Paying off Mello Roos

User Forum Topic
Submitted by paranoid on February 27, 2012 - 7:39pm

Interest rate is historic low now. MR in places like 4S ranch has a 40-year life, and has a rate close to 10% (my rough guestimate). MR can be increased by 2% every year. So my question is: is it worth it to pay off completely your MR now? This saves alot of money if you intend to stay for a long time. What do you guys think?

Submitted by bearishgurl on September 19, 2013 - 4:53pm.

earlyretirement wrote:
...Sure, there are other places you can buy 1/2 to 1 acre lots but again the true reality is most buyers don't want nor need that kind of space...

ER, that's just it. That's reflective of who you have been talking to. Buyers in the $1M+ category who buy in your area "don't want nor need that kind of space." That is why they spend big bucks to buy there, because they do not need space to park RVs/boats or want to keep horse(s) because they know the HOA won't allow it. They don't want to look at neighbors' vehicles, boats or corrals, either, so that is why they prefer the tightly-controlled gate-guarded HOA and are willing to pay for it.

This in no way means that those (non-HOA) properties throughout the county which are situated on 1/2 - 3 AC lots which have the same value as properties in SantaLuz are any less desirable for:

1) raising a family;
2) entertaining in;
3) having good neighbors in;
4) commuting from;
5) remodeling/upgrading;
6) retiring in;

etc.

The large-lot semi-rural property I'm using is just an example. The same could be said of $1M+ ocean view homes, beach-area homes, boat-slip homes, city-view homes, historical homes, etc, all on city lots.

Different strokes for different folks.

Submitted by bearishgurl on September 19, 2013 - 5:14pm.

earlyretirement wrote:
It just seems like sometimes you have an almost hatred for this area. Or at the very least, stern disdain for the area.

I don't know where you read that here. I posted recently that I viewed ALL the SantaLuz videos on a thread you posted and really liked it! I especially liked the elevation and the round lots with pano views.

HOWEVER, I don't like the way the city/county has allowed the developers for rest of your zip code to sandwich in 9-10 units per AC in most tracts and charge ~$600K to $1.3M? for each unit, LOL. From the aerial view, some tracts' houses/PUDS don't even appear to have enough setback to park a typical 15-16' long mid-size or full-size vehicle in the driveway (without it hanging over the sidewalk and curb).

This phenomenon isn't exclusive to 92127. Subdivisions in 91914 and 91915 are notorious for this type of ultra-crowded (what I call "listen-to-your-neighbor's-toilet-flush") construction. And just try to pass another car going the opposite direction on one of these streets after dark, when they are lined from end to end with parallel parked cars. You have to slow down to 5 mph and hope you don't bump rear-view mirrors with the oncoming vehicle!

The developers gypped many of these buyers paying Big Bucks and the Highest MR In The County out of a standard city lot and a standard setback and got away with it. Ask yourself how that happened.

But the buyers continued to swarm in, only to get ripped off in MR overpayments and in the misuse of their MR funds.

It's astounding to me.

But as you said, ER, a lot of people really don't care about all these messy, boring details. They think they have bought into a particular lifestyle and for as long as it lasts, they're going to keep on keepin' on :=0

Submitted by EconProf on September 19, 2013 - 6:46pm.

BG, you are up against many posters here who claim you are overbearing with your opinions and seem to expect other to share your values when seeking a home. They are right.
That said, you are sometimes a wealth of information, usually well-documented, and I value you for that. And I really do thank you for no longer putting quotes around everything. Now work on minimizing IMHO, CAPITALIZING FOR EMPHASIS, and :) IMHO

Submitted by EconProf on September 19, 2013 - 7:13pm.

