Comments on: Real Homes of Genius: Today we Salute You East Los Angeles. $395,000 for 780 Square Feet.

By: mrslovelly

mrslovelly — Tue, 05 Jun 2007 04:37:00 +0000

Dr. HB,
You asked your readers what it would take to get them into a home in Ca. My question is what is it gonna take for sellers to get real about asking prices?

By: starve the beast

starve the beast — Mon, 04 Jun 2007 20:53:00 +0000

I will buy a house when I find one that (A) I’d be willing to live in and (B) I can reasonably afford. The market will determine if this ever happens.

By: Anonymous

Anonymous — Fri, 01 Jun 2007 21:36:00 +0000

Turdly,

This is anon 12:11 (I can see I’m going to be a regualr poster, so should create an account, but for now…).

Your advise makes sense. I did in fact buy a condo in the Bay Area in 02…and then promptly got laid off right as the dt.com collapse was happening. 6 months later, after not being able to find a job in the Bay Area, I got one in So Cal, and had to move on. I ended up selling as folks were still eager to buy and I’d noticed the rental market had gone to hell (no more dot-commers to fill vacancies). Since them I’ve remained liquid, investing as much as I can, and doing just fine. I’ve finally shaken the image that I’m less of a person just because I don’t own property. I live in LA and have a 10 minute commute. That’s worth a lot!!

By: turdly

turdly — Fri, 01 Jun 2007 20:50:00 +0000

$500,000CD at 5%apr is a savings account that makes $2500 per month, forever. You can own a $500k home free and clear for the LOSS of this $2500 per month, and add another $1000 per month in taxes and upkeep, or you can rent the same house for $1500 and have beautifull liquidity. Even free and clear, renting puts you $2500 ahead per month. I’m living the prior, take my word for it, the American Dream is quite costly right now. I don’t care enough about exact numbers to make it fit, but I can tell you everytime I look at the guest house I twitch. It costs me $1600 per month to own it free and clear. But, I love it and won’t get rid of it. I could be on heroin cheaper!

By: turdly

turdly — Fri, 01 Jun 2007 20:21:00 +0000

To anon 12;11

I own two houses side by side, free and clear. One is my home, the other we use as a guest house and for parties. The debt is still higher than rent. Taxes, insurance maintenance, come to 3.5% per year.
The money I COULD have in the bank if I didn't own the houses comes to $2100 per month added to that 3.5% overhead adds another $1200 per month. Total to own my two homes free and clear; almost $3300 to own them free and clear. Even for me, renting is a better deal. If cd rates hit 10%, I'm even more screwed.

Keep the money in the bank and travel until you find somewhere you just can't leave. The key is to not spend the savings. Even when you have the million in the bank, drive a used car, be modest, enjoy the travel and comfort that a 2% debt ratio can bring you.