Shall we buy or never in San Diego or wait for more depreciation?

[patb]

[quote=AN][quote=Arraya]If this was a movie it would be titled “desperately seeking inflation” I don’t think inflation can easily be metered out when fighting the strongest deflationary pressures in history. If your paying attention they are trying like hell to inflate.[/quote]
I tend to side with the rule maker in the long run. If they want inflation, they can create inflation. They seem to be trying to create inflation at a manageable rate. But if they want, they can start printing quadrillion of $ and give out tax credit like there’s no tomorrow. That would be more than enough to create hyperinflation. In another word, they’re not trying very hard to create inflation. They could do much much much more to create inflation.[/quote]

If they want Inflation, Interest rates will also
rise in nominal terms.

So lets say we have 100% annual inflation, High but
not Psycho high. What happens, all those Option ARMS and IO loans in California that are still good?
DO they stay good?

Who wants to buy a house with a 140% mortgage?

And don’t think we won’t see rates rise, we are a creditor nation, the chinese don’t want to see their Trillion wiped out.

We are far more likely to end up in Stagflation then
Hyper INflation.

[an]

Patb, can you remind me what happened th housing price in the 70s when we had stagflation and high interest rate?

[an]

Patb, can you remind me what happened th housing price in the 70s when we had stagflation and high interest rate?

[an]

Patb, can you remind me what happened th housing price in the 70s when we had stagflation and high interest rate?

[an]

Patb, can you remind me what happened th housing price in the 70s when we had stagflation and high interest rate?

[an]

Patb, can you remind me what happened th housing price in the 70s when we had stagflation and high interest rate?

[briansd1]

When I see this thread, I think of the Elvis song Now or Never.

[briansd1]

When I see this thread, I think of the Elvis song Now or Never.

[briansd1]

When I see this thread, I think of the Elvis song Now or Never.

[briansd1]

When I see this thread, I think of the Elvis song Now or Never.

[briansd1]

When I see this thread, I think of the Elvis song Now or Never.

[BuyOrNot]

Thank you for your feedback. We got it that maintaining a rental property out of state is not easy and it will not be financially viable.

There was very legitimate question asked why we are thinking about buying at first place considering short time period of 5 years. The reasons (not in priority order)
(a)renting from last 10 years
(b)most of our friends have homes and it is putting some what pressure on us
(c)it is making sense financially somewhat as compared to 2006 lets look at the example numbers below

Prop bought for 500k with 100k Down
400k loan Closing cost = $4000
At 5% Interest only loan
Interest $1667
Prop tax $625 (at 1.5%)
Federal Tax rate of 28%
State Tax 9.55%
Effect Interest and Tax = ($1667 + $625) * 0.6245 = $1431
Add about $169 for insurance and hoa etc
Total monthly money out of our hand is $1600

Compare it with renting a property for $2000 we save $400 per month and over 5years (60 months) we are +$24000

Add 8000 federal tax credit and 10000 state tax credit then we are +$42000

Now assume we will able to sell the home for the same value of 500k after 5 years. Then after 5 years 6% commission + closing cost – $42000 = -30000 – 4000 + 42000
= +$8000

The positives assumptions if work out (most likely) then it can add to saving even more

(1) The one variable is that we may not able to get similar property for $2000 as rent if I look today the asking rent is about 2200$ plus for similar property.

(2) There is always an opportunity to get the property for less than 500k currently.

We are assuming to keep down payment conservatively invested so there is not much of a loss of opportunity for $100k down payment

These are the reasons we started thinking of buying property and planned to get feedback from “piggs”. Let us know if we are missing some thing in calculations above. What “piggs” recommend now?

[BuyOrNot]

Thank you for your feedback. We got it that maintaining a rental property out of state is not easy and it will not be financially viable.

