Buying a House

[Bob Sakamano]

I am tired of renting as rent is extremely high here. I've been told many times I'd be better off buying a house as my mothly payments could be $200 cheaper. I have a year and half left on current contract and may or may not resign(I'm about 70/30 in favor of re-signing). I know NOTHING when it comes to buying a house. There is so much moving around in this biz, is it even worth it? I don't want to have cheaper payments for a year, only to have a house that won't sell when I go to move (whether that be late next year, or three years from now). Any thoughts from people who have been down this road before?

Thanks,
Bob

[ April 20, 2006, 07:25 AM: Message edited by: Bob Sakamano ]

[imported_Seraph]

Let me point you in the direction of a thread that I started about a week ago. Everyone was really helpful, and it should answer most of your questions.

My House Buying Thread from Last Week (http://www.medialine.com/ubb/NonCGI/ultimatebb.php?ubb=get_topic;f=1;t=047522#000000)

Also, I just happened to be flipping through the channels last saturday night and Suzy Orman or whatever her name is was doing a show on first time homebuyers. Here are a few important points I came away with:

1. Whatever you're paying in rent, add 45% to that to figure in maintenance costs. Or, do as I did, and multiply your current rent by .66 to figure what you can afford/month in a mortgage payment. Not sure if that really works though.

2. According to the show, property taxes are 1.5% to 2% per year. Just giving you a ballpark figure to go on.

3. Figure that insurance will be $25 per month for every $100,000 of the value of your house.

Again, I saw this stuff on the Suzi Ormand show, and have no way of verifying the truth behind any of them. But definitely check out the previous thread.

[Marty McFly]

Buy a house you can afford! Some homeowners are 'house poor.' Don't be one of them!

1. Start saving NOW.
2. Put at least 20% down on the house. This way you will avoid paying PMI, which is mortgage insurance. Yuck.
3. 15 year FIXED mortgage. Look at the difference in a 15 and 30 year loan and you will crap yourself. If you can afford a TEN year loan, DO IT!
4. Monthly payment should not exceed a week's pay.

Do this and you will be reaping NUMEROUS benefits by 2022.

Do it not and you may regret buying a house.

[ April 20, 2006, 08:29 AM: Message edited by: Marty McFly ]

[newschick26]

Yes, you may save a couple hundred initially... but you must factor in the cost of utilities, insurance, taxes, etc. etc. Furnaces break. Roofs leak. You have to make sure you have enough money set aside for those emergencies.
However, there is a certain pride in owning your own home. I am able to express my artsy side in decor and landscaping. So that's a plus. And just having your own privacy without the sound of footsteps overhead or the sounds of people screwing each other in the apartment next to you.

[Bill-1]

When we decided to buy we bought a fixer-upper. Put a bunch of money into it in the first month before moving in. It's been 11 years we've lived here now and we haven't had a mortgage for 2 years. Our house is worth more that 2 times what we paid for it. If you're even a little handy think about doing the same.

[foxravens]

A 15 year mortgage and the monthly note should not exceed a week's pay?
Do you live in a fantasy world?

[Spike]

I currently rent. I hate paying rent to someone else, but it actually makes more sense for me to rent than to buy a house.

The other day one of my coworkers took this very superior attitude toward me and said something along the lines of "You're just throwing your money away." So I challenged him to compare numbers. He has a 30 year mortgage. A big chunk of his monthly payment is interest. His house is in an area that is rapidly increasing in value, which means his property taxes went up sharply this year after a revaluation. His insurance is pretty steep, too.

After we hashed it all out, we discovered that I give a LOT less to my landlord each year than he pays out in interest, taxes and insurance. I assumed an "I told you so" attitude and pointed out that even if I were throwing away money, he was throwing away MORE money.

His defense was that, when he retires in 30 years and sells his house, he expects to make a gain of $1 million, whereas he thinks I'll have nothing. His plan is to sell the house then, move into something smaller and retire on the gain. I countered that I'm actually taking the money I don't spend on rent, which would go toward equity if I were to buy, and putting it into various interest bearing instruments. Just for giggles I took the difference between what he and I pay each year (I actually put more than that into savings), divided it into monthly payments and plugged it into a future value calculator for an annuity. When he has his house paid off and thinks he'll clear $1 million, the calculator says I'll have $1.2 million cash in the bank without having to sell anything to liquidate it. That's $200K ahead of him, without us really even talking about major improvements or repairs he might have to make between now and the 2030s.

Meanwhile, I'll have cash (or highly liquid cash equivalents) all along that doesn't cost me anything, so that if disaster strikes (or extraordinary opportunity presents itself) I'll be prepared. If everything goes to hell for him, he could end up in trouble, with a lack of cash on hand. He might have to sell out at a significantly reduced gain. He might not be able to sell at all. In the worst case, he might just lose his house altogether.

Meanwhile, he's rooted to the spot, while I remain highly mobile. If the economy in our area goes to sh*t, I can get up and move on short notice to follow the work or go someplace where the cost of living is better. He'll have to either wait to sell his house under duress, or he'll be restricted to what he can scrounge up here.

Thus we established that (in my area, at least) it makes no sense at all for someone like me to buy property. For some strange reason he got really mad at me, even though he started the whole thing by chiding me for "throwing my money away." He ended the conversation by almost screaming that he wanted something significant to pass on to his children when they grow up, while, he says, I'll die old and lonely with all my money. He didn't seem to consider that I could pass that big chunk of change along to my kids as well.

The point of this story isn't that you should keep renting or shouldn't buy a house. The point is that I keep seeing people like my colleague who are so enamored with the idea of owning property that they don't actually sit down and figure out the numbers. Then, to justify what amounts to a bad decision, they "forget" all those costs associated with owning property and pretend that they're building some kind of great wealth.

The point is that it may work for you, in your area, at your salary; but you really need to sit down and figure it all out for yourself. And take anything a loan officer or real estate agent tells you with a pound of salt.

[luckybastard]

spike, the interest is tax deductible. but if you are married set a side plenty of cash for decorating and landscaping. it doesn't matter how nice it looks, because women will always want to change it :D

[Bureau Chief]

I have been a homeowner for 16 years. In that time my 4 kids have grown up and left home and my house is worth more than twice what I paid for it. I do worry about the housing bubble bursting before I can unload the house and prepare for retirement. If you have to call someone for every little repair, you will get killed in the long run. If you are handy with a hammer and like to putter around the house, then you save a bundle.
DO NOT DO NOT DO NOT DO NOT go to a mortgage outfit like ditech or any of the preditory lenders...they are just itching for you to get in trouble and then seize the home at the very first opportunity. Go to a bank you trust. Even so, its likely they will sell the note to an outside firm at some point. Ask them about this before you sign.

[Marty McFly]

Originally posted by foxravens:
A 15 year mortgage and the monthly note should not exceed a week's pay?
Do you live in a fantasy world?Yes I do. In my fantasy world I am not consumed by debt or credit cards or monthly payments.

I save and spend wisely.

It's an excellent fantasy world.

GET ON BOARD! YOU CAN DO IT TOO! (http://www.daveramsey.com)

[triumph]

There's good advice here. How's the housing market where you live - lots of people coming and going? I don't think you can lose on the deal if you own it for 5 or more years. Less than 5 years and it's a bit of a gamble. If your housing market is hot, you probably can't lose in owning a place for 2-3 years...maybe even less if you get a good deal. Good luck,

triumph

[AlterEgo]

I would seriously consider whether or not you plan on resigning because buying a house and then turning around a year and a half later can be a big money loser unless you do a renovation. Remember when buying, you have to pay a few grand of closing costs and selling it requires you to pay a realtor fee unless you sell it yourself which could turn into a big pain in the bum. Personally, I bought a house that was a fixer upper and am very happy with it.

[Ferrycrossthemersey]

The big question is, where do you live? What's the market like? Is this a place people will always want to move to?

And here's some advice from a pretty good financial planner: do you WANT to live in a house? Do you want THE house you're interested in? Do you LOVE it? Don't just buy for an investment ('though that can be done, and successfully, too); buy because it's something important to you.

[Ralphie the buffalo]

It is probably not a good financial bet to buy a house if you are going to stay in it less than three years. My Dad, a Realtor, told me that and I have heard the same advice from other respected and published advisors.

Closing costs and agent fees are the main reason. Your market may be "hot" now, but could get cold in a hurry. I have seen it happen. And the nationwide market is poised to do it again. Too many people have maxed out on a risky loans and we could be in for a major round of foreclosures in the future if economic conditions are right.

Realtors will always tell you it is a good time to buy. That is their job. If I was uncertain about staying in the area for at least 3 years or more I would rent, because a desperate seller is a screwed seller.

I have seen too many tv people take a bath on their houses when they a forced to sell in a hurry.

[ April 20, 2006, 08:28 PM: Message edited by: Ralphie the buffalo ]

[PAwxman]

Do not buy a house with uncertainty just a year and a half away. With rising interest rates, you may have to bring a check to the closing if you have to sell.

Marty, great points (and yes I agree with Dave Ramsey). It's amazing what the banks will give people. It makes you house poor and life becomes extremely stressed. With just $75k a year, the banks will allow you to buy a house for about $270k. That puts payments at over $2k a month with taxes and insurance. That doesn't leave you with much.

[TVMattNYC]

Originally posted by Marty McFly:
</font><blockquote>quote:</font><hr />Originally posted by foxravens:
A 15 year mortgage and the monthly note should not exceed a week's pay?
Do you live in a fantasy world?Yes I do. In my fantasy world I am not consumed by debt or credit cards or monthly payments.

I save and spend wisely.

It's an excellent fantasy world.

GET ON BOARD! YOU CAN DO IT TOO! (http://www.daveramsey.com)</font>[/QUOTE]You've got to be kidding. Using your formula someone making $75K would only be able to afford a $100,000 mortgage.

Do the math: Earning $75K, after taxes you're bringing in about $865.00 a week. $843.00/month buys you a $100,000 15-year mortgage.

Unless you have a PILE of money to put down, WHERE in any market that pays $75K could you buy a home in the low $100K's?

And you haven't even paid for insurance, maintenance, and taxes yet!

[Pro]

Originally posted by Ralphie the buffalo:
I have seen too many tv people take a bath on their houses when they a forced to sell in a hurry.Like ME! The killer was the realtor's fee. Since I moved out of town, I HAD to use a realtor. That killed any chance I had to make a profit on a house I had owned for less than 2 years. It appreciated some, not not nearly enough to cover the realtor's commission and my fix-up costs.

[Marty McFly]

You've got to be kidding. Using your formula someone making $75K would only be able to afford a $100,000 mortgage.

Do the math: Earning $75K, after taxes you're bringing in about $865.00 a week. $843.00/month buys you a $100,000 15-year mortgage.

Unless you have a PILE of money to put down, WHERE in any market that pays $75K could you buy a home in the low $100K's?

And you haven't even paid for insurance, maintenance, and taxes yet! That's why you put at least 20% down... or did you miss that?

[Spike]

Originally posted by luckybastard:
spike, the interest is tax deductible. So? We included that in our comparison. If you pay $10K in interest this year, that's NOT $10K subtracted from your taxes. That's $10K subtracted from your adjusted gross income. That only amounts to a couple thousand off your taxes at most.

Okay, so you've subtracted $10K from your income. But if I'm married, so have I, because the standard deduction for a married couple is already $10K. So there's still no benefit. If you have a house, you don't get the standard deduction AND your interest deduction. It's one or the other; I take one, you take the other.

