In escrow

[carlsbadworker]

After 6+ months of waiting, bank finally approved.

This is my 2nd house in Temecula. In piggington fashion, here is some number:

Per sqft price it is 10% higher than what I paid 4 years ago.
Overall price 40% higher due to its a size upgrade.
But thanks to FED, the payment is only 15% higher. My salary increase in the last four years can’t handle 40% standard of living increase, but I can handle 15%. So, FED is a decisive force here.

Strategically, this allows me to reach my goal of being a landlord at 40 ahead of schedule (I will rent out the unit I bought in 2008 as I originally planned). I can tolerate slight negative cash flow at the beginning years, with rent inflation giving me positive cash flow in future years. My zillow rent estimates is $1.1k above my mortgage, $600 above PITI+ HOA, so hopefully there is some cushion because I am not handy.

Hopefully, everything works out, less stressed about buying this time around.

[scaredyclassic]

i have a good feeling about your deal.

[hmc]

Temecula is on the earthquake fault.

I bought one small home there but I have no interest buying more.

[spdrun]

Sheesh, everything’s a risk. I could be hit by a taxi crossing the street. Temecula has a fault, San Diego has bushfires, Phoenix has crazies with heavy artillery, NYC and Miami have hurricanes.

[UCGal]

Congrats!

[dumbrenter]

[quote=carlsbadworker]

Strategically, this allows me to reach my goal of being a landlord at 40 ahead of schedule. I can tolerate slight negative cash flow at the beginning years, with rent inflation giving me positive cash flow in future years. My zillow rent estimates is $1.2k above my mortgage, $700 above PITI+ HOA, so hopefully there is some cushion because I am not handy.

Hopefully, everything works out, less stressed about buying this time around.[/quote]

Congratulations. Are the rent estimates you mention i.e. $1.2k > mortgage on a per year basis?

[carlsbadworker]

[quote=dumbrenter]
Congratulations. Are the rent estimates you mention i.e. $1.2k > mortgage on a per year basis?[/quote]

Per month. But I mis-calculate for about $100. So it should be $1.1K and $600 respectively (hey, it’s Temecula! And I bought almost at rock bottom four years ago.) I refinanced in between so the clock restarted…but the monthly payment is much lower as well as the rate.

I will probably price $100-$200 lower than the zillow estimates and there is vacancy. Plus I am really not handy. And I haven’t factor in any additional costs. I am sure insurance will be higher as rental property. And I probably also need some good umbrella insurance coverage. So in the end, I don’t expect too much would be left…with chance of negative cash flow at the beginning. But rents will for sure keep rising in the long run. I hope it can help me to pay part of my daughters’ college in the future …and that’s why it is strategically important to me as long as I can hang on with all the headaches of being a landlord.

[carlsbadworker]

[quote=hmc]Temecula is on the earthquake fault.

I bought one small home there but I have no interest buying more.[/quote]

Yes, there is risk. But on the bright side, I moved to Temecula 6 years ago and I rented. What a difference that made. Because both properties are about 50% off from their ~2006 peak pricing, so there is always a bright side to look at.

[CA renter]

Congratulations, Carlsbadworker!

Just remember, you don’t have to be overly-handy to do regular maintenance. Oftentimes, it’s just basic stuff. Probably a good idea to find a couple of trustworthy handymen who live near the rental if you’re really worried about it.

Enjoy!

[scaredyclassic]

temecula and murrieta have different earthquake risks, I think.

[hmc]

It’s always risk/reward thing. I chose to diversify.

[scaredyclassic]

i think Nomos brand watches will be worth 30% more in 10 years. diversify.
some objects may hold value. but what?

[hmc]

[quote=squat250]i think Nomos brand watches will be worth 30% more in 10 years. diversify.
some objects may hold value. but what?[/quote]

I am not getting your point.

[earlyretirement]

Congratulations! Heading into the future, I think you will enjoy being a landlord and owning more properties.

[scaredyclassic]

Diversify into hard assets handmade watch movements gold and old comic books

[Author]

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