[23109VC]

in my original assumption, I”m assuming the person who pulls this off has a solid job, currently has strong FICO scores, and has not refi’d the existing house….

So…they have a large income, they can go full doc – and prove income.

so you wind up “lying” and claiming your existing home is rented out, you generate a rental contract with someone you know, or a straw, who signs up for the rental, at a high monthly rate – so that the bank thinks the existing home is rented – and then qualify for the new house.

i have a buddy who was buying home #2, and had house #1. he lived in #1 and did bogus docs showing house #1 was rented out. it was all fake. he then qualified for house #2, bought it, moved in. THEN he put #1 up for rent and just burned up savings until it really rented. he had to carry it a couple of months, but he pulled it off…but he did LIE on his app by claiming it was rented….he had a rental contract executed, by a real person buyt all involved knew it would be torn up the moment his loan closed on #2.

i don’t see why people won’t pull this in the upcoming crash.

heck, if my house is suddenly worth a fraction of what I paid for it…and I could buy the SAME type house, or hell, a BETTER one for LESS money, you think i’d sit in myhouse and essentially waste money… i think you will see peple lining up to dump their house and let the bank have it.

assuming they have the income/docs/etc to qualify for house #2.

or people will draw up fake escrow papers and claim their house is already sold and in escrow. what would stop me from having a purchase agreement with say…my SISTER…who signs up to BUY my house…it goes into escrow…I quality for house #2 b/c bank thinks house #1 is selling…and then approve you for new house…then after the fact #1 “falls out”…or would they demand it actually close before they funded #2?

if people did this in the 90s, they will do it again and there will be a way. maybe some people won’t have the $$ or the ability to do it, but if there are some people who CAN do it, and it makes financial sense to do it, whether it is the “moral” or “right” thing will be out the window. money is money and people will sell their soul for it.

[23109VC]

in my original assumption, I”m assuming the person who pulls this off has a solid job, currently has strong FICO scores, and has not refi’d the existing house….

So…they have a large income, they can go full doc – and prove income.

so you wind up “lying” and claiming your existing home is rented out, you generate a rental contract with someone you know, or a straw, who signs up for the rental, at a high monthly rate – so that the bank thinks the existing home is rented – and then qualify for the new house.

i have a buddy who was buying home #2, and had house #1. he lived in #1 and did bogus docs showing house #1 was rented out. it was all fake. he then qualified for house #2, bought it, moved in. THEN he put #1 up for rent and just burned up savings until it really rented. he had to carry it a couple of months, but he pulled it off…but he did LIE on his app by claiming it was rented….he had a rental contract executed, by a real person buyt all involved knew it would be torn up the moment his loan closed on #2.

i don’t see why people won’t pull this in the upcoming crash.

heck, if my house is suddenly worth a fraction of what I paid for it…and I could buy the SAME type house, or hell, a BETTER one for LESS money, you think i’d sit in myhouse and essentially waste money… i think you will see peple lining up to dump their house and let the bank have it.

assuming they have the income/docs/etc to qualify for house #2.

or people will draw up fake escrow papers and claim their house is already sold and in escrow. what would stop me from having a purchase agreement with say…my SISTER…who signs up to BUY my house…it goes into escrow…I quality for house #2 b/c bank thinks house #1 is selling…and then approve you for new house…then after the fact #1 “falls out”…or would they demand it actually close before they funded #2?

if people did this in the 90s, they will do it again and there will be a way. maybe some people won’t have the $$ or the ability to do it, but if there are some people who CAN do it, and it makes financial sense to do it, whether it is the “moral” or “right” thing will be out the window. money is money and people will sell their soul for it.

[23109VC]

i did NOT buy for $100/sq ft. 🙂 I wish.