If you're buying a house to save money on your taxes, you're essentially spending $1.50 to save $1. That's another one of those myths the real estate agents and loan salesmen use to try to get you to buy property.

[RoyMcAvoy]

The money you save off the taxes doesn't really come into play as a benefit until you are landlording.

If you are in a market with all four seasons and the housing is not that expensive, WAIT until November or December to buy. Serious buyers and few and, while serious sellers are also lower in number, you might be able to offer 85%-90% of asking price and get a 'yes'.

I would suggest a combination of paying down bad debt and saving some money as you lead into it.

If you don't think you'll be there in 24 months, do not buy. The housing boom of 2001 is over.

The benefit of owning a home during a boom is hard to ignore. We bought our first house in 2001 and sold it last year for 38% more than we paid for it. And that was even when we pretty much had to take the first offer, because we were moving to a new city. Much of that 38% paid off bad debt and a down payment on our current house so we came out ahead.

HORROR STORY: A reporter friend of mine bought a house in '03 in the same neighborhood as mine. Smaller house than mine but it was the summer and they paid premium price: A full 50% more than I paid for my LARGER house in '01. He left in '04 for a middle market and they STILL haven't sold that house. They are renting it but, 400 miles away, that is a major pain for them.

Try to find a small house in the nicer neighborhood of wherever you are (assuming you're not in a huge metropolis). That way, you can unload it quicker. We sold ours in 27 days last year. Didn't get the price we wanted but, again, it was relative because of what we paid.

The way to make money through your own house is to live in the same town but take advantage of individual economics. If you are not a homeowner, you are a GOOD spot. You just need some money together. You don't have a place to unload. Just go around town in November or December and lowball, lowball, lowball! You might find someone in a $175,000 house that paid $55,000 for it in 1986. They'd might still be happy with $155,000.

Good luck.

[Judge]

[/QUOTE]If you have a house, you don't get the standard deduction AND your interest deduction. [/QB][/QUOTE]

That's absolutely false.
Mortgage interest is deductible whether you take a standard deduction or itemize.

You're just not going to find many homeowners (unless maybe you find the most depressed real estate market in the country) who wish they were still renting.

The tax/insurance issues you bring up are peanuts compared to the appreciation most homeowners have seen in the last few years.

[ April 21, 2006, 10:03 AM: Message edited by: Judge ]

[Spanky Malone]

I live in the Desert SW. Bought new construction house for $137,000 back in 2003. We put it on the market for $249,990 a few days ago. Out here, houses sell at nearly full listing price. We are building a bigger house to cash in while it is still hot. You will never make that kind of money in a 401k!

[Ralphie the buffalo]

Originally posted by Spanky Malone:
We are building a bigger house to cash in while it is still hot. You will never make that kind of money in a 401k!Are you interested in buying some tulip bulbs?

[Trench Worker]

Depending on where you live, most likely this is NOT the time to buy a house. Personally, I'd wait a year and see what happens to the housing market. There is a high likelyhood we are in for a drastic crash in the housing market. If that's true -- and I think it's even money that it is -- the price of buying a house will be significantly lower AFTER the bubble has burst. That's why I'd wait.

If you have a moment, pick up a copy of this month's Harpers Magazine. If the cover story doesn't stop you in your tracks, well, I guess nothing will.

[Spike]

Originally posted by Judge:
That's absolutely false.
Mortgage interest is deductible whether you take a standard deduction or itemize. I would suggest you read IRS Publication 530 (http://www.irs.gov/pub/irs-pdf/p530.pdf), which very clearly states:

To deduct expenses of owning a home, you must file Form 1040 and itemize your deductions on Schedule A (Formo 1040). If you itemize, you cannot take the standard deduction.

It's really pretty clear. You can either itemize your interest on Schedule A, OR you can take the standard deduction ($5000 for a single person, $10,000 for married couples). The standard deduction is only for people who do not itemize. You cannot take both.

What's more, itemized deductions are subject to a 2% AGI floor. That means that your deductions are actually reduced by 2% of your adjusted gross income. For example, if you're married, and between the two of you your AGI is $50,000, that means your deductions are reduced by $1000 (2% of $50K). If you have itemized deductions of $10,000, you actually only get your taxable income reduced by $9000.

In that case you wouldn't want to itemize at all, because the standard deduction is $10K. For a couple with an AGI of $50K, you'd actually have to itemize $11,000 in deductions before you would match the standard deduction.

In fact, if you do your own taxes and follow the instructions on the 1040, you'll find that it isn't possible to itemize AND take the standard deduction. You get to a point where you have a choice between the two, but you cannot take both without some very creative and wilfully criminal maneuvers that will get you audited in a real big hurry.

[ April 21, 2006, 01:25 PM: Message edited by: Spike ]

[foxravens]

Marty
With those numbers you've "crunched" I have concluded there is no way you live in a major market. Don't worry, you still know everything, I just found a poignant bit of naivete in your posts.

Roy
Where I live,$155,000 will not buy you a townhouse.

[gdiamante]

That's another one of those myths the real estate agents and loan salesmen use to try to get you to buy property.[/QB]I dunno, Spike. Pre-home ownership, DH and I owed big bucks in taxes every single year. We haven't owed the IRS a penny since buying our home.

[kmfdmatt]

Agreed. I used to get maybe fifty bucks back every year. Since I have had a mortgage (even with a first time homeowners' rate) my refunds have been in the high hundreds.

[Marty McFly]

Marty
With those numbers you've "crunched" I have concluded there is no way you live in a major market. Don't worry, you still know everything, I just found a poignant bit of naivete in your posts. The 'crunched numbers' work regardless of where you live.
It's a great way to go to buy a house you can AFFORD and make owning a home an enjoyable experience instead of getting in over your head and being 'house poor,' something MANY in this country are.

What sense does it make to own a home when one can barely afford the payments?

What sense does it make to finance a house over the course of 30 years?

None!

Thanks for being such a super detective in determing where I don't work. :rolleyes:

[Judge]

Originally posted by Spike:
</font><blockquote>quote:</font><hr />Originally posted by Judge:
That's absolutely false.
Mortgage interest is deductible whether you take a standard deduction or itemize. I would suggest you read IRS Publication 530 (http://www.irs.gov/pub/irs-pdf/p530.pdf), which very clearly states:

To deduct expenses of owning a home, you must file Form 1040 and itemize your deductions on Schedule A (Formo 1040). If you itemize, you cannot take the standard deduction.

It's really pretty clear. You can either itemize your interest on Schedule A, OR you can take the standard deduction ($5000 for a single person, $10,000 for married couples). The standard deduction is only for people who do not itemize. You cannot take both.

What's more, itemized deductions are subject to a 2% AGI floor. That means that your deductions are actually reduced by 2% of your adjusted gross income. For example, if you're married, and between the two of you your AGI is $50,000, that means your deductions are reduced by $1000 (2% of $50K). If you have itemized deductions of $10,000, you actually only get your taxable income reduced by $9000.

In that case you wouldn't want to itemize at all, because the standard deduction is $10K. For a couple with an AGI of $50K, you'd actually have to itemize $11,000 in deductions before you would match the standard deduction.

In fact, if you do your own taxes and follow the instructions on the 1040, you'll find that it isn't possible to itemize AND take the standard deduction. You get to a point where you have a choice between the two, but you cannot take both without some very creative and wilfully criminal maneuvers that will get you audited in a real big hurry.</font>[/QUOTE]Whoa, my bad.
Of course you have to choose one or the other, but having itemized for several years, I thought there was still some tax break for those who don't.
Still, I don't see how renting could possibly be more profitable than owning in most markets.

[Spike]

Originally posted by gdiamante:
</font><blockquote>quote:</font><hr />That's another one of those myths the real estate agents and loan salesmen use to try to get you to buy property.I dunno, Spike. Pre-home ownership, DH and I owed big bucks in taxes every single year. We haven't owed the IRS a penny since buying our home.</font>[/QUOTE]Are you saying you haven't had any income tax liability, or that you simply haven't had to write a check at the end of the year for the taxes you owed that weren't withheld from your paycheck?

If it's the former, I find that difficult to believe unless you're not actually working and are living off some kind of retirement capital, or some similar situation. Perhaps you're using saved capital to make improvements on your home. Or perhaps you have a bunch of kids and support some 65 year olds who are blind. In any such case, you would not really be considered the norm. Most people still have tax liability if they buy a house; it doesn't suddenly make all your income tax free.

I suspect it's the latter, that your withholding was sufficient to cover your tax liability, and you didn't have to write a check at the end of the year for the unpaid portion. If so, so what? We already established that a portion of your interest expense comes back to you in the form of reduction of your taxes. The same amount was likely taken out of your paycheck during the year, but since your overall tax burden was reduced by your itemized deductions, you simply didn't owe as much in the end. Just because you didn't have to write a check April 17 doesn't mean you didn't pay any taxes for last year.

So you reduced your taxes. What I'm saying is that in order to reduce those taxes, you have to spend considerably more than that reduction in interest, maintenance and property taxes. If you spend $10K in interest, you do NOT get $10K taken off your taxes.

That's what I mean when I say that if you buy a house just for the tax benefit, you'll normally end up losing more in expenses than you gain back in tax liability. Loan officers and real estate agents prey on people who lack math skills by convincing them that somehow the purchase of a house is going to magically obliterate their tax liability. Simple math tells you that if you spend $150 to save $100, you've lost money. But the loan officer and real estate agent got their commissions.

That's not to say there aren't other reasons to buy a house. You may have gotten into your house when the getting was good. You may live in an up and coming area. In MY area, after looking at the prices and the outlook on the housing market NOW, then doing the math comparing the expenses and benefits, it makes no sense whatsoever. Even with the tax benefit, I would end up paying more each year in property taxes, interest, insurance and maintenance costs than I currently pay in rent. Meanwhile the equity I might be building is instead earning interest as cash and growing at a faster rate than if I had it tied up in property.

[RoyMcAvoy]

And that's why I live here, foxravens.

One murder in the city in the last 11 years, great parks, superior schools and teachers. I can ride my bicycle to work 150 days out of the year.

Perfect for two kids with a dad in TV news.

But, 90 minutes away, that $155,000 house here, in the good neighborhood, would go for $475,000.

All relative for me.

[TVMattNYC]

Originally posted by Marty McFly:
</font><blockquote>quote:</font><hr /> You've got to be kidding. Using your formula someone making $75K would only be able to afford a $100,000 mortgage.

Do the math: Earning $75K, after taxes you're bringing in about $865.00 a week. $843.00/month buys you a $100,000 15-year mortgage.

Unless you have a PILE of money to put down, WHERE in any market that pays $75K could you buy a home in the low $100K's?

And you haven't even paid for insurance, maintenance, and taxes yet! That's why you put at least 20% down... or did you miss that?</font>[/QUOTE]Apparently YOU missed this: "Unless you have a PILE of money to put down ..."

Dude, even putting 20% down ... with a $100K mortgage you're still only talking $125K. Again ... tell me in what market that pays a broadcast salary of $75K would you find a house for that amount?

[Marty McFly]

Apparently YOU missed this: "Unless you have a PILE of money to put down ..."