Since early retirement and I both live in Santaluz and face Mello-Roos fees, we met up today to compare notes. It turns out the decision of whether or not to pay off the MR is not at all clear cut.
I brought my tax bill with me so we could crunch the numbers to see if it is worthwhile. I also called earlier today, the number on the tax bill to learn my cost to pay it off, and got additional information about MR.
My bill contains two MR payments, CFD#2 for $2108 per year, and expiring in 2030, and Poway Unified, CFD#4 for $904 per year. I only called the number for the first, which revealed that my cost would be "about $30,000" to pay off (exact amount would cost me $500 to find out, but would apply as a credit to the payoff). That means if the amount stayed the same for the next 17 years, I would pay a total of about $36,000.
It clearly appears I should NOT pay it off, given that I could invest that $30,000 today and have it double assuming a mere 4.2% annual ROR compounded. Of course the unknowns are 1) Will that $2108 stay the same for 17 years, and 2) Will that expiration date of 2030 stay the same.
The guy I talked to on the phone was reassuring on both counts, but I do not share his confidence. Still, changes in 1 or 2, or both, would have to be pretty major to prompt me to pay it off. And the hurdle of 4.2%, (or 5%, or 6% depending on assumed changes in 1 or 2) should be pretty easy to beat with alternative investments, or paying down my other mortgages, of which I have many.
Early retirement and I also determined that the two MR fees are based on different factors. It seems the first depends on square footage, and the Poway Unified one depends on property value. Interesting.
Anyway, I am not paying off the MR, based on this information, unless someone here can bring other evidence to bear.

Submitted by earlyretirement on September 19, 2013 - 8:58pm.

EconProf wrote:
Since early retirement and I both live in Santaluz and face Mello-Roos fees, we met up today to compare notes. It turns out the decision of whether or not to pay off the MR is not at all clear cut.
I brought my tax bill with me so we could crunch the numbers to see if it is worthwhile. I also called earlier today, the number on the tax bill to learn my cost to pay it off, and got additional information about MR.
My bill contains two MR payments, CFD#2 for $2108 per year, and expiring in 2030, and Poway Unified, CFD#4 for $904 per year. I only called the number for the first, which revealed that my cost would be "about $30,000" to pay off (exact amount would cost me $500 to find out, but would apply as a credit to the payoff). That means if the amount stayed the same for the next 17 years, I would pay a total of about $36,000.
It clearly appears I should NOT pay it off, given that I could invest that $30,000 today and have it double assuming a mere 4.2% annual ROR compounded. Of course the unknowns are 1) Will that $2108 stay the same for 17 years, and 2) Will that expiration date of 2030 stay the same.
The guy I talked to on the phone was reassuring on both counts, but I do not share his confidence. Still, changes in 1 or 2, or both, would have to be pretty major to prompt me to pay it off. And the hurdle of 4.2%, (or 5%, or 6% depending on assumed changes in 1 or 2) should be pretty easy to beat with alternative investments, or paying down my other mortgages, of which I have many.
Early retirement and I also determined that the two MR fees are based on different factors. It seems the first depends on square footage, and the Poway Unified one depends on property value. Interesting.
Anyway, I am not paying off the MR, based on this information, unless someone here can bring other evidence to bear.

EconProf,

It was great as always to catch up with you. We really need to meet up more often.

Yes, EconProf's example was a good one that it might not always make sense. It was interesting to see that his CFD #2 was about half of what I was paying. I forgot that they base the tax based on size of house rather than value for CFD #2. My house is almost double the size of his so I get hit much harder on the CFD #2. I also was fortunate that I bought pretty much at the absolute bottom and I also negotiated a great price. So my % CFD tax exposure relative to my purchase price was high compared to his.

On the CFD #4 as he mentioned, I don't think it's solely based on sq. feet because his was just a bit under what I was paying. I paid just under $1,000 IIRC a year and my house is much bigger than his. So I guess I'll have to see exactly how CFD #4 is calculated. It's like we said before...all of this is kind of murky.

I still think that one would be worthwhile to pay off but I agree with him that maybe CFD #2 is not so compelling if your house size is smaller. But still, I tend to stay on the conservative side and although I'm sure I can probably make returns higher than that, my attitude is end the tax obligation forever while it's on the table.

As well, it's a GUARANTEED rate of return. I consider myself a pretty darn good investor and done very well. But I always try to be humble in the fact that I can NEVER any year say that I know with 100% certainty that I can make X% ROI. However by me paying it off and knowing I will stay in my house I could say that.

