirement themselves, so they would probably have their own primary house and their own investment property(ies). I view this as my own family’s “trust” fund, in a way. My house is probably at break even point today, so I’m sure in 30+ years, it would cash flow then too. Again, I view it as me passing down a passive income to my future generation(s). It requires lots and lots of time to amass a huge family asset. It started w/ my parents and I’ll continue that tradition and build on top of it. I would hope my kids and their kids will build on top of that. I don’t believe in get rich quick scheme, but I do believe if you build family assets over several generations, it will get to a sizable amount eventually.

[Author]

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