Dude, even putting 20% down ... with a $100K mortgage you're still only talking $125K. Again ... tell me in what market that pays a broadcast salary of $75K would you find a house for that amount? Rather than just pissing your boss off for the hell of it, you put aside the feelings 'want' and 'right now' and instead, SAVE. One has to actually be an adult and say 'NO' to every last urge to spend and to satisfy that feeling of getting what you want RIGHT NOW.

Instead, you save every last dime you have so you can put a big downpayment (at least 20%) on the house you CAN AFFORD.

Make 75k a year? Before taxes, that's 6,250 a month. If you're eyeing a house that costs 150k, you should save 30k. If one can have the DISCIPLINE to 'live like no one else' so later they can 'live like no one else', they can save that money IN LESS THAN A YEAR.

They could pick up another job to save faster, have a garage sale, go the E-Bay route or cut their monthly expenses (eating out, cable, etc.)

OR...

They could just put NOTHING down, finance the house for 30 years and have it RIGHT NOW.

One route requires patience and discipline.
The other? Heck, go all in on the first round!

I know what I did. I know where I got my advice. (http://www.daveramsey.com) And I know what's working for many, many others.

YOU CAN DO IT!

[gdiamante]

[QUOTE]So you reduced your taxes. What I'm saying is that in order to reduce those taxes, you have to spend considerably more than that reduction in interest, maintenance and property taxes. If you spend $10K in interest, you do NOT get $10K taken off your taxes.

Your second assumption was correct. We haven't had to write a check in April for eight years. Prior to that, we had to write checks despite filing W4s with only one allowance each. If we could have afforded it, we'd have gone for no allowances. But then we wouldn't have been able to afford the rent.

You are also correct in your guess that we got into our house while the getting was good, in one of the fastest growing regions in the nation. Our home is worth double what we owe on it according to the last appraisal we had done.

At least in our case, renting makes no sense. And it sure is nice to not have to worry about landlords; we've had some doozies!

[TVMattNYC]

Originally posted by Marty McFly:
</font><blockquote>quote:</font><hr /> Apparently YOU missed this: "Unless you have a PILE of money to put down ..."

Dude, even putting 20% down ... with a $100K mortgage you're still only talking $125K. Again ... tell me in what market that pays a broadcast salary of $75K would you find a house for that amount? Rather than just pissing your boss off for the hell of it, you put aside the feelings 'want' and 'right now' and instead, SAVE. One has to actually be an adult and say 'NO' to every last urge to spend and to satisfy that feeling of getting what you want RIGHT NOW.

Instead, you save every last dime you have so you can put a big downpayment (at least 20%) on the house you CAN AFFORD.

Make 75k a year? Before taxes, that's 6,250 a month. If you're eyeing a house that costs 150k, you should save 30k. If one can have the DISCIPLINE to 'live like no one else' so later they can 'live like no one else', they can save that money IN LESS THAN A YEAR.

They could pick up another job to save faster, have a garage sale, go the E-Bay route or cut their monthly expenses (eating out, cable, etc.)

OR...

They could just put NOTHING down, finance the house for 30 years and have it RIGHT NOW.

One route requires patience and discipline.
The other? Heck, go all in on the first round!

I know what I did. I know where I got my advice. (http://www.daveramsey.com) And I know what's working for many, many others.

YOU CAN DO IT!</font>[/QUOTE]OK ... pay attention now.

You still haven't answered my question. Perhaps the third time will be the charm:

Again ... tell me in what market that pays a broadcast salary of $75K would you find a house in the low $100K's?????

[RoyMcAvoy]

TVMattNYC:

There are not many of those markets with the 2:1 ratio of decent home : salary, that I'll admit. But we're close. The house we're currently in was just over double my salary.

$120,000 here buys what I would call a "decent home", $140,000 gets you that home in move-in condition. Location is what's crucial. We have all of the lifestyle benefits (safety, good schools) that people in the overpriced Big City (90 minutes away) pay premium prices for, but with a much shorter commute to work.

Granted, it means if I ever want to go to the symphony, the opera or an overpriced place to eat, then I gotta drive.

I'll say this, however, the gap between owners and renters probably hasn't been this steep since the Depression, especially since the 2001-2005 housing boom and especially in major cities.

[TVMattNYC]

Originally posted by RoyMcAvoy:
TVMattNYC:

There are not many of those markets with the 2:1 ratio of decent home : salary, that I'll admit. My point exactly.

So aside from those few markets were such a ratio exists, your formula is completely unworkable.

[Marty McFly]

Well Matt, I guess if we're not making MILLIONS in TV, then we're doomed to either rent for the rest of our lives or just finance a house we can't really afford for at least 30 years.

:rolleyes:

Naysayer...

[Marty McFly]

tell me in what market that pays a broadcast salary of $75K would you find a house in the low $100K's????? Ok wisea$$, I'll play your petty little game.

Let's see... 212 markets?

I'm going to wager that in every one of those markets, someone is making 75k a year.

It may be the GM.
It may be the weather guy.
It may be a photog who gets a ton of overtime and freelances (weddings) on the side.
It may be the editor who has the discipline to SAVE his or her money rather than spend it.

And in what market would you find a house in the low 100's?

Let's see... 212 markets... covering all of the United States.
I'm going to go out on a limb here and say that there are THOUSANDS of homes for sale in AMERICA that are around the 100k mark.

So there's your answer Rainbow! In EVERY MARKET!

Should the above steps need a disclaimer saying they don't apply to those who work in television?!

graemlins/bs.gif

[ April 22, 2006, 09:42 AM: Message edited by: Marty McFly ]

[TVMattNYC]

Originally posted by Marty McFly:
[Let's see... 212 markets... covering all of the United States.
I'm going to go out on a limb here and say that there are THOUSANDS of homes for sale in AMERICA that are around the 100k mark.

So there's your answer Rainbow! In EVERY MARKET!
graemlins/bs.gif [/QB]Not in NYC.

Not in LA.

Not in Chicago.

Not in San Francisco.

Not in Boston.

Not in Philly.

Not even in Pittsburgh.

Nice try.

[RoyMcAvoy]

No, there are not many markets where the 2:1 ratio is doable, including my Big City hometown.

But, having grown up in Suburbanville of a Top 20 market, I have little desire to go back. Oh sure, if a $200,000 anchor job pops up and they want little ol' me, I'll find a way to "make it work".

About three years ago, I looked in the mirror, looking in the business and realized that I probably didn't have "the right stuff" to be a main anchor in Market 30. Maybe I will one day, but I'm not going to waste any extra time worrying about it. So I make the best of what I can do, which is here.

If I was 25 and single, I'd probably crave the life of the Big City...but I'm 31 with 2 kids, so security has a bit more of a priority.

To each their own, of course!

[TVMattNYC]

Originally posted by RoyMcAvoy:
No, there are not many markets where the 2:1 ratio is doable, including my Big City hometown.

But, having grown up in Suburbanville of a Top 20 market, I have little desire to go back. Oh sure, if a $200,000 anchor job pops up and they want little ol' me, I'll find a way to "make it work".

About three years ago, I looked in the mirror, looking in the business and realized that I probably didn't have "the right stuff" to be a main anchor in Market 30. Maybe I will one day, but I'm not going to waste any extra time worrying about it. So I make the best of what I can do, which is here.

If I was 25 and single, I'd probably crave the life of the Big City...but I'm 31 with 2 kids, so security has a bit more of a priority.

To each their own, of course!So, Roy, why then this superior attitude over people who are not following your admittedly near-impossible formula?

[RoyMcAvoy]

Matt, brother. You seem to be itching for a fight where there isn't one to be had.

I'm just saying that not everywhere in the U.S. housing market has become Manhattan, the Hollywood Hills, San Francisco or Seattle.

A person can do very well in this TV news dreck, in the long run, if they either a) get to a Top 10 market and make $150,000 a year or b) stay in a small or medium market, where the housing is relatively inexpensive and a main anchor salary can go a long way.

I chose 'B' because I looked at the odds, looked at myself and cut my losses.

The people in this business I feel for are the ones who move to Charlotte or Minneapolis to report for $35,000, just to be on TV in Charlotte or Minneapolis. Or the ones who move up 20 markets every two years and are still renting at 38, pinning their professional hopes on the main anchor in Pittsburgh dropping dead of a heart attack so they can "move in" to the main anchor. At that point, TV stations are just using them for cheap labor.

It's not meant to come across as "superior" but I do have a plan. McFly and I may not agree on how to tip a pizza driver, largely because he is a cheap SOB in that regard ;) , but the aforementioned Dave Ramsey is dead on...you HAVE to have a plan.

Being in TV, especially in sports, in small markets, and moving three times in the first three years, rang up serious bad debt for me and my wife. For years, I was convinced that I was just that close from a job that would double my pay and chop my market size in half.

My "plan" in this whole thing called life is to have a job that never feels like work, pays me reasonably well, allows me to stay creative, and doesn't drive me into the ground six months out of the year (like my last station did).

TVMNYC, from what I've read over these years, you have a good job where you are and seem to have your head screwed on straight. But far too many people in this business don't. I've seen too many people with fancy college degrees (and often $60K or $70K in loans) who are so far in debt, they're worth more dead.

I don't plan to be one of them. That's all.

[TVMattNYC]

Originally posted by RoyMcAvoy:
A person can do very well in this TV news dreck, in the long run, if they either a) get to a Top 10 market and make $150,000 a year or b) stay in a small or medium market, where the housing is relatively inexpensive and a main anchor salary can go a long way.
Wow. Your elitism is beyond appalling.

So only two choices, huh?

What about the losers who work in this industry who aren't "main anchors"?

[Spike]

I was thinking the same thing. The last local station I worked in had 70 employees in the news department. It only had four main anchors, if you count the weather and sports anchors. That's less than 6% of the total workforce. Even if you count in the morning team as "main anchors" (since so many of them think they are), that's still just over 11%.

What are the other 89% of us supposed to do?

[RoyMcAvoy]

Your elitism is beyond appalling? I live in a humble town of 80,000 and a guy from New York City is calling me an elitist?!? That rocks!

"Please respond to a hyperbole overdose, respondent's phone number is area code 2-1-2..."

Seriously, I'm just trying to provide some rationale here, in a galaxy far far away from yours, as to how an average Schmoe like me can make it work.

Why do I say main anchors in this example? Because, in 2006 local television, very few aside from the GM, the ND, sales managers, and main anchors in small markets make any money. In middle markets, add in the EP and a few others. At fine middle-market stations, you may find an investigative reporter here or there who has been there 25 years and is making good money. And that's probably it.

In a large market, the net that encompasses high wages is a bit broader: producers, photographers, editors, reporters all fall into this, unless they're at some Sinclair outfit.

But back in Market 50-212, it's becoming increasingly more difficult to "make it" unless you're in a prominent slot. I know because I've turned down offers in Top 50 markets because they paid less than what I made on the desk in Market 140...doing sports no less!

I love what I do and want to stay in the business until I'm in my 60s. But, to make it work with what I've got, this is the way to do it. It's also part of why I moved last year -- I landed a better job (with much better pay and hours) in a city that is far less expensive to live in.

I WILL NOT spend my years from 60 on until The End living like so many I see. Plugging the nickel slot machines, playing Powerball and calling a TV newsroom when I missed that night's numbers. Living on $976 a month. That may be 97% of Americans in 35 years...but I'm going to make DAMN sure it's not me.

