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(former)FormerSanDiegan
ParticipantRegarding commutes.
At 10 am Wednesday October 10, here are the Google Maps “in traffic estimates for various places to downtown LA:
Valencia : 51 Minutes by car
48 minutes, plus connections (drive/walk to/from station) by transitCulver City : 21 minutes by car, 29 minutes plus connection (drive/walk to/from station) by light rail
Pasadena : 15 minutes by car
Participantother FS D –
What part of SD did you live in previously ?
We lived in San Diego for a decade+ before moving to LA. We lived in Central / Central Coastal San Diego (Clairement, then Bay Park) and didn’t want to live too far inland for climate purposes. This pointed us to areas like Santa Monica, Manhattan Beach, etc (which were a bit too expensive). But we found some nice pockets on LA’s west side that are really nice places to live. You shouldn’t omit these areas in your search.
The places you are looking are nice, but to me the heat and air quality in places like Pasadena overcame the positives you’ve already mentioned.
ParticipantHello other FS D
Take a look at Culver City.
commute to downtown by railSchools are good.
Great. Little downtown vibeBest kept secret in LA.
Participantflu –
Good News… keep fighting the good fight.
I agree 100% with temeculaguy, but would never be able to put it in words the way he does (I guess that’s true on most subjects).
September 19, 2012 at 10:02 AM in reply to: QE3 Away!: (EDIT: Now on the special unlimited nights and weekend spending plan)… #751564ParticipantWe mostly buy in the supermarket, but hit Costco for certain items that make sense in bulk … usually in matching pairs.
For example:
Wine & Cheese
Eggs & Bacon
Fiber Bars & toilet paper
September 4, 2012 at 1:11 PM in reply to: Historic low mortgage rates-how can homes increase in future? #751115Participant[quote=birmingplumb]
There is a saying in real estate ‘as rates go down, prices go up and vice versa as rates go up prices drop” all due to monthly payments which is what all or most all look at not total price. [/quote]Just because there’s a saying doesn’t make it true. That saying is a fallacy and as mentioned abve have been discussed ad nauseum on this board. But, some people are new, so it comes up periodically.
So… here are the Cliff’s notes…
Consider home prices and interest rates from the mid 1960’s to 1980.
30-year mortgage rates circa 1966 were about 5.5%
By 1981 they were 16 – 17%. So interest rates tripled in 15 years.What did home prices do from 1966 to 1981 ?
New homes in the US went from about 22K median in 1966 to about 75 K in 1981.Similar pattern for resale homes.
So, the saying is not true.
August 1, 2012 at 9:03 AM in reply to: Future housing purchase – trading up when rates are higher? #749337ParticipantYour current purchase likely pencils out right now as a rental. If, when you are looking at moving up, rates are signficantly higher, it is likely that inflation and rents will be significantly higher. Keeping your primary as a rental may be the best option at that point.
One of the best things we did was to keep our first house when we moved up.ParticipantSpammers sometimes dredge up stuff. It would be nice to get an update from lajolla-pig. If he still has the same loan he’s probably paying about 3.5% these days.
Participant“working with the first tenants to pick something they’d like”
– Sounds like a recipe for disaster. You should be purchasing property that meets your financial needs. That may not align wiht the tentants’ needs.
Also, if you are doing this, it means that you have an existing relationship with the first tentants. So, they are either related to you or friends with you. I don;t recommend that your first venture into landlording be encumbered by that.
– You should expect to put 25% down.
– Easiest qualifying is if you don;t need the rental income to meet qualification thresholds. You may run into a chicken and egg problem with rental income being needed, buit not documentable prior to closing.Participant[quote=no_such_reality]Yes, the sweet spot is 1%
What 1% you might ask, 1% as monthly rent. i.e. Your target is to get to 1% of the homes purchase price as monthly rent. Until then you will lose money.
As for losing money, well, you don’t really want to lose money. You want a paper loss but real money income. In other words, you want depreciation to push you to zero or near zero. If your real tangible expenses put you negative, you don’t even have a tax advantage unless you’re a real estate professional.
If you can keep the actual rent, including vacancies & losses covering expenses: mortgage interest (not principal), insurance, maintenance, taxes, advertising, legal, etc. Then you’re getting the home for your time.
If not, it’s ironically one of things of value in the rich dad series: how many of those deals can you do where you’re lossing money?[/quote]
If you can get 1% in our current interest rate environment that is phenomenal. However, that 1% rule of thumb made more sense when bond rates are in the 4 + % range. In a world where long-term bonds pay 1.5%, 12% gross rates might be a signal that that particularly property carries more risk.
I do agree with the point about getting positive / neutral actaul cash flow, but neutral (or maybe slightly negative) phantom tax loss (whether taken or carried), is a good position.
ParticipantGreat thread!
of course if things are good now (e.g. jobs) and that goes south in the future it is negative for housing in the area. That is always the case (duh).
Doesn’t impact if or why MM is currently hot ( or not)ParticipantMatt-
It depends on your goals, time horizon and individual circumstances.For example, if you are 20+ years from retirement thats one thing. If you are interested in income that’s another. If you are above income levels where you can deduct losses against regular income that’s another factor. If you are buying a property to lock in for potential future downsizing that’s another factor.
What are you trying to accomplish (maximum gain overall 20 years, reducing taxes, maximizing cash flow, minimizing risk) ?Personally, if you are in the accumulation stage (early -mid career) I think its optimal to aim to achieve zero after -tax cash cash flow. This allows you to put the minimum down, minimize impact to your lifestyle and maximize long term return.
Put enough down to allow your tenant to buy your property.ParticipantAssuming you have a sufficient cash reserve (good suggestion by XBoxBoy), I’d pay down and refinance.
You’d be getting $600 per month for an investment of $63,000 + closing costs.
Not gonna get that anywhere else.
May 4, 2012 at 1:45 PM in reply to: If you had a choice between Ron Paul and Ron Paul, which Ron Paul would you choose? #742936Participantwhomever it is, you gotta admit it’s pretty finny. markrnax looks exactly like markmax in the font used as the username. Clever !
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