But it was really interesting seeing my CFD #2 was almost double his.

The one thing as I mentioned today EconProf are that (a) I would NOT assume that $2,108 will stay the same the next 17 years. They have taken advantage of some of the lowest interest rates in history and they can't refinance lower so my attitude is the payments will only go up. I believe by law they can raise it a maximum of 2% a year. So I would expect them to keep raising it 2% per year until it's paid off.(b) Although I think it's not likely they would extend out CFD #2 past 2030, my philosophy is who knows?

I'll have to go back and look at my exact notes but for what it's worth, EconProf, I did recall that CFD #4 was going up the maximum % each year. So you can probably assume that rate will keep going up 2% a year until 2041 or beyond (if it gets extended). But one thing is for sure, the tax obligation will NOT end until 2041 at the earliest. And I DO think that it will keep going up 2% each year. PUSD won't leave any money on the table, IMHO.

I certainly would NOT trust the judgement or advice of the third party administrator that handles tax payments for the city. LOL. Because the longer the taxes go on the longer he has a job. ;)

As well, much of the factor to me just depends on if you know that you'll keep the property for the long-term. In my case we won't sell the property in the next 15 years and probably even after that. I tend to buy properties and hold on to them for the long term. If I don't live in them I turn them into a rental property. So that's a factor to consider as well.

Again, great seeing you again.

Submitted by EconProf on September 19, 2013 - 9:21pm.

We agree on most of this, ER. Like much in economics and finance, decisions hinge on assumptions we must make with imperfect knowledge. If the MR does go up 2% a year (which is not assured--they went down for the past two years), then my 4.2% hurdle becomes 6.2%. Since I have 6% mortgages I could pay down with this money, its a tossup.
One question that has been batted around on this thread is whether paying off the MR translates automatically into a correspondingly higher value to the property. If not, IOW if buyers are not perfectly rational, then someone could lose by paying off the MR and then moving. So I should estimate my odd of moving in the next few years and factor that in to the decision.
In general, I think that buyers are pretty rational, and plug do MR's into prices automatically. A heavy MR will lower a property's value; its absense will raise it. For a buyer to swear off MR areas entirely would not be rational, since in newer areas they are practically impossible to avoid. If one has a family with school kids, MR is the price you pay for better schools, on average.
As for the close-together, grotesquely large and expensive new houses they are putting up around Santaluz in 4S and Del Sur, I agree with BG that they are not to my taste. But you are paying for the demographics, the shopping, and the resale value, and that is what is compelling to today's buyers.

Submitted by ocrenter on September 19, 2013 - 9:41pm.

EconProf wrote:
Since early retirement and I both live in Santaluz and face Mello-Roos fees, we met up today to compare notes. It turns out the decision of whether or not to pay off the MR is not at all clear cut.
I brought my tax bill with me so we could crunch the numbers to see if it is worthwhile. I also called earlier today, the number on the tax bill to learn my cost to pay it off, and got additional information about MR.
My bill contains two MR payments, CFD#2 for $2108 per year, and expiring in 2030, and Poway Unified, CFD#4 for $904 per year. I only called the number for the first, which revealed that my cost would be "about $30,000" to pay off (exact amount would cost me $500 to find out, but would apply as a credit to the payoff). That means if the amount stayed the same for the next 17 years, I would pay a total of about $36,000.
It clearly appears I should NOT pay it off, given that I could invest that $30,000 today and have it double assuming a mere 4.2% annual ROR compounded. Of course the unknowns are 1) Will that $2108 stay the same for 17 years, and 2) Will that expiration date of 2030 stay the same.
The guy I talked to on the phone was reassuring on both counts, but I do not share his confidence. Still, changes in 1 or 2, or both, would have to be pretty major to prompt me to pay it off. And the hurdle of 4.2%, (or 5%, or 6% depending on assumed changes in 1 or 2) should be pretty easy to beat with alternative investments, or paying down my other mortgages, of which I have many.
Early retirement and I also determined that the two MR fees are based on different factors. It seems the first depends on square footage, and the Poway Unified one depends on property value. Interesting.
Anyway, I am not paying off the MR, based on this information, unless someone here can bring other evidence to bear.

