Dilemma to buy…need your opinions

[Trojan4Life]

Fellow Piggs,

I’ve been reading this blog for at least a couple years and it’s one of the sites I check as soon as I get into my office in the morning for informed news, a good chuckle (Temeculaguy has some classics) and sometimes dating/relationship advice (Marion has added a great new dimension). But now what I really need is some sincere opinions. Realize please that I have read virtually every posting here in the last two years, and I understand the concensus is that RE will continue to drop in the SD area by 10-15% more. Please read my situation and then I welcome/value your input.

I will be retiring from the military in May 2008 with 24 yrs of service and have a fantastic job secured in Los Angeles that will allow me to telecommute 2-3 days per week. The salary is extremely attractive, organization is a great fit, promotion potential is there, etc. The problem is I’m going to get killed on taxes unless I find a write-off. I am married and have two younger children (9 and 6), and have been surgically altered to preclude any more air-breathing tax deductions.

I have been looking around the LA area, mostly Redondo and Hermosa Beach and while I can afford to get into a modest home up here, I really don’t want to swallow that $1M mortgage note in an area my family is not completely happy. I discovered a listing in RB that is REO that I could potentially get at @$600K if the seller comes off asking. I’d sink some $$$ into it between May/August to update kitchen, baths, flooring and backyard landscaping. Obviously great schools are there, and I could just rent a hotel room on the couple of nights a week I need to stay in LA.

So, my questions for you all are:

1. How much do you think a REO listing will come off listing price? Is 10% too much to ask in order to protect myself against future market decline?

2. What would one be looking at to remodel a kitchen with granite, new cabinets, stainless steel etc…I’d like to do it nicely. Likewise, what are bathroom remodels running? Anyone with experience here?

3. Other than the potential loss on the investment until the market bottoms out, and being gone from home 2 nights a week, can anyone see a glaring downside I have not taken into consideration here? I will be able to get in with minimal downpayment using VA-backed loan, so opportunity cost for the downpayment $$$ is not a huge factor (to me anyway).

Thanks, I value you opinions!

Trojan4Life
(What a great Rose Bowl!)

[taz]

T4L,

Congrats on your upcoming retirement!

Having recently remodeled my kitchen, I can address your second question. I spent roughly $36K for a remodel through Home Depot (I’m sure I paid a bit of a premium but I liked the convenience of “one stop shopping”), which involved all new (stock Kraftmaid) cabinetry, soap stone counters, fully tiled walls/backsplash using subway tiles, new appliances (not stainless though, just went with white), new lighting and electrical and updated plumbing. Floors already had new ceramic tile installed (less than 1 year old) which stayed, and no walls were moved. This was for a rather small, galley style 1940’s kitchen. Hope this info helps…

[taz]

T4L,

Congrats on your upcoming retirement!

Having recently remodeled my kitchen, I can address your second question. I spent roughly $36K for a remodel through Home Depot (I’m sure I paid a bit of a premium but I liked the convenience of “one stop shopping”), which involved all new (stock Kraftmaid) cabinetry, soap stone counters, fully tiled walls/backsplash using subway tiles, new appliances (not stainless though, just went with white), new lighting and electrical and updated plumbing. Floors already had new ceramic tile installed (less than 1 year old) which stayed, and no walls were moved. This was for a rather small, galley style 1940’s kitchen. Hope this info helps…

[taz]

T4L,

Congrats on your upcoming retirement!

Having recently remodeled my kitchen, I can address your second question. I spent roughly $36K for a remodel through Home Depot (I’m sure I paid a bit of a premium but I liked the convenience of “one stop shopping”), which involved all new (stock Kraftmaid) cabinetry, soap stone counters, fully tiled walls/backsplash using subway tiles, new appliances (not stainless though, just went with white), new lighting and electrical and updated plumbing. Floors already had new ceramic tile installed (less than 1 year old) which stayed, and no walls were moved. This was for a rather small, galley style 1940’s kitchen. Hope this info helps…

[taz]

T4L,

Congrats on your upcoming retirement!

Having recently remodeled my kitchen, I can address your second question. I spent roughly $36K for a remodel through Home Depot (I’m sure I paid a bit of a premium but I liked the convenience of “one stop shopping”), which involved all new (stock Kraftmaid) cabinetry, soap stone counters, fully tiled walls/backsplash using subway tiles, new appliances (not stainless though, just went with white), new lighting and electrical and updated plumbing. Floors already had new ceramic tile installed (less than 1 year old) which stayed, and no walls were moved. This was for a rather small, galley style 1940’s kitchen. Hope this info helps…

[taz]

T4L,

Congrats on your upcoming retirement!