I still got a good deal. I paid a good $100k less than ANYONE on my street. The seller bought at peak pricing, and ate the loss. He was a $$$$ investor dumping a lot of property, and wanted out, fast.

the cheapest house I have seen in my immediate neighborhood that is for sale is still priced 50k more than I paid.

there are amazing deals out here, but like another person pointed out, Spencer’s Crossing and stuff in that area, is a bit more remote and less convenient. for people with kids, Harveston is an ideal setting. parks, lake, pool facility, easy access to freeway, mall, and of course COSTCO!. plus it’s 5 min from my office. going home for lunch is hard to beat.

i bet things will still slide down. i’m just not so sure how far.

ultimately, these houses are worth what they will rent out for. so while prices may come down, i don’t see prices falling so low that you could buy one for less than you could rent if for…. someone correct me if i’m wrong…but if you can figure out roughly what a hosue SHOULD rent for, can’t you ultimately determine the bottom line range of what it could sell for – assuming it went to investors who would rent it out?

assume a hous would rent for 1800-2000 – what’s it’s “value”…..wasn’t there a formula that houses are worth 200x the rent or something…

[23109VC]

i did NOT buy for $100/sq ft. 🙂 I wish.

I still got a good deal. I paid a good $100k less than ANYONE on my street. The seller bought at peak pricing, and ate the loss. He was a $$$$ investor dumping a lot of property, and wanted out, fast.

the cheapest house I have seen in my immediate neighborhood that is for sale is still priced 50k more than I paid.

there are amazing deals out here, but like another person pointed out, Spencer’s Crossing and stuff in that area, is a bit more remote and less convenient. for people with kids, Harveston is an ideal setting. parks, lake, pool facility, easy access to freeway, mall, and of course COSTCO!. plus it’s 5 min from my office. going home for lunch is hard to beat.

i bet things will still slide down. i’m just not so sure how far.

ultimately, these houses are worth what they will rent out for. so while prices may come down, i don’t see prices falling so low that you could buy one for less than you could rent if for…. someone correct me if i’m wrong…but if you can figure out roughly what a hosue SHOULD rent for, can’t you ultimately determine the bottom line range of what it could sell for – assuming it went to investors who would rent it out?

assume a hous would rent for 1800-2000 – what’s it’s “value”…..wasn’t there a formula that houses are worth 200x the rent or something…

[23109VC]

hipmatt-

i make a bit more than 100k…not gobs more..but close to or near 140k.

our decision was partially emotion. part financial.

so now that i have a house at 350k…. that i could list for $430k…. (one sold 30 days ago at 430k) you all probably now think i should flip it and put some cash in my pocket..

there is someone out there who would buy it at 375-400k…and I make money.

is that what I should do now? 😉

next thing you know i’ll be posting on here about my sales saga as i try to flip my house b/c you have all talked me into what a bad choice i made.. 😉 ha ha ha

[23109VC]

hipmatt-

i make a bit more than 100k…not gobs more..but close to or near 140k.

our decision was partially emotion. part financial.

so now that i have a house at 350k…. that i could list for $430k…. (one sold 30 days ago at 430k) you all probably now think i should flip it and put some cash in my pocket..

there is someone out there who would buy it at 375-400k…and I make money.

is that what I should do now? 😉

next thing you know i’ll be posting on here about my sales saga as i try to flip my house b/c you have all talked me into what a bad choice i made.. 😉 ha ha ha

[23109VC]

the rent on my place WAS 1400. the owner mispriced it in the first place. i had been looking at rentals for a good month before i found this place…it was under market price by a good 200-300/month. it should have been 1700-1800.

before my lease on this house was about to expire – and before i bought – i looked for another rental. the closest price i could find for anything REMOTELY as nice as my house was about $2100. very few one stories… most were in areas we did not like.

buying is going to run me roughly $3000/month. total nut.
renting would cost me about $1800-2000. yeah i can find 1600 rentals..but they are stipped down yucky houses..and after living in homes that have been nicely upgraded, in nice areas, I candidly don’t want to live in a dumpy 1600 rental. neither did i want a two story..so my options were lmited.