Interesting point EconProf. My first thought was maybe this is due to timing of the payoff being difference.

When I paid the MR off, we still had 22 years to go on the MR. Total cost over the 22 years would have been $150k. With the payoff at $58k, and one of the MR at 7.5% the calculation came out in favor of payoff as we essentially "earn" $92k by paying the $58k upfront.

Now I have to assume the bulk of the principle is back-end loaded, much like mortgages. Therefore, homeowners are paying primarily interest the first few years.

Assuming I have 17 years left on the MR, with payoff reduced slightly to $50k, residual 17 years of payments would still be $121k. So it would still be worth paying off, but the benefit is not quite as impressive.

Looks like the big difference here between econprof and my scenario is the interest rate involved.

Econprof's CDF #2's payoff is $30k with 17 years left, but because the interest rate is only 4%, yearly obligation is only $2100. My CDF11-3's payoff was $26k with 22 years left, but interest rate was 7.5%, yearly obligation was $3000.

So essentially with the low interest rate of CDF2 and less number of years left on the MR, the payoff strategy doesn't make sense.

I do wonder why PUSD can get CDF2 rate down to 4% but CDF11-3 is still at 7.5%.

Submitted by earlyretirement on September 20, 2013 - 6:22am.

EconProf wrote:
We agree on most of this, ER. Like much in economics and finance, decisions hinge on assumptions we must make with imperfect knowledge. If the MR does go up 2% a year (which is not assured--they went down for the past two years), then my 4.2% hurdle becomes 6.2%. Since I have 6% mortgages I could pay down with this money, its a tossup.
One question that has been batted around on this thread is whether paying off the MR translates automatically into a correspondingly higher value to the property. If not, IOW if buyers are not perfectly rational, then someone could lose by paying off the MR and then moving. So I should estimate my odd of moving in the next few years and factor that in to the decision.
In general, I think that buyers are pretty rational, and plug do MR's into prices automatically. A heavy MR will lower a property's value; its absense will raise it. For a buyer to swear off MR areas entirely would not be rational, since in newer areas they are practically impossible to avoid. If one has a family with school kids, MR is the price you pay for better schools, on average.
As for the close-together, grotesquely large and expensive new houses they are putting up around Santaluz in 4S and Del Sur, I agree with BG that they are not to my taste. But you are paying for the demographics, the shopping, and the resale value, and that is what is compelling to today's buyers.

Yes, EconProof. I do agree with you that your example isn't as compelling as mine was. I think it's GREAT that CFD #2 was refinanced to take advantage of this low interest rate environment and I've questioned publicly and encouraged the Press to see why ALL CFD's haven't refinanced at the lower rates.

Probably in your situation I'd maybe not pay off CFD #2 but I still would pay off CFD #4.

I do think you have to assume that the rate WILL go up from here out forward. We were in a very unusual situation the past few years but I think you would agree that interest rates can't stay artificially low for too much longer. Plus, they already refinanced so the rate won't be going down. It will only move up from here on out. To be conservative, I think you should assume that.

Absolutely, I totally agree you have to factor in the odds you will move/sell in the next few years. No doubt about it.

But still, I don't think that anyone paying it off won't be able to recoup it. I don't believe lenders loan for future CFD tax liability but if you increase your price of your house, you could get a loan for home value.

I also believe that we won't see the lows and the housing depth mess like we saw after the last crash with no-doc loans and anyone with a heartbeat getting a mortgage. So I assume we've seen the lows. Not to say there couldn't be more ups and downs but I don't honestly see a situation like we saw before. I do believe that anyone that bought at the depths of the lows were truly fortunate and timed it right.

Yes, I agree that not all the communities around here are my cup of tea. For example, several developments in Carmel Valley like Pacific Highlands Ranch totally aren't worth it with 5 or 6 people looking in on your backyard and NO privacy. I also don't find anything too special about 4S Ranch.