Having recently remodeled my kitchen, I can address your second question. I spent roughly $36K for a remodel through Home Depot (I’m sure I paid a bit of a premium but I liked the convenience of “one stop shopping”), which involved all new (stock Kraftmaid) cabinetry, soap stone counters, fully tiled walls/backsplash using subway tiles, new appliances (not stainless though, just went with white), new lighting and electrical and updated plumbing. Floors already had new ceramic tile installed (less than 1 year old) which stayed, and no walls were moved. This was for a rather small, galley style 1940’s kitchen. Hope this info helps…

[Aecetia]

I cannot address the real estate purchase issue, but have you driven on the 15 to test your theory? Regarding the remodel costs, if you are your own sub, then I would think you could remodel the kitchen for 50-100K depending on how high end the cabinets, appliances and the flooring, i.e.- marble, travertine, etc.is that you use. The bath I would expect to be less, possibly 25-35. K, depending on such factors as above. My neighbor paid 75. K for his bathroom remodel, but I think he really overpaid and he used someone who advertises extensively, so look for a contractor who needs work, but checks out in terms of no complaints. Ask to visit other places he has remodeled. Landscaping can be a do it yourself project if you do not want a lot of hardscape, which adds a lot of cost to the project. I would guestimate 10-20. K depending on what you want. Good luck.

One more thing, since you are commuting, have you looked at the Temecula area which has good schools and lower prices generally than anywhere, (except Chula Vista) in the San Diego area?

[Aecetia]

I cannot address the real estate purchase issue, but have you driven on the 15 to test your theory? Regarding the remodel costs, if you are your own sub, then I would think you could remodel the kitchen for 50-100K depending on how high end the cabinets, appliances and the flooring, i.e.- marble, travertine, etc.is that you use. The bath I would expect to be less, possibly 25-35. K, depending on such factors as above. My neighbor paid 75. K for his bathroom remodel, but I think he really overpaid and he used someone who advertises extensively, so look for a contractor who needs work, but checks out in terms of no complaints. Ask to visit other places he has remodeled. Landscaping can be a do it yourself project if you do not want a lot of hardscape, which adds a lot of cost to the project. I would guestimate 10-20. K depending on what you want. Good luck.

One more thing, since you are commuting, have you looked at the Temecula area which has good schools and lower prices generally than anywhere, (except Chula Vista) in the San Diego area?

[Aecetia]

I cannot address the real estate purchase issue, but have you driven on the 15 to test your theory? Regarding the remodel costs, if you are your own sub, then I would think you could remodel the kitchen for 50-100K depending on how high end the cabinets, appliances and the flooring, i.e.- marble, travertine, etc.is that you use. The bath I would expect to be less, possibly 25-35. K, depending on such factors as above. My neighbor paid 75. K for his bathroom remodel, but I think he really overpaid and he used someone who advertises extensively, so look for a contractor who needs work, but checks out in terms of no complaints. Ask to visit other places he has remodeled. Landscaping can be a do it yourself project if you do not want a lot of hardscape, which adds a lot of cost to the project. I would guestimate 10-20. K depending on what you want. Good luck.

One more thing, since you are commuting, have you looked at the Temecula area which has good schools and lower prices generally than anywhere, (except Chula Vista) in the San Diego area?

[Aecetia]

I cannot address the real estate purchase issue, but have you driven on the 15 to test your theory? Regarding the remodel costs, if you are your own sub, then I would think you could remodel the kitchen for 50-100K depending on how high end the cabinets, appliances and the flooring, i.e.- marble, travertine, etc.is that you use. The bath I would expect to be less, possibly 25-35. K, depending on such factors as above. My neighbor paid 75. K for his bathroom remodel, but I think he really overpaid and he used someone who advertises extensively, so look for a contractor who needs work, but checks out in terms of no complaints. Ask to visit other places he has remodeled. Landscaping can be a do it yourself project if you do not want a lot of hardscape, which adds a lot of cost to the project. I would guestimate 10-20. K depending on what you want. Good luck.

One more thing, since you are commuting, have you looked at the Temecula area which has good schools and lower prices generally than anywhere, (except Chula Vista) in the San Diego area?