i calculated that i would be saving about $700-800/month off my taxes by buying.

so my 2000 rental is really 2800/month when you take out the tax whack.

my loans include principle reduction which I don’t calculate when doing rent vs buy. i compared the total costs to rent which is the rent. vs the interest payments, taxes, hoas, maintenance. this house will run me about $3000/month. about 400/month is principle reduction..give or take…so i’m paying 2600/month to carry the house.

to rent would actually cost more… at the worst i’m breaking even.

if i sit tight for 10 years – prices will be back

[23109VC]

the rent on my place WAS 1400. the owner mispriced it in the first place. i had been looking at rentals for a good month before i found this place…it was under market price by a good 200-300/month. it should have been 1700-1800.

before my lease on this house was about to expire – and before i bought – i looked for another rental. the closest price i could find for anything REMOTELY as nice as my house was about $2100. very few one stories… most were in areas we did not like.

buying is going to run me roughly $3000/month. total nut.
renting would cost me about $1800-2000. yeah i can find 1600 rentals..but they are stipped down yucky houses..and after living in homes that have been nicely upgraded, in nice areas, I candidly don’t want to live in a dumpy 1600 rental. neither did i want a two story..so my options were lmited.

i calculated that i would be saving about $700-800/month off my taxes by buying.

so my 2000 rental is really 2800/month when you take out the tax whack.

my loans include principle reduction which I don’t calculate when doing rent vs buy. i compared the total costs to rent which is the rent. vs the interest payments, taxes, hoas, maintenance. this house will run me about $3000/month. about 400/month is principle reduction..give or take…so i’m paying 2600/month to carry the house.

to rent would actually cost more… at the worst i’m breaking even.

if i sit tight for 10 years – prices will be back

[23109VC]

OH – that hurts…. 🙂

i haven’t seen newguy’s place – but it sure sounds like a great deal!!!!

location wise – I prefer the sausalito area better – which is where my home is. that’s just personal preference. I am walking distance to the lake – Prescott where newguy bought is not. Date street is a major surface street that will eventually connect to I-15. Prescott is part of “harveston” but it is separated from the “core” of harveston by date street. many of the original harveston homes are all within a central part of harveston and they are 1-3 minute walks from the lake, parks, clubhouse, and pool/spa facility – making them more convenient and useable. we are a 3 minute walk from all that stuff which we like. if i were in prescott i woul dhave to load everyone up in the car to get to any of that stuff. very short trip – but loading three kids into the car is more of a drag than just putting one or two kids in a stroller and walking 2 minutes…

the prescott homes struck me as more or less larger houses with backyards that butt up against one another – none of them seemed to offer any sort of privacy. most of them would have large two stories immediately beside and to the rear of them – with all their windows peering down at them. my home sold with a 10-15k lot premium due to it being on a greenbelt with no rear neighbors. i back up to pine trees, and bushe, with a 50-75′ deep sloped embankment behind me..with no street behind me – resulting in a fairly private/secluded backyard. that is fairly rare in harveston. I”m not saying that my house is worth a ton more b/c of it – but it was a factor my wife and I considered when buying. to US – that was important. our last house backed up on a street and we HATED the noise…this house has a nice quieet and private rear yard..the yards are small..but for sitting outside to enjoy a cigar, glass of wine, or let the kids play in the grass or their sandbox and enjoy the cool evenings – it’s ideal.

our personal opinion is taht despite our house being “small” in terms of square footage – our location within harveston is ideal (proximity to the luxuries of harveston) and private/secluded yard.

a neighbor who lives across the street said they could have bought my house when they orignally bought as both lots were still available – they passed on my house b/c they said the lot premium made it too expensive. it’s not any bigger – just a better location. were i to try and resell, i have no idea if my lot would honestly command more $$ b/c of location, but i know it would sell before a house on the other side of the street – location location location.