But there are several beautiful developments around here. We have friends in several of them and they truly love living around here. (Verrazzano, Santa Monica, Del Sur, Fairbanks Summit, Crosby, Collins Ranch, and of course Santaluz).

ocrenter wrote:
EconProf wrote:
Since early retirement and I both live in Santaluz and face Mello-Roos fees, we met up today to compare notes. It turns out the decision of whether or not to pay off the MR is not at all clear cut.
I brought my tax bill with me so we could crunch the numbers to see if it is worthwhile. I also called earlier today, the number on the tax bill to learn my cost to pay it off, and got additional information about MR.
My bill contains two MR payments, CFD#2 for $2108 per year, and expiring in 2030, and Poway Unified, CFD#4 for $904 per year. I only called the number for the first, which revealed that my cost would be "about $30,000" to pay off (exact amount would cost me $500 to find out, but would apply as a credit to the payoff). That means if the amount stayed the same for the next 17 years, I would pay a total of about $36,000.
It clearly appears I should NOT pay it off, given that I could invest that $30,000 today and have it double assuming a mere 4.2% annual ROR compounded. Of course the unknowns are 1) Will that $2108 stay the same for 17 years, and 2) Will that expiration date of 2030 stay the same.
The guy I talked to on the phone was reassuring on both counts, but I do not share his confidence. Still, changes in 1 or 2, or both, would have to be pretty major to prompt me to pay it off. And the hurdle of 4.2%, (or 5%, or 6% depending on assumed changes in 1 or 2) should be pretty easy to beat with alternative investments, or paying down my other mortgages, of which I have many.
Early retirement and I also determined that the two MR fees are based on different factors. It seems the first depends on square footage, and the Poway Unified one depends on property value. Interesting.
Anyway, I am not paying off the MR, based on this information, unless someone here can bring other evidence to bear.

I
I do wonder why PUSD can get CDF2 rate down to 4% but CDF11-3 is still at 7.5%.

Exactly OCR! I can't figure out why they can't get it refinanced but then again NOTHING about PUSD surprises me these days.

Submitted by ocrenter on September 19, 2013 - 10:51pm.

ER, I think the 2% yearly MR increase is automatic. They essentially computed the bond payoff with the 2% yearly increase in mind. Just checked my street and it looks like the 2% MR increase is right on schedule.

This is another reason why the MR payoff made sense to me. When I paid it off last year, the yearly obligation was $5300. But after 10 years, that yearly obligation would be $6400, and after 15 years, that yearly obligation would then be $7000.

Meanwhile, with the AMT, the MR essentially feels like double taxation. I'm using post tax dollar to pay more tax, just doesn't feel right.

Submitted by earlyretirement on September 20, 2013 - 6:13am.

ocrenter wrote:
ER, I think the 2% yearly MR increase is automatic. They essentially computed the bond payoff with the 2% yearly increase in mind. Just checked my street and it looks like the 2% MR increase is right on schedule.

This is another reason why the MR payoff made sense to me. When I paid it off last year, the yearly obligation was $5300. But after 10 years, that yearly obligation would be $6400, and after 15 years, that yearly obligation would then be $7000.

Meanwhile, with the AMT, the MR essentially feels like double taxation. I'm using post tax dollar to pay more tax, just doesn't feel right.

Yep. I didn't know if it was "automatic" per se. I know the last 2 or 3 years wasn't normal due to extremely low interest rate environment and refinancing. But we won't be seeing another refinance of those that have been refinanced already.

It would be nice if CFD #4 gets it's act together and refinances for it's taxpayers. But I'm not going to hold my breath. But yes, like you in my models I included the assumption they will raise it 2% a year and won't leave any money on the table.

ocrenter, where do you live? Do you live around our hood? Thanks for posting such great information. Actually it was some of your posts that were really really educational for me on this whole CFD pay off. That's why these message boards are so valuable. Thanks.

Submitted by ocrenter on September 20, 2013 - 8:00am.

earlyretirement wrote:

Yep. I didn't know if it was "automatic" per se. I know the last 2 or 3 years wasn't normal due to extremely low interest rate environment and refinancing. But we won't be seeing another refinance of those that have been refinanced already.

