San Diego Housing Market News and Analysis
looking for advice 2
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Submitted by manu on February 18, 2011 - 11:12am
Even though last time I posted I got a lot of bitter responses (and sure I will be getting some more this time)I still feel the need to see what you guys think about my new situation as I think there are a lot of smart people on this site
Please refer to my first and last post from 2007
Anyways, this is what happened since then:
we were able to sell the money pit for 1270000 in January 2010 (160000 above appraisal).
Even though we might have lost some money, we definitely gained a lot in peace of mind, our marriage has been doing much better since we don`t get all those headaches anymore and would say it was worth it.
We have been renting in the same neighborhood for a little over a year.
It has been like vacationing at a resort and we have been enjoying the carefree lifestyle and adapted pretty well to the downsizing.
In the meanwhile I have been following the market waiting for the right time to jump back in.
We got so comfortable renting we don`t see any immediate need of moving but....
The rental I am currently living in just went on the market about a month ago. Our lease was up and we found out that the owner wanted to sell it...we considered buying ourselves (currently listed for 539000) but I think it is sooo overpriced is not even funny.
So for the time being we are renting month to month and we were able to get a screaming deal: we only pay 1/2 rent for the inconvenience of having the place available for showings.
In over a month we only had 5 showings by the way.
So here we are having to move into another rental or having to buy something in the imminent future.
In the meanwhile the market got flooded with similar units in the same development.
There are currently 5 on the market ranging between 485000 to 545000 (with alot more in different stages of foreclosure still not hitting the mls).
My husband and I went to see one of them (same floorplan we are living in, REO, for 489500...no offers so far and already price reduced once).
We have talked to the REO agent about putting an offer for 405000 and see what happens...he doubts we`ll get it but he thinks we might get a counter at least.
The particular unit sold beginning 2003 for 410000 and need about 40000 to bring it to par with our rental which is more upgraded.
Although these units are not my dream house I can definitely see us leaving in one of them for few more years without having to move to other rentals or feeling pressured to buy a house just because we need a place to live.
If we can get it for close to 400000, we can still move out and be able to rent it out down the road for even money or a couple of hundred dollars cash flow per month (would not call it investment).
Also in the meanwhile we can get tax reduction and pay down the loan fast before we convert it into a rental down the road (we currently have income well over 400000 and ZERO tax deductions)
Also if the property keeps going down in price we are still saving about 30000 a year or so in rent.
So, what shall we do?
Ultimately I would like a 2000-3000 sq feet home on half a acre in this same neighborhood...there are few for sale but nothing worth considering...they were all built in the 60s and I know (given my last money pit)that they would take hundreds of thousand of dollars to fix up...the cheapest ones are currently in the 500000 but no view and septic tank....I`ll pass on those.
Well, thanks for reading (if you made it this far).
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