if you price my house out vs. new guys per sq ft – no question – he got a much better deal. although candidly, I couldn’t have afforded his house. I have a comfort level in what I wanted to spend and 350k was getting about to where I refused to go any higher. I *could* have stretched my budget and made it happen – but my wife and i have been “house poor” before – we dont want to do it again. we are very comfortable on the payment with 350k. bumping up to anythign close to 450 just adds enough $$ that other areas of our life, saving, spending will get impacted.

we also really wanted a one story. neither my wife or I have ANY desire to go up/down stairs. we insisted on a one story house – adn those are not that prevalent in harevston. prescott did have one floor plan that was a one story – but we preferred the location we were in to prescott.

the “extras” and location our house came with, combined with the price being relatively low compared to what we could have got anywhere else made it a relatively attractive choice. for our needs, and situation – i think it worked out for us. i’d rather pay 350k for a smaler house that is loaded up with a good $50k in options, vs. pay only $300k up front and be faced with $50k in costs over the next few years.

we took that into consideration too…we can afford the house..but to buy a house, THEN get hit with landscaping, window coverings, etc… is $$. i’d rather get a house that had it all done – nicely – and not have to come out of pocket for it.

in NO way am i trying to say that i got a better deal than newguy. if anything – on purely square footage – his deal is by far a better one than mine. for my personal needs, however, i like what i got. a nicely upraded one story in a nice area that costs me about as much to own as it would to rent.

newguy – congrats on your new home!!!

[23109VC]

OH – that hurts…. 🙂

i haven’t seen newguy’s place – but it sure sounds like a great deal!!!!

location wise – I prefer the sausalito area better – which is where my home is. that’s just personal preference. I am walking distance to the lake – Prescott where newguy bought is not. Date street is a major surface street that will eventually connect to I-15. Prescott is part of “harveston” but it is separated from the “core” of harveston by date street. many of the original harveston homes are all within a central part of harveston and they are 1-3 minute walks from the lake, parks, clubhouse, and pool/spa facility – making them more convenient and useable. we are a 3 minute walk from all that stuff which we like. if i were in prescott i woul dhave to load everyone up in the car to get to any of that stuff. very short trip – but loading three kids into the car is more of a drag than just putting one or two kids in a stroller and walking 2 minutes…

the prescott homes struck me as more or less larger houses with backyards that butt up against one another – none of them seemed to offer any sort of privacy. most of them would have large two stories immediately beside and to the rear of them – with all their windows peering down at them. my home sold with a 10-15k lot premium due to it being on a greenbelt with no rear neighbors. i back up to pine trees, and bushe, with a 50-75′ deep sloped embankment behind me..with no street behind me – resulting in a fairly private/secluded backyard. that is fairly rare in harveston. I”m not saying that my house is worth a ton more b/c of it – but it was a factor my wife and I considered when buying. to US – that was important. our last house backed up on a street and we HATED the noise…this house has a nice quieet and private rear yard..the yards are small..but for sitting outside to enjoy a cigar, glass of wine, or let the kids play in the grass or their sandbox and enjoy the cool evenings – it’s ideal.

our personal opinion is taht despite our house being “small” in terms of square footage – our location within harveston is ideal (proximity to the luxuries of harveston) and private/secluded yard.

a neighbor who lives across the street said they could have bought my house when they orignally bought as both lots were still available – they passed on my house b/c they said the lot premium made it too expensive. it’s not any bigger – just a better location. were i to try and resell, i have no idea if my lot would honestly command more $$ b/c of location, but i know it would sell before a house on the other side of the street – location location location.

if you price my house out vs. new guys per sq ft – no question – he got a much better deal. although candidly, I couldn’t have afforded his house. I have a comfort level in what I wanted to spend and 350k was getting about to where I refused to go any higher. I *could* have stretched my budget and made it happen – but my wife and i have been “house poor” before – we dont want to do it again. we are very comfortable on the payment with 350k. bumping up to anythign close to 450 just adds enough $$ that other areas of our life, saving, spending will get impacted.