In my last city, I was blessed to live door to Mr. Rooney, a retired police officer. He lived next door to me six months out of the year and lived in Sarasota the other six months. Raised 7 kids in a 4-bedroom house. Days before I became a parent, we were mowing our laws on a hot summer day and I asked him how he did it.

"I kept getting raises each year and I didn't move around. Invested the raises Been in this house since 1961."

Now he plays golf everyday and isn't constricted by the poor financial planning that makes the final years miserable for so many older people.

However, if I'm being called an elitist and superior, well...maybe I am. ;) I'd rather be called that than some simpleton who can't look past his next six pack of Pabst Blue Ribbon.

EDIT: Spike, in the previous post, I should have made it clear about mid-level markets where more people can "live well". In the middle market I interned at ten years ago, the anchors all did well, one veteran reporter did well, management was management and everyone else was broke. This was a middle-market #1 station. That same station can bring in reporters for 25K and photographers for 22K. I know it because some of my former colleagues were hired at that pay in the last few years. And that market is MUCH more expensive to live in than mine (the $155,000 house example in my town would go for about $250,000 in that city).

How in the heck can someone get ahead with that pay...in that housing market?

[ April 22, 2006, 10:22 PM: Message edited by: RoyMcAvoy ]

[imported_Seraph]

FIGHT! FIGHT! FIGHT! FIGHT! FIGHT! FIGHT!

[Spike]

On the other hand, I do find it ironic that Matt of all people is calling anybody elitist, after some of the things he has written in the past about salaries and quality of life in NYC.

[Marty McFly]

Originally posted by TVMattNYC:
</font><blockquote>quote:</font><hr />Originally posted by Marty McFly:
[Let's see... 212 markets... covering all of the United States.
I'm going to go out on a limb here and say that there are THOUSANDS of homes for sale in AMERICA that are around the 100k mark.

So there's your answer Rainbow! In EVERY MARKET!
graemlins/bs.gif Not in NYC.

Not in LA.

Not in Chicago.

Not in San Francisco.

Not in Boston.

Not in Philly.

Not even in Pittsburgh.

Nice try.[/QB]</font>[/QUOTE]Houses IN Chicago for 100k or less: HERE (http://idx.prubiros.com/results.aspx?&VIP=Yahoo!+IDX&cc=realestate&fclose=n&newhome=n&za=and&fullnodeid=750007014&searchgeo=Chicago%2c+IL&searchtype=2&propertytype=1&sort=5&so rtacdc=desc&firstrecord=0&searchminprice=0&searchmaxprice=100000)

That took almost 27 seconds to find on a Yahoo! search.

I'm sure if I were to devote at least 7 more minutes to blowing your lame theory out of the water I could come up with at least 200 houses in EACH MARKET in the 100k price range.

You can pi$$ & moan about this 'formula' that I took from Dave Ramsey and claim it's unrealistic and can't be done, but I'm following it and I'll have my house paid off before I'm 45.

And somehow... just somehow, this 'wacky formula' is working for me.

But it must work for just me.

Go figure.

[ April 22, 2006, 10:30 PM: Message edited by: Marty McFly ]

[upandown]

Buy a house?
No brainer.
My house makes more in appreciation than I do in salary.

I'm a multi-millionaire, and much of that value has to do with this house on top of a mountain next to open space in Marin County, Ca. . Knock on wood, the real estate values will not nosedive.

As for you...the mortgage write-off, alone, will save you BUNDLES.

Do it.

[RoyMcAvoy]

There was a good point brought up on Page One of this thread.

Because SO MANY 0% interest loans are out there from the recent housing boom, IF the economy turns sour and the markets drop, even 15-20%, a large supply of houses will be on the market...much cheaper than now.

If the values nosedive and a recession hits, foreclosures will be there, coast-to-coast, from people who took out more in mortgages than they should have.

Might be worth watching.

[Marty McFly]

Oh... to add to the complete lines of graemlins/bs.gif sputtered by TVMattNYC, one should check the map on this page: TV market maps (http://ekb.dbstalk.com/TVMarkets/)

Click on the NYC market. Or Chicago. Or LA. Or Boston. Or Pittsburgh.

And then decide if there aren't ANY homes available for 100k or less in those markets... ANYWHERE.

[Spike]

Originally posted by Marty McFly:
Houses IN Chicago for 100k or less:

&lt;broken link removed&gt;

That took almost 27 seconds to find on a Yahoo! search.

I'm sure if I were to devote at least 7 more minutes to blowing your lame theory out of the water I could come up with at least 200 houses in EACH MARKET in the 100k price range.Did you look at any of the houses your search delivered? Those are mostly HUD foreclosures. The ones that have pictures are boarded up.

So, yes, your system apparently works, IF you don't mind living in a reclaimed crack house and dodging bullets on your way to the bus stop when your car is stolen from in front of your house and stripped. Sounds like a great place to raise a family.

Sorry, point not proven.

[triumph]

quote:
--------------------------------------------------------------------------------
Originally posted by Marty McFly:
Houses IN Chicago for 100k or less:

&lt;broken link removed&gt;

That took almost 27 seconds to find on a Yahoo! search.

I'm sure if I were to devote at least 7 more minutes to blowing your lame theory out of the water I could come up with at least 200 houses in EACH MARKET in the 100k price range.
--------------------------------------------------------------------------------

Did you look at any of the houses your search delivered? Those are mostly HUD foreclosures. The ones that have pictures are boarded up.

So, yes, your system apparently works, IF you don't mind living in a reclaimed crack house and dodging bullets on your way to the bus stop when your car is stolen from in front of your house and stripped. Sounds like a great place to raise a family.

Sorry, point not proven.
Hah! I was about to say the same thing. You deserve to have to live in a 100k Chicago house for a year before you say something like that. Marty - you make good points but they're a little too optimistic for many of us around 30 years old that want to own a home.

triumph

[Spike]

Originally posted by upandown:
Do it.... Says the multi-millionaire former network correspondent who is now a reporter in the #5 market, bought his home before the housing boom and hasn't had to live on what passes as a normal broadcast salary in the lower markets in many years. It's really easy for you to give people advice, based on your own financial history and situation, that they can't afford.

Originally posted by RoyMcAvoy:
Because SO MANY 0% interest loans are out there from the recent housing boom, IF the economy turns sour and the markets drop, even 15-20%, a large supply of houses will be on the market...much cheaper than now.You're absolutely right. That's when it might be a good time to buy. That's part of the reason it's really stupid to buy now, instead of saving the money one would be throwing away on a house and letting it grow while remaining liquid. When the housing market crashes, the money will be there and will help you avoid getting raped on loan interest. If the housing market never crashes, you still have your cash growing and working for you at a pace that will match or exceed the housing market over the long term.

But that brings up another big problem. All these people are talking about what great investments their houses are, but if people are unable to afford to buy these houses, the inflated prices can't be sustained. If there's a crash and a wave of foreclosures, it will bring everyone's property values down. It's simple economics. Why should I buy your $500,000 hovel when I can buy something just as large down the block from you for $200,000? If you really need to sell, you'll have to drop your price and cut into that huge gain you were counting on.

So, ten years from now, when some of these people think they'll be able to sell their $200K houses for $1 million, they'll be really shocked to discover that the house won't sell for much more than they have in it after such a crash. Meanwhile, if I'm paying the same amount of money into low risk investments, I don't have to worry about whether I can sell anything, because I'll have the cash on hand.

And one other thing: Land goes bad. I live not too far from a subdivision that has some really nice million dollar houses in it. But those people are having a hard time selling their houses at all, because some ancient oil tanks at a facility nearby, which was built back when that was a rural area out away from town, have leaked into the ground and contaminated the entire area. Insurance doesn't pay out on that, because the houses are still inhabitable. But THEY don't want to live there, and nobody else does either, so their "investments" aren't worth anything near what they thought.

All kinds of things can happen to land and houses, and insurance doesn't always cover what you think you should get. I once covered a story where a bunch of homeowners thought their nice, solidly middle class subdivision was protected by the neighborhood covenant against having people put in mobile homes. But the covenant expired, and before the neighborhood association could do anything about it a trailer salesman had bought an undeveloped triangular "leftover" lot that was too small for a normal house, put a trailer on it and sold it to a lower income family. Six houses went up for sale on that street almost immediately, and nobody could sell them. It seems that the buyers who were looking for that kind of neighborhood didn't want to live next to a trailer. Insurance doesn't cover that at all.

Oh well. There went all those investments.

[TVMattNYC]

Originally posted by RoyMcAvoy:
Seriously, I'm just trying to provide some rationale here, in a galaxy far far away from yours, as to how an average Schmoe like me can make it work.

Why do I say main anchors in this example? Because, in 2006 local television, very few aside from the GM, the ND, sales managers, and main anchors in small markets make any money. In middle markets, add in the EP and a few others. At fine middle-market stations, you may find an investigative reporter here or there who has been there 25 years and is making good money. And that's probably it. Wow. So people who aren't "main anchors" don't even make "average Schmoe" in your definition.

So that makes the producers, writers, editors, shooters, and engineers ... what? LOSERS? Not even worthy of your home-buying discussion?

Nice.

[ April 23, 2006, 12:34 AM: Message edited by: TVMattNYC ]

[RoyMcAvoy]

If you're looking to be offended...you'll find a way to be offended.

[Marty McFly]

Our resident gay real estate mogul TVMatt said that there weren't ANY houses to be had in the 100k range in several markets.

Like the Chicago market.

NOT just in Chicago, but in the ENTIRE CHICAGO MARKET.

So I found home for 100k IN CHICAGO.

Yeah, they were old crack homes, but at 100k, they're going to be. Especially IN Chicago. Heck, most any home at 100k is going to be a fixer-upper.

So the debate has turned to home buying TIPS & SUGGESTIONS to 'your home buying formula is flawed because I say so.'

Marty - you make good points but they're a little too optimistic for many of us around 30 years old that want to own a home.

triumph I am in my early 30's and own a home. And in less than 13 years it will be paid off... using a 'flawed' & too optimistic system that I got from this guy. (http://www.daveramsey.com)

[ April 23, 2006, 07:41 AM: Message edited by: Marty McFly ]

[Trench Worker]

upandown, no disrespect but, you're making a recommendation looking in the rearview mirror. Forget the tax advantages for a moment. Sure they exist. But if the bubble bursts, that's all a new homeowner will have to console themselves.

The rise in home appreciation over the last two decades is unprecedented in this country. There was an initial boom fueled by pent up demand after interest rates approaching 20% fell to a more palatable 11% during the Reagan years. By the end of the 1980s, except for a few pockets, the housing market had cooled and a recession created lower prices. The market again reset itself and when the stock market boomed in the mid-1990s, buyers re-entered the home buying market with renewed fervor. Baby Boomers sold starter houses and moved to larger homes, and as that demographic overlapped the second home buying market, second home sales soared pricing many local residents out in resort areas. Working wives gave young families even more buying power and the boom continued. Interest rates fell to historic lows and people refinanced and bought even larger homes. Baby Boomer parents dies leaving them inheritances to invest. The country has been caught up in a home buying frenzy for the last fifteen years.

But every boom cycle has to end. No market ever sustains expansion forever.

The additional buying power of two income families was maxed out when the rise in those families' incomes coincided with the appreciation of home prices. Mortgage interests rates are ticking upward. Fuel costs for transportation and heating are going to levels unseen in this country's history. And we are a nation of debtors. We will be paying off yesterday's purchases well into a thousand tomorrows.