[Aecetia]

I cannot address the real estate purchase issue, but have you driven on the 15 to test your theory? Regarding the remodel costs, if you are your own sub, then I would think you could remodel the kitchen for 50-100K depending on how high end the cabinets, appliances and the flooring, i.e.- marble, travertine, etc.is that you use. The bath I would expect to be less, possibly 25-35. K, depending on such factors as above. My neighbor paid 75. K for his bathroom remodel, but I think he really overpaid and he used someone who advertises extensively, so look for a contractor who needs work, but checks out in terms of no complaints. Ask to visit other places he has remodeled. Landscaping can be a do it yourself project if you do not want a lot of hardscape, which adds a lot of cost to the project. I would guestimate 10-20. K depending on what you want. Good luck.

One more thing, since you are commuting, have you looked at the Temecula area which has good schools and lower prices generally than anywhere, (except Chula Vista) in the San Diego area?

[waterboy]

Congrats on retiring from military after 24yrs of service and best wishes with the new job

1. Don’t rush into buying a home just because your looking for a tax write-off. It’s nice to be able to write it off but I don’t think it is a huge benefit.

2. I’ve made some offers on REO lately and the listing agents usually say don’t come in at more than 20% off, but do whatever you want as most of the time they are not looking at mult. offers and you can counter back and forth. BTW I haven’t got a bank to accept 20% or more off but properties are still listed and I’ll see if they lower asking prices over the next few months.

3. If you have no experience remodeling then you”ll soon find out some companies will quote $40-$50k for a new kitchen….an avg master bath quote can run $20k. All depends on materials and size.

I personally wouldn’t buy right now (even in a nice are of RB) unless you can get something 20-25% below current comps. We still have a big mess ahead and it isn’t worth the stress of losing $100k + of equity over the next few years. You should also figure out what rents are in the area for a place that size.

[waterboy]

Congrats on retiring from military after 24yrs of service and best wishes with the new job

1. Don’t rush into buying a home just because your looking for a tax write-off. It’s nice to be able to write it off but I don’t think it is a huge benefit.

2. I’ve made some offers on REO lately and the listing agents usually say don’t come in at more than 20% off, but do whatever you want as most of the time they are not looking at mult. offers and you can counter back and forth. BTW I haven’t got a bank to accept 20% or more off but properties are still listed and I’ll see if they lower asking prices over the next few months.

3. If you have no experience remodeling then you”ll soon find out some companies will quote $40-$50k for a new kitchen….an avg master bath quote can run $20k. All depends on materials and size.

I personally wouldn’t buy right now (even in a nice are of RB) unless you can get something 20-25% below current comps. We still have a big mess ahead and it isn’t worth the stress of losing $100k + of equity over the next few years. You should also figure out what rents are in the area for a place that size.

[waterboy]

Congrats on retiring from military after 24yrs of service and best wishes with the new job

1. Don’t rush into buying a home just because your looking for a tax write-off. It’s nice to be able to write it off but I don’t think it is a huge benefit.

2. I’ve made some offers on REO lately and the listing agents usually say don’t come in at more than 20% off, but do whatever you want as most of the time they are not looking at mult. offers and you can counter back and forth. BTW I haven’t got a bank to accept 20% or more off but properties are still listed and I’ll see if they lower asking prices over the next few months.

3. If you have no experience remodeling then you”ll soon find out some companies will quote $40-$50k for a new kitchen….an avg master bath quote can run $20k. All depends on materials and size.

I personally wouldn’t buy right now (even in a nice are of RB) unless you can get something 20-25% below current comps. We still have a big mess ahead and it isn’t worth the stress of losing $100k + of equity over the next few years. You should also figure out what rents are in the area for a place that size.

[waterboy]

Congrats on retiring from military after 24yrs of service and best wishes with the new job

1. Don’t rush into buying a home just because your looking for a tax write-off. It’s nice to be able to write it off but I don’t think it is a huge benefit.

2. I’ve made some offers on REO lately and the listing agents usually say don’t come in at more than 20% off, but do whatever you want as most of the time they are not looking at mult. offers and you can counter back and forth. BTW I haven’t got a bank to accept 20% or more off but properties are still listed and I’ll see if they lower asking prices over the next few months.

3. If you have no experience remodeling then you”ll soon find out some companies will quote $40-$50k for a new kitchen….an avg master bath quote can run $20k. All depends on materials and size.

I personally wouldn’t buy right now (even in a nice are of RB) unless you can get something 20-25% below current comps. We still have a big mess ahead and it isn’t worth the stress of losing $100k + of equity over the next few years. You should also figure out what rents are in the area for a place that size.

[Author]

Posts