I forgot to mention the tax break she got on property taxes…..
Posted by alan on 10/31/09 at 11:36 AM
IR,
Looked at your report for the Riverside property. This is an old home, built in 1912. Maintenance on a home that old is a lot different from maintenance on a newer home. (old wiring issues, old windows, insulation or lack of insulation, roof, possible settling of the foundation, old earthquake damage, etc) Anybody looking to get a historic home should be appaised of this and you allowance for maintenace should be increased for “historic” properties.
Posted by freedomCM on 10/31/09 at 12:47 PM
Isn’t Redlands in San Bernadino county?
The rental comps are problematic, it seems to me. While this is a very nice house, it is a 2 bedroom, and so the $1500 comp seems most appropriate. And you exclude most families from the renter pool.
The other problem is the huge unemployment problem in the IE. Just how many renters (or buyers) are there for this property? Particularly if you can buy a nearly new 3000sf property in the area in the $200k-s?
Too many houses, not enough jobs
Posted by newbie2008 on 10/31/09 at 12:56 PM
What would be the rent/lease on the riverside house? What is the maintenance on a historical house? If it on the historical register, the cost will be more than your normal old house of the same vintage. Even with a new house of 1600 sf, the cash flow investor (non-owner occupied) would be hard pressed to pay $400,000 unless it’s in a very desirable neighborhood.
As for 12 Stonewood with the teaser rate of 1.87% on with zero down, it will serve the bank right to take the loss. But as we all know, the taxpayer will be left holding the bag.
~$18,000 per year with taxes for about a year or two, then maybe free rent for half a year to two years. Why rent? Only in America.
The risks are why opportunities exist to purchase homes with large positive cashflow. This is an instance where I argue for the long term. If you are buying a cashflow property in a market likely to see full employment in 3 to 5 years, then temporarily reduced rents are the discount. When employment picks up and wages increase, rents will go up, and your investment will have increased value via its increased cashflow.
I am more bullish on Redlands than I am on Beaumont.
Posted by norcal on 10/31/09 at 04:35 PM
And don’t forget, she got a tax break on the mortgage interest that she DID pay for those 2 years. Really, aside from closing costs and refinancing fees, she has had no housing expenditure at all since 2006.
Will SOMEBODY go over to that house right this minute and clean all the trash off the kitchen counters and get the cheap cloth off the coffee table and take down those god-awful window hangings?
This house would pick up another $20K in resale value just by being staged properly. I’d clear out the whole living room, paint it a pale beige, and get some attractive rental furniture in there.
And if the owners had to get new granite counters, could they also have gotten new cabinet fronts?
Yes, I think there are nice granite counters under the clutter…
Posted by Sue in Irvine on 11/01/09 at 03:59 PM
Those cabinets look like they laquered them, all shiny looking. Ick.
I think the granite is fitted over the old countertops.
You’re right Laura. Too much stuff everywhere.
Posted by BeachRenter on 11/02/09 at 08:32 AM
Time Warp is right! (great video by the way). If I hadn’t been told that house was last purchased in 2006 I would have thought is was 1979. I have never seen that many regular televisions (one actually using Rabbit Ears!) in a house for at least 8 years. We know she didn’t waste her money on new Plasma’s so maybe that is to be commended. I mean, seriously, did she really decorate this house like that only 3 years ago? The kitchen banquet should be a big selling point as well. Anyway, you can tell this is just a BS listing trying to either get a loan mod or just further stall the foreclosure process for more FREE RENT. When the owner or agent puts up photos and a ridiculous price like that, they have no intention of selling.
Posted by norcal on 10/31/09 at 04:36 PM
I forgot to mention the tax break she got on property taxes…..
Posted by alan on 10/31/09 at 11:36 AM
IR,
Looked at your report for the Riverside property. This is an old home, built in 1912. Maintenance on a home that old is a lot different from maintenance on a newer home. (old wiring issues, old windows, insulation or lack of insulation, roof, possible settling of the foundation, old earthquake damage, etc) Anybody looking to get a historic home should be appaised of this and you allowance for maintenace should be increased for “historic” properties.
Posted by freedomCM on 10/31/09 at 12:47 PM
Isn’t Redlands in San Bernadino county?
The rental comps are problematic, it seems to me. While this is a very nice house, it is a 2 bedroom, and so the $1500 comp seems most appropriate. And you exclude most families from the renter pool.
The other problem is the huge unemployment problem in the IE. Just how many renters (or buyers) are there for this property? Particularly if you can buy a nearly new 3000sf property in the area in the $200k-s?
Too many houses, not enough jobs
Posted by newbie2008 on 10/31/09 at 12:56 PM
What would be the rent/lease on the riverside house? What is the maintenance on a historical house? If it on the historical register, the cost will be more than your normal old house of the same vintage. Even with a new house of 1600 sf, the cash flow investor (non-owner occupied) would be hard pressed to pay $400,000 unless it’s in a very desirable neighborhood.
As for 12 Stonewood with the teaser rate of 1.87% on with zero down, it will serve the bank right to take the loss. But as we all know, the taxpayer will be left holding the bag.
~$18,000 per year with taxes for about a year or two, then maybe free rent for half a year to two years. Why rent? Only in America.
Posted by IrvineRenter on 10/31/09 at 03:20 PM
The risks are why opportunities exist to purchase homes with large positive cashflow. This is an instance where I argue for the long term. If you are buying a cashflow property in a market likely to see full employment in 3 to 5 years, then temporarily reduced rents are the discount. When employment picks up and wages increase, rents will go up, and your investment will have increased value via its increased cashflow.
I am more bullish on Redlands than I am on Beaumont.
Posted by norcal on 10/31/09 at 04:35 PM
And don’t forget, she got a tax break on the mortgage interest that she DID pay for those 2 years. Really, aside from closing costs and refinancing fees, she has had no housing expenditure at all since 2006.
Posted by Laura Louzader on 10/31/09 at 05:00 PM
Will SOMEBODY go over to that house right this minute and clean all the trash off the kitchen counters and get the cheap cloth off the coffee table and take down those god-awful window hangings?
This house would pick up another $20K in resale value just by being staged properly. I’d clear out the whole living room, paint it a pale beige, and get some attractive rental furniture in there.
And if the owners had to get new granite counters, could they also have gotten new cabinet fronts?
Posted by IrvineRenter on 11/01/09 at 06:49 AM
Yes, I think there are nice granite counters under the clutter…
Posted by Sue in Irvine on 11/01/09 at 03:59 PM
Those cabinets look like they laquered them, all shiny looking. Ick.
I think the granite is fitted over the old countertops.
You’re right Laura. Too much stuff everywhere.
Posted by BeachRenter on 11/02/09 at 08:32 AM
Time Warp is right! (great video by the way). If I hadn’t been told that house was last purchased in 2006 I would have thought is was 1979. I have never seen that many regular televisions (one actually using Rabbit Ears!) in a house for at least 8 years. We know she didn’t waste her money on new Plasma’s so maybe that is to be commended. I mean, seriously, did she really decorate this house like that only 3 years ago? The kitchen banquet should be a big selling point as well. Anyway, you can tell this is just a BS listing trying to either get a loan mod or just further stall the foreclosure process for more FREE RENT. When the owner or agent puts up photos and a ridiculous price like that, they have no intention of selling.