If the home buying market becomes destabilized (and realistically, how can it sustain itself?), those people who bought at the high point of the boom face serious economic strain. When the resale price of their home falls, they will be paying mortgages that are disporportionate to the asset they are tied to. If you do simple math and say (for the sake of argument) that a house that costs $500,000 today will really cost double that in actual dollars due to compounded interest, the final tally is $1,000,000 out of pocket (not factoring in the resulting tax deduction for the moment) over the term of the loan. That million dollars will be due regardless of the value of the house. If the value of the homes doubles (as many have in recent years), then the million dollars in mortgage payments is a true bargain. But if the home's value falls (to say $350,000), instead of paying twice its cost, the owners are now responsible for triple the sale price. And the mortgage deductions will not be adjusted to reflect that decrease.

If the bubble bursts and that kind of calculus comes into play in the housing market, we are in for a world of trouble. And there is precedent for it. Japan went through a very similar situation in the 1990s and they are only just recently working their way out of it. It wasn't so long ago that we were frightened by the buying power of the Japanese. Now it is the Chinese who have us worried. Time changes everything, particularly when it comes to economics.

I would advise people to educate themselves before buying a house in this market. Save as much money as you can for your down payment. Forget the interest only loans. Forget down payments of five percent, ten percent or less. Think on a traditional level because history holds many important lessons. And remember, you don't neccessrily want to buy a tax deduction, even if it is your house. I think if you look obejectively at this market and if you wait a bit you will see many bargains materialize. There is an important interaction between the cost of the house and interest rates. At some point the rise in one negates the positive aspects of the other.

Look for good solid deals in stable locations. Be careful. You may have to live there for a long time.

[ April 23, 2006, 08:56 AM: Message edited by: Trench Worker ]

[Ralphie the buffalo]

Thank you
Thank you
Thank you, Trenchie for getting us back on track.

I would suspect that many of the people on this board have never experienced a real estate downturn. They don't know the lessons that history has taught us.

I lived through a major real estate downturn. It was my good fortune to be a buyer in a very depressed market so I did well.

Just a few years ago it would have been inconceivable to almost anyone in Colorado Springs that the city would become a symbol of a huge real estate debacle. After growing steadily for several decades, the local economy in the early 1980's seemed on the verge of a boom.

Here's a link to the archive article quoted above.

http://query.nytimes.com/gst/fullpage.html?res=9C0CE3DE1139F935A25752C0A9669582 60&sec=&pagewanted=1

[ April 23, 2006, 11:13 AM: Message edited by: Ralphie the buffalo ]

[upandown]

If it offends some of you that real estate has served me well, and that I produced general numbers to make the point, I apologize. It's not boasting. It's an example of what can happen long term.

Look at history.

Long term, real estate prices move up, not down.
I can say that having owned through two downturns, after buying at a time when my first mortgage rate was 14%.

You seem to think I had it easy. Saving to buy a house is never easy. I sacrificed for two or three years before making that first purchase in 1984...a time when people said I would never be able to afford it on my salary. I was absolutely petrified. I remember buying a pair of thick-soled shoes about a week before the deal closed, figuring they would have to last for years.

Should you pluge into any deal? Absolutely not. My mother was going to buy a condominiium in Marin county last year...700-1,000,000. That is ridiculous. But a year later???
They're higher.

That said, I could certainly not afford to purchase my home for its value, today...and am baffled at where people find the money to do so.

Still, if you do your homework and find a property that will hold its value, or that is located in a neighborhood that is improving,
you can do well in the long term. Location, location, location.

Ultimately, for security, it helps to own a piece of the rock.

[ April 23, 2006, 03:04 PM: Message edited by: upandown ]

[Trench Worker]

I must be in an argumentative mood today. I'm always grumpy before I travel. Also, there's a sense of competitiveness that develops when debating with the Dean himself. So here goes.

Yes, look at history. It's important that you do. There's more to history when it comes to housing prices than the average person knows. 17% interest rates don't tell the whole story. There's also issues of supply and demand involved and when interest rates were that high, supply was adequate and abundant. A realtor I talked to today told me nothing is moving. The supply is there. The buyers are not.

Don't take my word fo rit. I'm an amateur. Here are two articles. the first was written by the guy who called the stock market debacle of March 2000. I had made ten times my money in that boom. I sold everything I had after reading this guy's book. Literally three hours later, that house of cards fell down. The other article is just icing on the cake. Both are worth your time.

http://money.cnn.com/2005/01/13/real_estate/realestate_shiller1_0502/

http://www.newsmax.com/archives/articles/2005/6/24/115349.shtml

I gotta pack.

[foxravens]

Roy...
Your story is very familiar to we regulars.
It should be. You tell it all the time.
OK, you left sports behind to take a small market news anchor position.
You make "nice coin".
We get it already, ok?

Also, you seem to like to come off as some kind of "TV sage". Many of us who left the small markets behind find that kind of amusing/annoying, ya know? You may not mean to sound that way, but you do and it's semi-annoying.

Not trying to rip you
Just trying to make you see how you usually come across.

[upandown]

Trench,

I agree with those articles, and never said this is a buyer's market.
I would never buy now without a great deal of care and research.

But, after bubbles burst, there will always be opportunities.

That said, pick your spots.

[ April 23, 2006, 03:11 PM: Message edited by: upandown ]

[Trench Worker]

Just for laughs let me add this link. Does this await the San Francisco real estate market? Scary.

http://patrick.net/housing/crash.html

[upandown]

Strangely, they are saying that it is a seller's market here, again.

Check back after the bird flu and next big quake.

[Trench Worker]

upandown, now we are in agreement. There will be tremendous opportunity ahead in real estate. My advice to wait is an acknowledgement of that expectation.

Hey I just sold my shares of ERS -- Empire Resources. I bought them on February 27th. My first round-tripper since the good old days. The stock market is a mine field today. But there's a lot of stuff going through the roof there.

[upandown]

I have no complaints re: stocks, having bought back in long before the present recovery, and doing so with an expert who manages conservatively.

As for real estate here...it seems to double every ten years, downturns or not.

[ April 23, 2006, 03:17 PM: Message edited by: upandown ]

[RoyMcAvoy]

Originally posted by foxravens:
Roy...
Your story is very familiar to we regulars.
It should be. You tell it all the time.
OK, you left sports behind to take a small market news anchor position.
You make "nice coin".
We get it already, ok?

Also, you seem to like to come off as some kind of "TV sage". Many of us who left the small markets behind find that kind of amusing/annoying, ya know? You may not mean to sound that way, but you do and it's semi-annoying.

Not trying to rip you
Just trying to make you see how you usually come across.Yikes! Tough crowd, fox. All the best!

[Trench Worker]

San Fran is a unique market. If only that city were as beautiful as Boston, the prices might be warranted. But it seems they are somewhat inflated as if -- how do I say this tactfully -- they were on......steroids???

[upandown]

Trench, we have much better weather, and more beautiful vistas.
We have micro-climates.

Bubbbles cannt burst unless they are first identified and perceived. It seems we're there.

That said...in SF, places that went for $250K in the mid 80's now sell for 2M.

Dude, I cannot explain it.

But SF is not unique. My old man purchased his first home in Reseda, Ca (Los Angeles area), for 10,000 in 1953.
In 1960 he sold it for 25k and built a house which he sold in 1975 for $200k.
Built another house for 200k...

Solld in in 1988 for 600k.

So, if you look at California's historical curve, it's all up.

When will it stop?

I say, again...plague, quake, disaster?

I am just very happy to have a lot of equity in this particular house...and to know that if there is a general burst of the bubble in Real Estate, we should be comparitively okay.

[ April 23, 2006, 03:45 PM: Message edited by: upandown ]

[Spike]

Originally posted by upandown:
I agree with those articles, and never said this is a buyer's market.You seemed to be going that direction with your first post:

Originally posted by upandown:
Buy a house?
No brainer.

* * *

Do it.I'm glad you've backed off that a little, because you were starting to worry me a little that you had gone completely out of touch with current reality.

Unfortunately, you also mentioned that your house doubles in value every ten years. That's not good enough, because cash invested conservatively under the current outlook for interest rates should also just about double in ten years. The homeowner would get a tax advantage by not having to pay capital gains on the first $250K of gain from his house, but the guy investing the cash wouldn't be paying property tax or maintenance costs. And if the cash investor invests really wisely, finding long term investments with good interest rates that beat the market outlook, he'll do even better than doubling his money.

Plus, you don't have to mow your bank account. That alone is worth avoiding the headache of property.

[Trench Worker]

Upandown, I think you missed the joke. Barry Bonds my good man. Barry Bonds. And vistas aside, I still say Martha's Vineyard in August is the most beautiful spot in the country. Although I must admit, Lake Tahoe is marvelous also.

Oh, and FYI, the state with the highest rate of home appreciation over the last twenty-five years is not California. It's Massachusetts. Keep in mind I said state, not region. Additionally, the city with the highest percentage of million dollar homes isn't San Francisco, it's Cambridge, MA. But the median price of homes is higher in California than Massachusetts. But not by all that much.

Imagine if the winters were warmer.

[ April 23, 2006, 05:33 PM: Message edited by: Trench Worker ]

[Ralphie the buffalo]

Originally posted by Ralphie the buffalo:
</font><blockquote>quote:</font><hr />Originally posted by Spanky Malone:
We are building a bigger house to cash in while it is still hot. You will never make that kind of money in a 401k!Are you interested in buying some tulip bulbs?</font>[/QUOTE]This earlier exchange played in to the conversation that is now going on. But, the tulip reference probably went right over many folk's heads. Here is a quick explainer:

http://www.pbs.org/wgbh/pages/frontline/shows/dotcon/historical/bubbles.html

As for the link that Trench posted http://www.newsmax.com/archives/articles/2005/6/24/115349.shtml there are a few important passages that struck me.

"One clear indication that residential real estate is overvalued is the relationship between home prices and rents.

The price of a home should reflect the future benefits of ownership, in the form of rental income for an investor or rent saved by an owner-occupier. When the price-to-rent ratio is high, property is overvalued."

I have been watching the bubble also and have been nervous for a while. We thought about selling our house this spring, until I looked at prices for rentals in our area. It made more sense to stay in our bigger house, even though our family size has shrunk, than to downsize to a rental. One of the benefits of living in fly-over country where the prices have risen sanely.
So I am not so worried about a big drop here like many other regions.

Now back to tulipmania, errrr, I mean the coming housing bubble. It is just a matter of time and the right triggers.

"In the U.S., the ratio is 35 percent above its 1975-2000 average. A drop in home prices is more likely today than after previous booms for three reasons, according to The Economist: Homes are more overvalued, inflation is much lower and many more people have been buying homes as an investment.

If prices begin to level off or drop, as they did in May, owner-occupiers will likely remain in their homes, but investors are more apt to sell, particularly if rents don't cover interest payments. That will increase the supply of homes for sale and further depress the market."

And that is where our friend from the top of this thread, Spanky Malone, loses his retirement money and ends up homeless to boot. Pigs may get fat for a while, but usually end up getting slaughtered in the end.

Your house is never an investment.

It is a place to live. Period.

If it goes up, great. Many of us break even by the time renovations and repairs are factored in. Do the math.

A house is a hedge against inflation that renting cannot provide.

[ April 23, 2006, 07:04 PM: Message edited by: Ralphie the buffalo ]

[foxravens]

Exactly, Ralphie.
Thanks for posting that.