we also really wanted a one story. neither my wife or I have ANY desire to go up/down stairs. we insisted on a one story house – adn those are not that prevalent in harevston. prescott did have one floor plan that was a one story – but we preferred the location we were in to prescott.

the “extras” and location our house came with, combined with the price being relatively low compared to what we could have got anywhere else made it a relatively attractive choice. for our needs, and situation – i think it worked out for us. i’d rather pay 350k for a smaler house that is loaded up with a good $50k in options, vs. pay only $300k up front and be faced with $50k in costs over the next few years.

we took that into consideration too…we can afford the house..but to buy a house, THEN get hit with landscaping, window coverings, etc… is $$. i’d rather get a house that had it all done – nicely – and not have to come out of pocket for it.

in NO way am i trying to say that i got a better deal than newguy. if anything – on purely square footage – his deal is by far a better one than mine. for my personal needs, however, i like what i got. a nicely upraded one story in a nice area that costs me about as much to own as it would to rent.

newguy – congrats on your new home!!!

[23109VC]

i saw this thread. no i’m not stressed. I looked at prescott but didn’t care for the location. but that’s just ME.

newguy – great deal. congrats! we will be neighbors. 🙂 you got a great price for a HUGE house.

as to those of you who have any interst in my situation – my wife and I bought our rental. $350k for 1866 sq ft. one story. 3BD/2BA.

no need to post the “you’ll be sorry” posts – I already know what many of you will say. 🙂 My wife and talked about the decision to buy or continue renting EXTENSIVELY. In the end – there were numerous factors at play – some personal, some financial. In the end – after weighing *everything* – we feel we made a well informed decision. There was more motivating us than purely price/sq ft and real estate market considerations.

We bought the house to live in – to raise our kids in – to be in a good area. We had specific wants – such as being in Harveston, in a *one story*, in a certain location, with a private yard – and this house met all those needs (which is hard to find in Harveston).

i ran all the numbers of renting vs buying. and candidly – i’m going to be paying about the same to buy this house compared to renting something similar. So we could have rented another year and maybe bought more house for the same amount of money (or less money) – but we like this house.

i sincerely appreciate all the advice i received here. Just because I went against what many of you recommended – please don’t think I didn’t appreciate your time and input. I did listen to you all. I wouldn’t have spent the amount of time here I did had I not cared about what you all thought. So while many of you will post here and bash me – thank you in advance to those of you who gave me your opinions and thoughts.

we are prepared for the very real and very likely scenario of the house being worth less than we paid for it. we are prepared for that – believe me – we talked about it.

we are in this house for the long haul. 10 years at least. We like the house, we are comfortable with our payments, we are paying about what we would pay to rent, and we don’t plan to move for a long time. IN the end, I think we will be ok, and more importantly, we are happy with our decision.

newguy – when do you move in?

[23109VC]

i saw this thread. no i’m not stressed. I looked at prescott but didn’t care for the location. but that’s just ME.

newguy – great deal. congrats! we will be neighbors. 🙂 you got a great price for a HUGE house.

as to those of you who have any interst in my situation – my wife and I bought our rental. $350k for 1866 sq ft. one story. 3BD/2BA.

no need to post the “you’ll be sorry” posts – I already know what many of you will say. 🙂 My wife and talked about the decision to buy or continue renting EXTENSIVELY. In the end – there were numerous factors at play – some personal, some financial. In the end – after weighing *everything* – we feel we made a well informed decision. There was more motivating us than purely price/sq ft and real estate market considerations.