There was very legitimate question asked why we are thinking about buying at first place considering short time period of 5 years. The reasons (not in priority order)
(a)renting from last 10 years
(b)most of our friends have homes and it is putting some what pressure on us
(c)it is making sense financially somewhat as compared to 2006 lets look at the example numbers below

Prop bought for 500k with 100k Down
400k loan Closing cost = $4000
At 5% Interest only loan
Interest $1667
Prop tax $625 (at 1.5%)
Federal Tax rate of 28%
State Tax 9.55%
Effect Interest and Tax = ($1667 + $625) * 0.6245 = $1431
Add about $169 for insurance and hoa etc
Total monthly money out of our hand is $1600

Compare it with renting a property for $2000 we save $400 per month and over 5years (60 months) we are +$24000

Add 8000 federal tax credit and 10000 state tax credit then we are +$42000

Now assume we will able to sell the home for the same value of 500k after 5 years. Then after 5 years 6% commission + closing cost – $42000 = -30000 – 4000 + 42000
= +$8000

The positives assumptions if work out (most likely) then it can add to saving even more

(1) The one variable is that we may not able to get similar property for $2000 as rent if I look today the asking rent is about 2200$ plus for similar property.

(2) There is always an opportunity to get the property for less than 500k currently.

We are assuming to keep down payment conservatively invested so there is not much of a loss of opportunity for $100k down payment

These are the reasons we started thinking of buying property and planned to get feedback from “piggs”. Let us know if we are missing some thing in calculations above. What “piggs” recommend now?

[BuyOrNot]

Thank you for your feedback. We got it that maintaining a rental property out of state is not easy and it will not be financially viable.

There was very legitimate question asked why we are thinking about buying at first place considering short time period of 5 years. The reasons (not in priority order)
(a)renting from last 10 years
(b)most of our friends have homes and it is putting some what pressure on us
(c)it is making sense financially somewhat as compared to 2006 lets look at the example numbers below

Prop bought for 500k with 100k Down
400k loan Closing cost = $4000
At 5% Interest only loan
Interest $1667
Prop tax $625 (at 1.5%)
Federal Tax rate of 28%
State Tax 9.55%
Effect Interest and Tax = ($1667 + $625) * 0.6245 = $1431
Add about $169 for insurance and hoa etc
Total monthly money out of our hand is $1600

Compare it with renting a property for $2000 we save $400 per month and over 5years (60 months) we are +$24000

Add 8000 federal tax credit and 10000 state tax credit then we are +$42000

Now assume we will able to sell the home for the same value of 500k after 5 years. Then after 5 years 6% commission + closing cost – $42000 = -30000 – 4000 + 42000
= +$8000

The positives assumptions if work out (most likely) then it can add to saving even more

(1) The one variable is that we may not able to get similar property for $2000 as rent if I look today the asking rent is about 2200$ plus for similar property.

(2) There is always an opportunity to get the property for less than 500k currently.

We are assuming to keep down payment conservatively invested so there is not much of a loss of opportunity for $100k down payment

These are the reasons we started thinking of buying property and planned to get feedback from “piggs”. Let us know if we are missing some thing in calculations above. What “piggs” recommend now?

[BuyOrNot]

Thank you for your feedback. We got it that maintaining a rental property out of state is not easy and it will not be financially viable.

There was very legitimate question asked why we are thinking about buying at first place considering short time period of 5 years. The reasons (not in priority order)
(a)renting from last 10 years
(b)most of our friends have homes and it is putting some what pressure on us
(c)it is making sense financially somewhat as compared to 2006 lets look at the example numbers below

Prop bought for 500k with 100k Down
400k loan Closing cost = $4000
At 5% Interest only loan
Interest $1667
Prop tax $625 (at 1.5%)
Federal Tax rate of 28%
State Tax 9.55%
Effect Interest and Tax = ($1667 + $625) * 0.6245 = $1431
Add about $169 for insurance and hoa etc
Total monthly money out of our hand is $1600

Compare it with renting a property for $2000 we save $400 per month and over 5years (60 months) we are +$24000

Add 8000 federal tax credit and 10000 state tax credit then we are +$42000

Now assume we will able to sell the home for the same value of 500k after 5 years. Then after 5 years 6% commission + closing cost – $42000 = -30000 – 4000 + 42000
= +$8000

The positives assumptions if work out (most likely) then it can add to saving even more

(1) The one variable is that we may not able to get similar property for $2000 as rent if I look today the asking rent is about 2200$ plus for similar property.

(2) There is always an opportunity to get the property for less than 500k currently.

We are assuming to keep down payment conservatively invested so there is not much of a loss of opportunity for $100k down payment

These are the reasons we started thinking of buying property and planned to get feedback from “piggs”. Let us know if we are missing some thing in calculations above. What “piggs” recommend now?

[Author]

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