[upandown]

I look at it this way.
A home IS an investment, though it should not be the only one.

With luck, I'll pay this place off, die here, and pass it along to my daughter so that she does not have as many worries as my generation, or our parents before that.

As for the bubble in SF...I don't think it is as likely to burst as it might deflate simply because there is nowhere else to build around here. Housing is a relatively finite commodity in this very desirable place.

After a quake, however...all bets might be off.

I hope the rest of you are, in the long run, as fortunate as my family and I have been. It's a long journey, but you do have to take a first step.

[3.58 mHZ]

THIS has been a great exchange . . . I have to say, I've always wondered about the really transient TV types who were market jumping AND would buy a house where they were working, not knowing the longevity of the tour of duty . . .

[Jane Craig]

Bought my first home (a condo) just before a huge run-up in real estate prices in that market. Only months after I moved in I would have been unable to afford my own home. But the bubble burst and when I sold it after nearly ten years the sale price was just $5K more than I'd paid -- but when you figure I'd lived there, building equity, paying only taxes and condo fee, it was still a good deal.

I've bought in three other places since and lived in my homes for two to six years, always in good neighborhoods. Never made a massive profit, but always able to buy something decent on the next move and sell my home relatively quickly.

Yes, there's the tax break and the equity building, but my advice is to buy what you can afford, take the shortest term mortgage that makes sense, build equity as fast as possible, and that will give you leverage if you do move in just a short time.

p.s. -- Loved the tulip reference...

[ April 24, 2006, 06:44 AM: Message edited by: Jane Craig ]

[RoyMcAvoy]

Because of the recent push to get more new homeowners in the United States, as well as some of the lenders with relaxed rules for what they'll lend, the meltdown will come...and it won't be pretty, unless you're buying and have some cash to bring.

In 10 years, cash will be king in the real estate market. Money has been too cheap in recent years. Those who can put 20% down will find far better prices and much better interest rates.

Not everyone is cut to be a homeowner. This isn't being snotty, it's just the reality.

Being a good homeowner encompasses constant work, from the obvious stuff around the house (painting/siding/fixing the gutters) to making sure the sidewalk is shoveled 24 hours after each new snowfall. On the inside, applicanes break down. You can also wiped out by a hurricane in Florida, a tornado in Kansas or an earthquake in Upanddown's city.

If this new wave of first-time homeowners are, for the most part, responsible people, then they'll do fine. But if people bought with dreams of flipping houses, especially in newer housing, so many have bought at high prices that those houses could sit on the market for years until a profit is realized.

I would also say that a thick slice of the people who "aren't fit for home ownership" also paid premium prices with dreams of flipping in their eyes.

We were very lucky to buy when we did in '01 and when we sold in '05, the money came out where we essentially paid $0 to live there for three-plus years.

I don't expect anywhere near the same return off the house we bought in '05. I'd be happy if it goes up $5,000 a year. Different climate.

In our somewhat transient business, when you move every two or three years (and, in 80% of the cases, switch companies to work for) until you get to that Destination Market, real estate is a crapshoot. Can be profitable, just maybe not right now.

Stories about flipping real estate were played up over the last five years. It's a sexy story, people who bought for $130,000 and sold for $250,000 three years later.

No one does a story about, say, a school teacher who stays in the same house for 30 years, pays it off, but because of the cost of gas, her house near the city has skyrocketed from $20,000 in 1974 to $350,000, allowing her a major nestegg for retirement. Flipping is sexier but much more risky, especially in this climate.

[s'news]

My home has appreciated at least 67 percent since I bought it ten years ago.

It's in a good location. The land is worth more than the house is worth.

[Bureau Chief]

Gees guys lets cool off a little. I got a curve to thru in here. There is a little town in central Kansas that Im planning on retiring to in a very few years. I went out there last june to look at a nice, well cared for 3 bedroom brick house on a large fenced lot, 2 car garage and a new roof. They were asking ...get this....$22,000 for it, and it didnt sell at that price. It finally went for $19700!!!!!!!!!!! I nearly wrote a check for when I looked at it but had nobody to look after it for me until retirement so I didnt. Should have but didnt. What other in town location could you get a nice house for $22000??????? And a nice town to boot! And there aint a tv station within 70 miles! At that point in my life I dont even want to look at a tv much less work in it.

[PAwxman]

Originally posted by TVMattNYC:
</font><blockquote>quote:</font><hr />Originally posted by Marty McFly:
[Let's see... 212 markets... covering all of the United States.
I'm going to go out on a limb here and say that there are THOUSANDS of homes for sale in AMERICA that are around the 100k mark.

So there's your answer Rainbow! In EVERY MARKET!
graemlins/bs.gif Not in NYC.

Not in LA.

Not in Chicago.

Not in San Francisco.

Not in Boston.

Not in Philly.

Not even in Pittsburgh.

Nice try.[/QB]</font>[/QUOTE]Totally out of touch with Pittsburgh. The median house price in the city itself is way less than $100k. It's outside the city that costs more.

[TVMattNYC]

Originally posted by PAwxman:
</font><blockquote>quote:</font><hr />Originally posted by TVMattNYC:
</font><blockquote>quote:</font><hr />Originally posted by Marty McFly:
[Let's see... 212 markets... covering all of the United States.
I'm going to go out on a limb here and say that there are THOUSANDS of homes for sale in AMERICA that are around the 100k mark.

So there's your answer Rainbow! In EVERY MARKET!
graemlins/bs.gif Not in NYC.

Not in LA.

Not in Chicago.

Not in San Francisco.

Not in Boston.

Not in Philly.

Not even in Pittsburgh.

Nice try.</font>[/QUOTE]Totally out of touch with Pittsburgh. The median house price in the city itself is way less than $100k. It's outside the city that costs more.[/QB]</font>[/QUOTE]Not at all out of touch with Pittsburgh.

Anything less than $100K is a crack house.

Get real.

[Marty McFly]

Not at all out of touch with Pittsburgh.

Anything less than $100K is a crack house.

Get real.
Yeah Matt, maybe IN Pittsburgh. But you said that one can't find a house for 100k in the Pittsburgh MARKET!

And you are wrong.

Now why don't you go back to sleep so you can continue dreaming that you know every last thing about the price of homes in every market in America.

[aphia]

Originally posted by Marty McFly:
</font><blockquote>quote:</font><hr />Originally posted by foxravens:
A 15 year mortgage and the monthly note should not exceed a week's pay?
Do you live in a fantasy world?Yes I do. In my fantasy world I am not consumed by debt or credit cards or monthly payments.

I save and spend wisely.

It's an excellent fantasy world.

??
Marty I have to admit that sounds like a big stretch.....

I think most lenders and people in the real estate business say a home mortgage should be about 1/3 of your monthly salary. Thats generally if you do 20 year at arround 6 percent. -- Cant really imagine most people being able to afford 15 year loan without making 1500 - 2000 dollar payments.

Under your budgeting, that would require an anual salary of about 100k.

GET ON BOARD! YOU CAN DO IT TOO! (http://www.daveramsey.com)</font>[/QUOTE]

[Jane Craig]

One thing I found useful was using any little "extra" money to add a bit to payment and earmark it to pay down principal. You build equity faster, and that pays off when you buy the next place, and so on...

[TVMattNYC]

Originally posted by Marty McFly:
</font><blockquote>quote:</font><hr /> Not at all out of touch with Pittsburgh.

Anything less than $100K is a crack house.

Get real.
Yeah Matt, maybe IN Pittsburgh. But you said that one can't find a house for 100k in the Pittsburgh MARKET!

And you are wrong.

Now why don't you go back to sleep so you can continue dreaming that you know every last thing about the price of homes in every market in America.</font>[/QUOTE]Well, let's see ... having GROWN UP and having FAMILY TIES in the PITTSBURGH MARKET does, in fact, give me an edge on this topic.

And I know for a FACT that any home costing under $100K *in that market* puts you a good 50 miles from the nearest television station (where people on this board would presumably work). Or in a crack house. Or in a trailer. Your choice.

[s'news]

Originally posted by Jane Craig:
One thing I found useful was using any little "extra" money to add a bit to payment and earmark it to pay down principal. You build equity faster, and that pays off when you buy the next place, and so on...Good point, Jane. We add extra most months, to roughly equal an extra month each year.

[Ralphie the buffalo]

Originally posted by Marty McFly:
But you said that one can't find a house for 100k in the Pittsburgh MARKET!

And you are wrong.And this is a house YOU would want to live in?
Your would want your adult daughter to live in?
Dave Ramsey would want his family members to live in?

I you answered, "No," to any of these questions please shut your self-rightous pie-hole.

[Marty McFly]

Okay, to appease the naysayers and the gay real estate mogul who knows the entire American housing market and the minimum prices of every single house in the USA, I've changed the home buying TIPS I took directly from Dave Ramsey. I guess I must be the ONLY person in TV who those tips worked for.

Thanks Dave. I'll be free of a house payment before age 45.

Ok, here and the revised home buying tips!

Buy a house you deserve and price be damned! You've worked your tail off for so many years, you DESERVE a big house in a really nice neighborhood! It's time to quit making your landlord rich and start making the banks bigger!

Follow these steps to instant gratification!

1. Find a house that you deserve that's also for sale!
2. Put an offer on the house and ADD an extra 15%! This way if someone else is looking at your future house and makes an offer, they won't get it because you're offering MORE THAN THE SELLER'S ASKING PRICE! Afterall, you DESERVE *THIS* HOUSE!

And you deserve it NOW!

3. Do NOT put any money down! After all, money saved is money NOT SPENT. And the house you deserve is naked without the JetSkis in the garage. I mean, really... what would you rather do with a wad of cash? Use it as a down payment on a house to save 52 bucks a month or buy a nice 93 inch HD TV?

4. Get a 30 year mortgage. If the bank offers a 45 or 60 year mortgage, DIVE RIGHT IN! Head first, too! The bank is helping you get the house you deserve NOW! With a 45 year mortgage, the payments will be next to nothing! And think of all the money you'll be saving with smaller monthly payments!

Sound like a plan?

[alamodesk]

Marty,

Dave's plan works! I have not purchased a house yet, but am saving the money for the down payment now. I have no other debt except my car which will be paid off soon. I have my $1000 in the bank, paid off several cards, and can't wait to yell "I'm debt free!!!" when the car is paid off. And I'm getting married in a few months. She has no debt so we'll start off on the right foot!

By the way, in my market you can get a nice house for $100 grand, and it's a major market, San Antonio. We're looking for a small ranch (15-30 acres) in the 150-175 price range. Glad I don't live in San Fran, NYC or Chicago.

You guys should listen to Dave and learn it before bashing it. HIS PLAN WORKS!

[Spike]

Originally posted by alamodesk:
... and it's a major market, San Antonio.You're funny.

[TVMattNYC]

Originally posted by alamodesk:
Marty,

Dave's plan works! I have not purchased a house yet, but am saving the money for the down payment now. I have no other debt except my car which will be paid off soon. I have my $1000 in the bank, paid off several cards, and can't wait to yell "I'm debt free!!!" when the car is paid off. And I'm getting married in a few months. She has no debt so we'll start off on the right foot!

By the way, in my market you can get a nice house for $100 grand, and it's a major market, San Antonio. We're looking for a small ranch (15-30 acres) in the 150-175 price range. Glad I don't live in San Fran, NYC or Chicago.