We bought the house to live in – to raise our kids in – to be in a good area. We had specific wants – such as being in Harveston, in a *one story*, in a certain location, with a private yard – and this house met all those needs (which is hard to find in Harveston).

i ran all the numbers of renting vs buying. and candidly – i’m going to be paying about the same to buy this house compared to renting something similar. So we could have rented another year and maybe bought more house for the same amount of money (or less money) – but we like this house.

i sincerely appreciate all the advice i received here. Just because I went against what many of you recommended – please don’t think I didn’t appreciate your time and input. I did listen to you all. I wouldn’t have spent the amount of time here I did had I not cared about what you all thought. So while many of you will post here and bash me – thank you in advance to those of you who gave me your opinions and thoughts.

we are prepared for the very real and very likely scenario of the house being worth less than we paid for it. we are prepared for that – believe me – we talked about it.

we are in this house for the long haul. 10 years at least. We like the house, we are comfortable with our payments, we are paying about what we would pay to rent, and we don’t plan to move for a long time. IN the end, I think we will be ok, and more importantly, we are happy with our decision.

newguy – when do you move in?

[23109VC]

my point is that the prices are misleading. whether it was the BEFORE the price reduction or AFTER – the KB system is misleading. who knows what you really got for $650 or 700 “before”… was that a stripped house too? or loaded with options?

i have looked at several KB developments over teh past several years and I’ve found them all to be the same – beautiful models – reasonable prices advertised ont eh price sheets – and everything is optional. stuff that seems flat out silly to be an option is…. an option. oh you wanted an extra light fixture over the kitchen sink… OPTION. you want an electical outlet in the garage – OPTION.

i’m not kidding – some of their option packages are plain silly. i can see granite, etc…costing extra… although in the current market, most builders are thrwoing that in….

you buy a KB home… you option it up the way you want..spend a lot of money on your house – then the rest of the neighborhood moved in and b ought stripped houses… you paid a lot..care about your house..and most of your neighbors are losers who bought a POS stripped house and are in completely different economic circles than you are. no thanks.

[23109VC]

my point is that the prices are misleading. whether it was the BEFORE the price reduction or AFTER – the KB system is misleading. who knows what you really got for $650 or 700 “before”… was that a stripped house too? or loaded with options?

i have looked at several KB developments over teh past several years and I’ve found them all to be the same – beautiful models – reasonable prices advertised ont eh price sheets – and everything is optional. stuff that seems flat out silly to be an option is…. an option. oh you wanted an extra light fixture over the kitchen sink… OPTION. you want an electical outlet in the garage – OPTION.

i’m not kidding – some of their option packages are plain silly. i can see granite, etc…costing extra… although in the current market, most builders are thrwoing that in….

you buy a KB home… you option it up the way you want..spend a lot of money on your house – then the rest of the neighborhood moved in and b ought stripped houses… you paid a lot..care about your house..and most of your neighbors are losers who bought a POS stripped house and are in completely different economic circles than you are. no thanks.

[23109VC]

JS-

that house you refer to…for $499k… haven’t seen the inside..but have seen it from outside… it has a $30k spa too. people who owned it bought another house in harveston and can’t unload that one. it was in escrow, fell out, now they are under pressure to sell it. motivated sellers..

only drawback I see to the lake is all the activity it gets. yeah you geta nice view..but the floorplans of those “cottages” are crappy if you ask me. they are very long/narrow and almost have a tubular feel. i have been inside them and to me they feel small. square footage is ok, but they FEEL small due to the layout.

lakefront view is nice. but the lake gets a LOT of activity. it’s a great place to walk arond, take the kids to…. play at the park, etc.. but if your front yard looked at that lake…you also get teenagers making out on the lawn, kids running and screaming all day long…. people driving up/downt he frontage street and taking up parking all the time..

there is a decent problem with kids screwing around… smoking weed, having sex.. we’re not talking major crime or anyting…just kids doing what some kids do.. but if it were on your front lawn 24/7 you’d be sick of it.. i know people who live on the lake and it’s somewhat of a nuisance.

i’d rather be OFF the lake, NOT pay lakefront prices, and walk over to enjoy it. i’ts not like it’s beachfront prpoerty or anything…

[Author]

Posts