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  • March 25, 2015 at 4:46 PM #21454
    KristopherSD
    Participant

    Hello again,

    I posted before about what I perceived to be overheated prices in San Diego County and received a lot of great input. To recap here are my details: 26 y/o, $110,000 savings, zero debt, excellent credit, secure $100,000+ job, fully funding 401k. At this point i’ve kind of set a benchmark in my head about buying a home in roughly two years but wanted to get some opinions on if it makes sense.

    My plan is to continue saving over the next two years and hopefully get to $190,000 in savings. At my current savings rate this shouldn’t be a problem. From there I would plan on purchasing a roughly $425,000-$450,000 home that needs alot of cosmetic work but would still be mortgage-able. With 20% and estimating closing costs at $15,000, that would leave me about $70,000 to remodel with a $15,000 cushion emergency fund.

    I’m pretty handy and have family members that are as well, so i’m hoping that $70,000 would get me a great remodel without moving walls. Hopefully this would help me avoid flipped homes and remodel to my liking as well as greatly boosting equity (although I plan to stay for life). My target areas at this point are La Mesa, Allied Gardens, San Marcos, Oceanside, and Vista.

    Does this all sound pretty reasonable? Currently the $425-450,000 range of homes I see on market are what I consider plain and poorly flipped homes and I hope with this plan I can set myself up in a well remodeled home that has a reasonable mortgage and be set for life. Ideally doing the remodel myself would get me into a nicer area and/or a view. If prices dropped 10-15% plus that would be even better obviously.

    Any thoughts? Should I just buy now and remodel as I go along, or possibly purchase a flipped home since I currently won’t have the needed remodel savings? My plan makes the most sense to me, but i’d love opinions.

    March 25, 2015 at 4:59 PM #784178
    spdrun
    Participant

    Save the money, buy a 2/2 condo for cash, maybe with a small loan. You’ll have $500-800/mo of expenses and be able to rent it for $1400/mo if you decide to leave Dodge for a few months. As close to responsibility-free ownership of property as you can get.

    March 25, 2015 at 7:08 PM #784186
    svelte
    Participant

    Given your current situation, you could get a loan to buy a home in those areas and that price range right now with 20% down and still have $$ left – I’m sure you know that.

    And you’ve done your homework pretty thoroughly – my sentence above isn’t telling you anything new.

    The basic question then is should you buy now or wait 2 years? I don’t think any of us can answer that – it really depends on what you’re comfortable with and what you think is going to happen in San Diego real estate in the next 24 months.

    None of us have a crystal ball. Ye make ye bets and ye takes ye chances.

    And in your shoes there is no way in hell I would buy a 2/2 condo. SFR all the way baby.

    March 25, 2015 at 7:10 PM #784187
    spdrun
    Participant

    Why not on the condo? If you’re young, better to have some other schmuck maintain the outside, pool, roof, etc than have to deal with it yourself. Paying a $250-300/mo HOA is actually a bargain unless your time is worthless.

    March 25, 2015 at 8:12 PM #784188
    Bitter Renter
    Participant

    Just wondering how a 26 y/o has $110,000 savings, zero debt, excellent credit, secure $100,000+ job, fully funding 401k? If this is true, I’d say save your money and let the market go stagnant or down a bit. In a few years you may find a significant other with similar economic situation, then you’d have the option of having a $1,000,000+ home in a location of San Diego like Carmel Valley, etc. Even if you want to do this all on your own, with your income and a few years savings you could set your sights on a location such as Scripps Ranch.

    March 25, 2015 at 9:51 PM #784189
    moneymaker
    Participant

    OP doesn’t say what s/he is paying for rent now. If paying a lot in rent then buy now or wait for the parents to kick the bucket and inherit theirs, the options are many and I would say follow your gut instincts rather than rely on “expert advice”.

    March 25, 2015 at 11:59 PM #784181
    FlyerInHi
    Guest

    [quote=spdrun]Save the money, buy a 2/2 condo for cash, maybe with a small loan. You’ll have $500-800/mo of expenses and be able to rent it for $1400/mo if you decide to leave Dodge for a few months. As close to responsibility-free ownership of property as you can get.[/quote]

    I agree with you. If he knows how to remodel well, the place can be quite nice, at least on the inside.