You guys should listen to Dave and learn it before bashing it. HIS PLAN WORKS!I'm sure Dave's plan can work for many people.

Unfortunately, not in a market like NYC where $100K is barely enough for a DOWN PAYMENT on a modest apartment.

$1000 in the bank? In this market you'd be laughed out of the real estate agent's office.

[Marty McFly]

Yeah Matt... Dave's plan just can't work in NYC.

:rolleyes:

[alamodesk]

What's funny is that I listen to people from NYC, Chicago, Miami, etc. who have followed Dave's plan making 50-60 grand and it worked for them, even in those cities. And if you don't like how much your making, get out, start your own business.. or deliver pizza's for extra money to afford a bigger, more expensive house.

Oh well, you guys laugh all you want but Marty and I will be millionaires in a few years while you guys continue to pay credit card bills and live in homes you can't afford smile.gif

[DoneThatToo]

This entire thread is longer then most contracts I have signed to buy a house!

[TVMattNYC]

Originally posted by alamodesk:
What's funny is that I listen to people from NYC, Chicago, Miami, etc. who have followed Dave's plan making 50-60 grand and it worked for them, even in those cities. Who are these people? I'd love to hear from them myself.

Show me a "testimonial" from someone making 50-60K in NYC who followed "Dave's plan" and was able to BUY a home in Manhattan and I'll show you a paid actor who's only following a script.

[alamodesk]

I never said specifically Manhattan. I don't know much about NYC, but I'm sure Manhattan is a more exclusive part of town.

[TVMattNYC]

Originally posted by alamodesk:
I never said specifically Manhattan. I don't know much about NYC, but I'm sure Manhattan is a more exclusive part of town.Manhattan *IS* New York City.

[Spike]

Originally posted by TVMattNYC:
Manhattan *IS* New York City.So are Brooklyn, Queens, Staten Island and The Bronx.

[Desert Rat]

This entire thread is longer then most contracts I have signed to buy a house!

Imagine though if you had to initial every post at the bottom... :D

[Ralphie the buffalo]

Originally posted by alamodesk:
I never said specifically Manhattan. I don't know much about NYC, but I'm sure Manhattan is a more exclusive part of town.LMAO

You really need to get out a little bit more. Pick up an atlas. Watch something on tv besides sitcoms.

And you and Marty don't need to "evangalize" us with the true gospel according to Dave Ramsey. The guy has good advice, but some of it isn't workable for everyone.

That is the problem with "true believers". They cannot seperate the wheat from the chaff. They swallow the whole message without question. Anyone who raises objections is attacked as an infidel.

Sounds like a cult to me.

[TVMattNYC]

Originally posted by Spike:
</font><blockquote>quote:</font><hr />Originally posted by TVMattNYC:
Manhattan *IS* New York City.So are Brooklyn, Queens, Staten Island and The Bronx.</font>[/QUOTE]And in NONE of those boroughs can you find a domicile in the 100K range ... presumably what someone making $50K would be able to afford, under "Dave's plan".

[Marty McFly]

Well, why you two love birds are busy claiming that Dave Ramsey's home buying tips are unworkable 'for the common man' and in the great city of New York, I'll be adding an extra $200 this month (on top of the extra I'm already paying every month) to the principle of my mortgage payment.

That's $100 for the each of you and in your honor.

In fact... I may do this every month! You two knuckleheads have inspired me to cut my mortgage from 15 to 10 years... and I'll bet I can do it in 8!

I'm also willing to wager that Dave Ramsey has a big audience in NYC. And that many follow it! Just because you don't, can't or won't Matt, doesn't mean others follow aren't. graemlins/eusa_whistle.gif

[Marty McFly]

You really need to get out a little bit more. Pick up an atlas. Watch something on tv besides sitcoms. Yeah, if you don't know everything about NYC, you're one of the few and definitely not in the 'IN' crowd. Please note the sarcasm.

And you and Marty don't need to "evangalize" us with the true gospel according to Dave Ramsey. The guy has good advice, but some of it isn't workable for everyone. It's workable to those who are committed to making it work. Even poor, common folks like myself.

That is the problem with "true believers". They cannot seperate the wheat from the chaff. They swallow the whole message without question. Anyone who raises objections is attacked as an infidel.

Sounds like a cult to me. Funny you mention that. Dave always mentions what 'normal' is. 'Normal' today is a house payment (30 years), one or two car payments, credit car payments, a student loan debt and a few other debts.

So I'm not normal. Far from it.

In this 'cult', people save and don't spend every dime they make. They don't rack up tons of debt or live paycheck to paycheck. They're ready for a rainy day because they know it's coming.

Sounds pretty scary, huh?

[SamG]

I listen to Ramsey and would love to live by his plan... but at this point in my life, it won't work for us. We have our house payment, one car (used) payment, and some credit card debt (nothing near what I've heard on his show).

All our extra money (OT, freelance, etc) goes to pay down the cc debt. And you know what, if it was just me, my wife & kids, we'd do fine. BUT, we support my father-in-law. We buy his medicine's for him. And while the new Medicare part D has been wonderful for the last three months, I'm waiting to fall into the "donut hole" next month and go back to paying more than $500/month for his meds.

"So get a 2nd job" you might say. Two things factor into that... a) time away from family and b) finding another job that can work with the screwy hours a TV job enforces.

While Dave's plan might work for MOST, it won't work for ALL, so don't act like it will.

[Marty McFly]

http://www.lancemiller.org/images/crybaby.jpeg

Wah....

Saving money and paying off debt doesn't work for everyone?

Well, you're right, actually. There are some people who are just 'doomed' to have debt the rest of their life and there's nothing they can do about it because life just gave them a bad hand.

Those people are called FOOLS.

It's amazing to me that you can hear a success story of someone who had it worse than you and they manage to come through... but there's a million reasons why you CAN'T.

I think that's what Larry Elder calls a 'victicrat'.

[TVMattNYC]

Originally posted by Marty McFly:
I'm also willing to wager that Dave Ramsey has a big audience in NYC. And that many follow it! Just because you don't, can't or won't Matt, doesn't mean others follow aren't. graemlins/eusa_whistle.gif Don't bother ... you'll lose the bet.

But you're too busy drinking the Kool-Aid to know that.

[TVMattNYC]

Originally posted by Marty McFly:
It's amazing to me that you can hear a success story of someone who had it worse than you and they manage to come through... but there's a million reasons why you CAN'T.

I think that's what Larry Elder calls a 'victicrat'.It's amazing to ME that you obviously have your head so far up this Dave guy's a$$ that you can no longer even entertain reasoned and objective arguments *against* his mantra.

I think that's what psychologists call a "cult victim".

[Marty McFly]

If my head being up his a$$ equates to having no debt & having my house paid for well before I'm 50... then I'm enjoying the view.

Dang Matt... I'm shooting a wedding tomorrow. I'll think I'll put every dime from that towards my new 'Matt says it can't be done fund' and roll it over into extra mortgage payments! graemlins/icon_pidu.gif

[southwesternguy]

I have always wished that I could come up with a plan like this "Dave" character. There are just so many people like alamodesk and Marty McFly willing to line and buy the whole deal hook, line, and sinker.

I'm not saying that their "plan" doesn't or won't work, it's just that they sound like people who've joined a cult. It's like they're lost souls who've found all the answers all of a sudden. It has always surprised me how many people like that there are in this country.

It's like you tell some poor schlep making 35k a year that he's going to easily become a millionaire by following some "plan", and you've got em.

I am going to get to work instantly and try to invent something like the "bun and thigh trainer", or some food chopping gizmo, and put in on TV at 3 in the morning and hopefully sell 5 million units. Or better yet, I'm going to tell a bunch of people with limited talents that they can place ads in the paper, or buy and sell real estate with "no money down", and in a year you'll be a millionaire, and I bet I can make a lot of money.

Every time I some some slickster with a silly Ponzi scheme or something like that on TV, I say to myself, "why couldn't I think of that?" Then I remember it's called morality, and I'd just feel bad stealing peoples' money anyway, so it's better that I don't come up with these ideas.

Good luck to the legions who follow "Dave's plan". You'll need it.

[Marty McFly]

It's like you tell some poor schlep making 35k a year that he's going to easily become a millionaire by following some "plan", and you've got em. HA! That sounds just like me! Amazing what can happen when you invest your money rather than spend it all. Man... the power of compound interest! Imagine a 'wacky plan' of investing your $! Crazy!

Good luck to the legions who follow "Dave's plan". You'll need it. Don't worry... we'll be just fine. But thanks for your concern!

Others are doing great, by the way... (http://www.daveramsey.com/etc/tell_your_story/index.cfm?FuseAction=dspCat&intCatID=115)

[ April 28, 2006, 09:48 AM: Message edited by: Marty McFly ]

[Ralphie the buffalo]

We are so happy hear about you success with the Dave Ramsey plan, McFly. Really, we are.

I was doing most of what Ramsey advocated before I even heard of the guy. So it isn't like an epiphany to me. They were hard lessons learned with some time behind the wheel.

So my family has quietly survived:

- my wife being out of work for 3 years
- both of us having a major surgery
- helping a child through college
- doing extensive home renovations
- blah
- blah
- blah
- ad nauseum

All this on ONE income, still putting a good sized chunk into a 401K and IRA's and racking up minimal credit card debt.

And I did all that using my own common sense and not following a financial prophet.

Good for me. I don't suck (much) at money management. Before getting too self-rightous I better watch the road ahead. I feel another big curve coming on.

I suggest that you do the same McFly instead of backseat driving everyone else's life.

[ April 28, 2006, 10:19 AM: Message edited by: Ralphie the buffalo ]

[Marty McFly]

Ralphie, encouraging others to follow a financial plan so they aren't racking up debt and sending their hard earned income off to the bank every month is NOT backseat driving anyone's life.

Nor is it a matter of being self righteous.
It's a matter of spreading the word about something I believe works... and works for many, many others.

If I felt as strong about a movie, I'd encourage others to see it. Get it?

Ramsey sells many things... but 99% of his advice comes FREE OF CHARGE through the radio.

MILLIONS of people are in debt or get in over their head with credit cards, bills and even their homes. So rather than telling the original poster to dive in head first about buying a house, I recommended a plan that works for those who apply it.

Like myself.

And then the likes of you (someone who has credit card debt and a lazy wife) and Matt (who can't envision anything outside of NYC) do nothing but belittle and bash the suggestions. You take it as someone trying dictate how people should live their lives instead of a suggestion.

But hey... as long as it makes you feel better!

[SamG]

Marty, don't you get it, change "save & invest" for "put Jesus in your life" and BAM! you're an evangelical Christian.

I'm not discounting what Ramsey says, and I am also glad it works out for you. But at this time in my life, it's more important for me to spend time with my family than it is to take that 2nd job.

Sure, I take the 2nd job now and in 2 years? 5? 10? I'm "debt free". But how many soccer games, school programs, and playing in the backyard have I already missed? You feel being debt free is more important than being with your family, fine. You do what you want. Just respect me that I put a priority on things OTHER than $$.

My point is Ramsey's plan just isn't for everybody.

[Desert Rat]

What we are doing is making an extra housepayment every year toward the principle.

Should have the house paid off in 23 years.

My wife and I are lucky enough to be in the position to put aside 2100/month toward retirement....that includes 2 401K's, two Roth's, our savings account, and three mutual funds and a life insurance policy, which we invest into.

