[thejq]

I think most replies had assumed you’d need to rent when waiting/looking for your new forever home. But if you can move in with mom and your wife is ok with it, why not? Spring is the best time to sell. Sounds like if you don’t you will not have the cash for down payment, and most sellers don’t take contingent offers (too much risk), so your only option is to sell first anyway. With the cash from the sale, and while living with mom, you can start looking. The best time to buy is late summer to end of year. Since you’re not under time pressure, you can afford to look around, low ball and negotiate. Buy the worst house in the best neighborhood if you know how to fix it up to get the best price. Personally I don’t expect the market to change too much before 2020 election. It’s pretty high now, but with good economy and low rate, people can still afford it.

[thejq]

Good we’re looking at the same chart. So 2017 is lower than 2016 and 2018 is also forecast to trend down.

I like some of Ron’s libertarian ideas, but I won’t take financial advice from him as his track record has been pretty bad. I wouldn’t worry so much about federal deficit because it’s mostly financed by the fed and public debt, but trade deficit is a bigger problem, because it’s financed by foreign government.

[thejq]

More debts by itself is not necessarily a bad thing, as long as its percentage to GDP is stable or decreasing as it’s the case right now. While the US economy is still red hot and near full employment, the rest of the developed world is questionable at best. The strongest economy in EU, Germany only grew 1.8% in 2018, and Italy is -2%. As a result the ECB held its rate in Jan. As a common sense, when the going is good, it’s probably a good time to reduce some of that debt so when the bad time comes, there’s a room to maneuver. But the Fed must have seen something that we don’t see in the last FOMC by leaving the rate unchanged and signaled no increase for the rest of 2019 which is a little surprising.

[thejq]

[quote=AN]
What make you think price would drop 25%? I think that would put ITI well below rent.
[/quote]

Oh no, I’m not saying it would. It’s just a math exercise to prove that it’s better to sell and buy when the market is lower than trying to maximize your equity to sell and buy at the top of the market.

I hope it drops 25%, but I don’t it happen in the near future.

[thejq]

[quote=AN]In my previous example, a 3/2 house in MM is going for about $600k today. Rent for such house would be about $2600-2800/month, depending on when you rent (summer vs winter). Assuming you have 20% down, mortgage of the house at 4% interest rate would be $2291/month (P&I). PITI would be $3386/month. But principal is you paying off your loan. So, we should compare ITI vs rent instead. Which would put you at $2695. Now, if you take in tax deduction, ITI – tax deduction = $2249/month. Which means, if you’re buying the house as a primary residence, it’s still cheaper to buy today than rent the same house.

In order for ITI – tax deduction to be about $2700/month, price would have to push to $800k at 4% rate or rate would have to be @ 6% with $600k price.[/quote]

While I agree with your reasoning for owning a house, the logic behind your math is flawed. Right now you can deduct $24K as standard deduction, so only if your SALT + mortgage is more than that, you can use itemized deduction. Even if so, the benefit of that is the additional amount over $24K, when comparing to renting, not 100% as in your math.

If timing is hard, and you think the market maybe in a slow down trend, personally I think it’s better to wait for the market to drop before selling and buying. For example, if your equity today is $200K and house is $400K and you are looking to buy a $600K house, your loan will be $400K. If the whole market goes down 25% (hypothetically), your equity is halved at $100K, but the house you want to buy is now $450K, so your loan will be $350K. And you also pay less in tax/insurance and have accumulated some more $$$ while waiting.

[thejq]

Definitely sounds like scam to me. Do what the PROs and your conscience tell you to do, RUN. If applicant tells you that you can’t check his credit, he has something to hide. Bad renter is 100x worse than no renters.

[thejq]

I don’t think it’s any different from “buying from one and renting to another”. However if the seller wants to include the lease as part of the conditions, because of bad credit or debt, you need to be very careful. You could end up with a deadbeat and have to evict later. You should still qualify him/her no different from any other applicant (credit report, income etc.). The amount of price concession should be based on the risk you have to take in case the qualification was bad.

[thejq]

I suggest that you go to http://www.solarpaneltalk.com/forum.php It’s a great place to learn and ask questions. There’re many experts who will guide you to get the best system for your needs.

[thejq]

Since it’s the PM you’re dealing with, I’m assuming you’ve signed the standard lease form by CAR. It states that “in the event of termination by Tenant prior to completion of the original term of the Agreement, Tenant shall also be responsible for lost Rent, rental commissions, advertising expenses and painting costs necessary to ready Premises for re-rental. Landlord may withhold any such amounts from Tenant’s security deposit.” So legally neither the PM nor the owner can go after you unless you damaged the rental that costs more than the deposit to fix. Also since you’ve advertised and found the new tenant, the PM should not charge you the 30% either. I think it’s just an excuse to get some money from you. If you’ve shown good faith and got everything in writing, there’s no need to worry.

[thejq]

My insurance agent is Amy Hu at Stanley Wong Insurance Agency, 4619 Convoy Street, Suite C, San Diego, CA 92111, 858-569-0383, Fax 858-569-0445

I used her service for all my condos.

[thejq]

I’d be careful with references. I once had someone with great references (called his boss, HR, current landlord, previous boss etc.), but his credit check failed horribly (in the 400s). So I drove by his address and called the phone number on the outside of the appt building. It turned out that he didn’t give me the real landlord’s phone number, and he owed the landlord quite a bit of rent. The moral of the story is that applicant can lie about lots of things including references, but he can’t lied about credit stores and background checks.

[thejq]

Go for the pool, especially when you have kids. They will love and enjoy it. In SoCal, I think it’s given that kids need to know how to swim. There’s just so many water activities around. The younger they start the better. With that said, I completely agree with comments above that you need to get a safety device, fence or a pool cover. I have both but like the latter better, because once closed, you can’t get in period. It also keeps the water and chemical from evaporating and the dirt out – hence less pump runs. Maintenance is not that bad if you do it yourself and buy a pool cleaning robot (sweeper). I vacuum and add chems once/2 mos in the winter and once/2 wks in the summer. Remember that saying … having a pool in your own backyard – priceless.

[thejq]

I use http://www.youcheckcredit.com/ to check for credit. You need to register as a landlord first. They have many packages for background check. There’re standard rental application and lease agreement forms from the internet. I use the ones provided by California Assoc. of Realtors (CAR). Depending on where the applicants from, there’re free court searches for both civil and criminal records. In SD county, http://courtindex.sdcourt.ca.gov/CISPublic/enter?_pageid=55,1056871&_dad=portal&_schema=PORTAL . I check this first, before wasting money on credit reports. There’s also a useful website for these type of questions. http://www.biggerpockets.com/forums/52-rental-property-questions-landlording-issues

Good luck.

[thejq]

Congrats! Hopefully you don’t have to commute to Carlsbad every day. Interestingly, one of my offers in Temecula also got approved (after 5+ months) and escrow opened last Friday. Coincidence? 🙂 I was there doing inspection in the weekend and had a chance to visit the city for the first time and really liked it. Good luck with moving and land-lording! It may sound intimidating, but with hand-on management and good timing (sounds like you got the latter already), I see owning rentals to be the safest way to retirement. Imagine in 15-20 year, you’ll own them free and clear.

[thejq]

If it’s not permitted, can you get a loan? What about insurance? What do you tell the insurance co about the sq footage of the place? What if, god forbidden, something happens, say a fire or flood, could you be denied coverage because of the addition? My understanding is that, it’s only officially code complaint after a city inspector’s approval.

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