    But I don’t think that’s what the OP wants. He wants a house. I gave the same advice to a friend who retired. But he bought a big house with all the trappings. He told me recently that’s because when he dies he wants to have owned it even if it’s not paid off.

    Like you, I value financial freedom more. With your advice, once the OP pays off the first condo he can keep on investing on income producing stuff rather that feeding the house.

    March 26, 2015 at 9:33 PM #784219
    zk
    Participant

    [quote=spdrun] As close to responsibility-free ownership of property as you can get.[/quote]

    Maybe. But the op doesn’t sound, to me, like he’s looking for responsibility-free anything. He sounds like he’d gladly take a more responsibility-requiring approach, if that’s what it takes to get what he wants.

    Kristopher, I think your plan sounds quite reasonable. Something to consider: your plans may change. I bought my first house when I was 25. It wasn’t in an area I wanted to stay in forever, so I didn’t plan on staying. My second house (I was 28) was in an area I really liked, and I thought I’d stay in that house forever. I bought/moved to other primary residences at 30, 35, 41, and 49. Each I thought was my last. You just never know.

    March 27, 2015 at 2:09 PM #784236
    poorgradstudent
    Participant

    I didn’t see you mention a wife, OP. If you’re presently single and unattached, good for you, BUT…

    I wouldn’t buy a house now assuming that three years from now you’ll meet the girl of your dreams and she’ll gladly move into the home you built for yourself, to your needs. She’s going to have her own ideas and desires.

    If you’re a sworn bachelor for life by all means execute your plan.

    I would definitely approach this more as an investment than “I’m gonna buy a house and never move again”. Since you’re prepared to put in sweat equity your plan is far from crazy. Just understand you may end up selling down the road.

    March 28, 2015 at 6:38 AM #784256
    scaredyclassic
    Participant

    [quote=poorgradstudent]I didn’t see you mention a wife, OP. If you’re presently single and unattached, good for you, BUT…

    I wouldn’t buy a house now assuming that three years from now you’ll meet the girl of your dreams and she’ll gladly move into the home you built for yourself, to your needs. She’s going to have her own ideas and desires.

    If you’re a sworn bachelor for life by all means execute your plan.

    I would definitely approach this more as an investment than “I’m gonna buy a house and never move again”. Since you’re prepared to put in sweat equity your plan is far from crazy. Just understand you ma4y end up selling down the road.[/quote]

    those desires will lead inexorably toward more desires. More cravings. An endless inability to ever truly be conscious of the moment with ceaseless back of the envelope calculations on income future returns and plannning.

    man plans.
    G-d laughs.

    proverbs 19:21. See also Buddhism.

    however according to my calculations your scheme might just actually work

    March 28, 2015 at 8:19 AM #784257
    fun4vnay2
    Participant

    Per my experience, san diego is not the best place to call this as permanent base job keeping in mind the flight of jobs to cheaper cost places along with difficult to do business in CA.
    This is at-least what I see from anecdotal evidences.

    If san diego is like LA or SFO, I understand but..

    March 28, 2015 at 8:56 AM #784258
    spdrun
    Participant

    San Diego will always have tourism and the wealthier people who actually want to live in a beautiful place with good climate. If you own a restaurant, shop catering to tourists (bikes, surfboards, etc), or are a tradesman like an electrician or plumber, your job should be very secure. Don’t discount the blue-collar opportunities.

    March 28, 2015 at 10:47 AM #784269
    an
    Participant

    [quote=spdrun]San Diego will always have tourism and the wealthier people who actually want to live in a beautiful place with good climate. If you own a restaurant, shop catering to tourists (bikes, surfboards, etc), or are a tradesman like an electrician or plumber, your job should be very secure. Don’t discount the blue-collar opportunities.[/quote]Exactly!!!

    March 28, 2015 at 6:45 PM #784277
    zk
    Participant

    [quote=rockingtime]Per my experience, san diego is not the best place to call this as permanent base job keeping in mind the flight of jobs to cheaper cost places along with difficult to do business in CA.
    This is at-least what I see from anecdotal evidences.

    [/quote]

    A perfect example of why anecdotal evidence should not be used to make decisions (if more comprehensive data exist(s)).

    The parenthetical “s” is for you, Rich.

    March 28, 2015 at 7:35 PM #784278
    Anonymous
    Guest

    Hi, Kris:

    I have a duplex in Vist that is perfectly match what you need, check your message.

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