When we retire, 80-90% of our income will be tax free...also our plan doesn't include counting on Social Security...so if it still exists, it's just extra money.

Also, control your spending..we enjoy life, just careful about debt is all....other than the house and one credit card, which is reasonable, we have no other debt.

I just wish we would have started 10 years earlier.

See a good financial planner and follow his/hers advice.

[ April 28, 2006, 02:46 PM: Message edited by: Desert Rat ]

[SamG]

Rat, that's great for you, but if I'm doing my math right... based on you puttin $2100/MONTH into retirement...

if that's 10% of your salary, you're making $250K+/year
20% of your salary that's $175K/year
30% = $84K/year.

If you've can sock away 30% of your salary to retirement... :eek: WOW! Great job.

For those of us who can't do that...

[Desert Rat]

Sam,

We also don't have any children, which is a choice we both decided together.

That helps greatly toward being able to sock a lot away for the future.

Also my wife makes a very good salary at her career.

More importantly, we just don't believe in the keeping up with the jones's mentality.

For example, I own a 2001 Honda Civic, she owns a 2002 Kia.

Also we aren't "house poor" either.

The 2100/month includes the money we put into our regular savings account each month.

We sold our house last September when the market was red hot.

We didn't go hog wild in buying a new house....not being house poor.

What we did do with the money that we made off the sale, which was pretty substansive was pay off EVERY debt we did have, sock a good deal of money in our investments and got a few toys.

Best thing we ever did.....all my wifes idea too, selling the house, that is....god bless her.

What I DO want is to be able to not freak out financially if I lose my television gig and have to change careers (I'm 46, so wouldn't be that easy)...or if my wife wanted to change her career.

I realize I could be zapped at any time...

In that aspect, we are getting a lot closer to where that is a possiblity.

I do realize how extremly blessed we both are as well.

The best move I made was getting into our 401K plan, and maxing it out as soon as I qualified to join.

That was 19 years ago..... smile.gif

It was a big hit at first and tough, but now...well... smile.gif smile.gif smile.gif

[ April 28, 2006, 03:42 PM: Message edited by: Desert Rat ]

[noodleman]

At this moment, there are 152 properties available in the city of St. Paul that cost between $100-$150k. Yes, some might not be located in the "best" neighborhoods, and we certainly aren't talking 3000 sq. ft. castles. But, yes, it is possible to buy a $150k home in the 14th largest TV market, and, yes, one can do it on a salary of $75k. In fact, we bought our $159k house in 2001 on a combined salary of $70k. The home is in a very nice neighborbood of 60's era homes just east of downtown St. Paul, with convenient freeway access and plenty of shopping within walking or biking distance. With refinancing, the mortgage (incl. property taxes and insurance) is under $1000 per month. Our original mortgage was set at 6.625% (higher than the current average); even then, the monthly PITI payment was $1100, $250 more than our rent at the time. Between 2001 and 2005, the value of house has increased from $159k to approximately $200k.

It takes my wife 10 minutes to drive to work downtown on city streets; it takes me 20 minutes to drive to work via the freeway.

[Judge]

Originally posted by Desert Rat:
Sam,

We also don't have any children, which is a choice we both decided together.

That helps greatly toward being able to sock a lot away for the future.

Also my wife makes a very good salary at her career.

More importantly, we just don't believe in the keeping up with the jones's mentality.

For example, I own a 2001 Honda Civic, she owns a 2002 Kia.

Also we aren't "house poor" either.

The 2100/month includes the money we put into our regular savings account each month.

We sold our house last September when the market was red hot.

We didn't go hog wild in buying a new house....not being house poor.

What we did do with the money that we made off the sale, which was pretty substansive was pay off EVERY debt we did have, sock a good deal of money in our investments and got a few toys.

Best thing we ever did.....all my wifes idea too, selling the house, that is....god bless her.

What I DO want is to be able to not freak out financially if I lose my television gig and have to change careers (I'm 46, so wouldn't be that easy)...or if my wife wanted to change her career.

I realize I could be zapped at any time...

In that aspect, we are getting a lot closer to where that is a possiblity.

I do realize how extremly blessed we both are as well.

The best move I made was getting into our 401K plan, and maxing it out as soon as I qualified to join.

That was 19 years ago..... smile.gif

It was a big hit at first and tough, but now...well... smile.gif smile.gif smile.gif Oh, the days of being DINKs... money, money everywhere...not that I'd trade the kiddos for the world, but in financial-speak, 401k has such a better ring to it than 529!

[Allegheny Co.]

DORMONT $99,999
3263 Piedmont Av MLS-592980
Residential
Bedrooms:4 Baths: 2 Full


This Two-story Colonial home is like grandma's and features large rooms. The living room is 22 x 12: dining room is 14 x 13: kitchen 18 x 11. Bedrooms are large also. Two bedrooms are 13 x 12, another 12 x 11 and the third, good for an office is 11 x 9. A pull down is for the attic. A covered front porch is great for gatherings. A gazabo, hot water tub and water fall are featured in the fenced back yard. A furnace was installed in 2005 and electric in 1999. Call to preview.

Listing Agent:
Barbara Kurdys-Miller - Conroy / Kurdys Miller Team
--------------------------------------------------------------------------------


Property Details

Rooms
Living Room - Main Level - 22x12
Dining Room - Main Level - 14x13
Kitchen - Main Level - 18x11
Den - Upper Level - 4thBR
Entry - Main Level -

Bedrooms
Master Bedroom - Upper Level - 13x12
Bedroom 2 - Upper Level - 12x11
Bedroom 3 - Upper Level - 13x12
Bedroom 4 - Upper Level - 11x9

Bathrooms
Full - 2
Half - 0
Amenities
Disposal
Hot tub
Microwave Oven
WD
WT
Wall to Wall Carpet
Refrigerator
Dish Washer
Gas Stove

Heating
Gas

Cooling
Window Air Conditioner

Utilities
Sewer - Public
Water - Public

Parking
Detached Garage
Spaces - 2

Roofing
Other type
Estimated annual taxes: $2,307

School District: Keystone Oaks
Approximate lot is 110x30m/l

Listing courtesy of PRUDENTIAL PREFERRED REALTY

Matt-- I guess you don't think that DORMONT isn't part of the Pgh Metro Market. Here's a good example of the housing available OUTSIDE of the city of Pittsburgh(but with good surface transportation--ie. the "T").

As you know--ALOT of people live in the South Hills (especially those at KDKA). The people at 11 tend to live in the North Hills and WTAE has people in the East Suburbs.

[Sales Guy]

Originally posted by Desert Rat:
Sam,

We also don't have any children, which is a choice we both decided together.

That helps greatly toward being able to sock a lot away for the future.

Also my wife makes a very good salary at her career.

More importantly, we just don't believe in the keeping up with the jones's mentality.

For example, I own a 2001 Honda Civic, she owns a 2002 Kia.

Also we aren't "house poor" either.

career.

The best move I made was getting into our 401K plan, and maxing it out as soon as I qualified to join.

That was 19 years ago..... smile.gif

It was a big hit at first and tough, but now...well... smile.gif smile.gif smile.gif Jesus, what do you do for fun? You have no children so if you die who gets all your hard earned savings? I would rather be in debt somewhat and live it up oonce in a while.

A townhouse complex with a pool and lansdcaping taken care suits we bachelors just fine.

[Marty McFly]

You have no children so if you die who gets all your hard earned savings? I would rather be in debt somewhat and live it up oonce in a while. Yeah, that's really looking out for your kids, isn't it? Leave THEM your debt! Screw THEM over!

And who says the guy isn't living it up now and then?!

[Sales Guy]

Originally posted by Marty McFly:
</font><blockquote>quote:</font><hr /> You have no children so if you die who gets all your hard earned savings? I would rather be in debt somewhat and live it up oonce in a while. Yeah, that's really looking out for your kids, isn't it? Leave THEM your debt! Screw THEM over!

And who says the guy isn't living it up now and then?!</font>[/QUOTE]I don't have kids. edited removing profanity.

[ April 29, 2006, 01:31 PM: Message edited by: Sales Guy ]

[Marty McFly]

Oh... so it's okay to rack up a ton of debt and then die... screwing over the business that sold you something on the promise to pay for it?

You sound like a real classy guy.

[Desert Rat]

Sales,

Just got back from Orlando where we spent Easter Week....going to New England for a week in September.

Going on a cruise to either the Western or Eastern Carribean in Mid-December..

Go to Vegas at least 3-4 times a year..

Went to Maryland's Eastern Shore in early March..

We get out and do things.. smile.gif

Sales, the main thing is that I'm very happy with my life...that's all that counts.

[ April 29, 2006, 03:31 PM: Message edited by: Desert Rat ]

[TVMattNYC]

Originally posted by Allegheny Co.:
DORMONT $99,999
3263 Piedmont Av MLS-592980
Residential
Bedrooms:4 Baths: 2 Full

Hmm.

Doesn't say whether bullet-proof vests are included in the listing price ....

[Allegheny Co.]

Maybe if you had actually LIVED someplace other than Shadyside, Oakland, Squirrel Hill and come out to the suburbs--you wouldn't be so prejudiced. I lived in a community that borders Dormont---VERY little crime (mainly DUI type things). Dormont MAY have some bad areas--but I happen to know this particular neighborhood. A friend (white female) just moved into a nearby street into a home of this same age.

Do your relatives live in a gated community? Hell--even USC has problems.

[ April 29, 2006, 05:04 PM: Message edited by: Allegheny Co. ]

[Ralphie the buffalo]

Originally posted by Marty McFly:
Nor is it a matter of being self righteous.
It's a matter of spreading the word about something I believe works... and works for many, many others.

You take it as someone trying dictate how people should live their lives instead of a suggestion.
We should all be happy that McFly is taking his valuable personal time to guide us. Think of him as a shepard SUGGESTING his flock move to the greener pastures this life has to offer.

Here is a SUGGESTION for you McFly:

Read Robert Ringer's "Looking Out For #1" or "To Be or Not to Be Intimidated?". He wrote a lot about people just like you. But, I don't think you would recognize yourself in the mirror.

And since you are sooooooo helpful in giving us helpful links: http://www.robertringer.com/books.php

[ April 30, 2006, 07:46 PM: Message edited by: Ralphie the buffalo ]

[Marty McFly]

Self-righteous McFly here... Getting crazy and offering a suggestion on buying a house in a thread asking for a suggestion in... (drum roll please)... buying a house! Go figure!

Oops, I repeated home buying tips from Dave Ramsey... who is obviously as popular with Ralphie as George Bush on Medialine!

It's May 1st and the mortgage payment is due. On top of the extra $100 a month I add to the principle every month (how stupid is that?!), I'm adding an EXTRA $200 on top of it. That would be an extra THREE HUNDRED dollars to the principle.

That's crazy! :eek:

$100 is in honor of real estate mogul TVMatt, who knows the housing market across America and the other $100 is in honor of Ralphie, who thinks anyone with a plan to have zero debt is self righteous if that plan comes from Dave Ramsey.

In TEN years (God willing), let's revisit this thread and see where I am. Let's see who has their house paid off, has NO DEBT, their retirement funded & a college fund for kids who don't even exist yet.

Then we can ask others if they are even the slightest bit interested in how it was pulled it off.

'Self-righteous' McFly signing off... I have to go work on paying off the house sooner!