It would be nice if CFD #4 gets it's act together and refinances for it's taxpayers. But I'm not going to hold my breath. But yes, like you in my models I included the assumption they will raise it 2% a year and won't leave any money on the table.

ocrenter, where do you live? Do you live around our hood? Thanks for posting such great information. Actually it was some of your posts that were really really educational for me on this whole CFD pay off. That's why these message boards are so valuable. Thanks.

I think they may have contract obligations to the bond holder to keep it at a certain interest rate??? just speculation on my part.

haha, we are in lizard country, aka Stonebridge. According to some people's Thomas Guide, the place is so far flung they didn't even assign a page #!

Submitted by earlyretirement on September 20, 2013 - 8:32am.

ocrenter wrote:

I think they may have contract obligations to the bond holder to keep it at a certain interest rate??? just speculation on my part.

haha, we are in lizard country, aka Stonebridge. According to some people's Thomas Guide, the place is so far flung they didn't even assign a page #!

Yes, I thought about that as a possibility. Like with the PUSD Capital Appreciation Bond mess and the lack of them being able to refinance lower. It's all shady and even when you try to investigate and find answers it's usually a dead end.

Our only hope with that is the media and that they continue to press forward with investigations and reporting it. It's the taxpayers biggest ally.

Stonebridge is great..... We have a friend living there and they LOVE it and our realtor also lives out there and raves about it. Such beautiful homes as well. That's a great area. far flung..ha ha. Yeah, I get a crack out of some of that "far flung and lizardland" talk....

Submitted by all on September 20, 2013 - 8:34am.

earlyretirement wrote:
all wrote:

Black Mountain Ranch (Santaluz + Del Sur) is supposed to have 300-room resort. The plan was to have two golf courses, one in Santaluz and one (public) in Del Sur. The resort was supposed to be adjacent to the north course. The Del Sur golf course was scrapped few years ago (commercial sqft was increased instead), but the resort is still on. That's one possibility. The other is another high-end subdivision similar to Ivy Gate.

I don't see this ever happening. Santaluz's Golf course is really nice. I don't see anything like that ever coming and Del Sur will never see a golf course. Not sure about the resort but I don't see that happening either.

Did you confuse me with BG?

Del Sur had a fee-based public golf course planned and it was supposed to designed by the same team that designed the Santaluz golf course. You can see an overview of the original plan for Black Mountain Ranch here: http://www.blackmountainranch.com/Open/p...

The north golf course was canceled few years ago. And based on the financing plan for FY2013 the 300-room hotel is still on:

Residential
The anticipated remaining residential development for Black Mountain Ranch is estimated at 2,694 dwelling units. A list of the types and amount of planned residential development can be found in Table 1 on page 6.
Non-residential
The anticipated remaining non-residential development for Black Mountain Ranch is projected to be 225,000 Commercial and 515,000 Employment/Office square footage, and 13.2 Institutional acres, and 300 hotel rooms.

http://www.sandiego.gov/facilitiesfinanc...

Submitted by earlyretirement on September 20, 2013 - 9:16am.

all wrote:
earlyretirement wrote:
all wrote:

Black Mountain Ranch (Santaluz + Del Sur) is supposed to have 300-room resort. The plan was to have two golf courses, one in Santaluz and one (public) in Del Sur. The resort was supposed to be adjacent to the north course. The Del Sur golf course was scrapped few years ago (commercial sqft was increased instead), but the resort is still on. That's one possibility. The other is another high-end subdivision similar to Ivy Gate.

I don't see this ever happening. Santaluz's Golf course is really nice. I don't see anything like that ever coming and Del Sur will never see a golf course. Not sure about the resort but I don't see that happening either.

Did you confuse me with BG?

Del Sur had a fee-based public golf course planned and it was supposed to designed by the same team that designed the Santaluz golf course. You can see an overview of the original plan for Black Mountain Ranch here: http://www.blackmountainranch.com/Open/p...

The north golf course was canceled few years ago. And based on the financing plan for FY2013 the 300-room hotel is still on:

Residential
The anticipated remaining residential development for Black Mountain Ranch is estimated at 2,694 dwelling units. A list of the types and amount of planned residential development can be found in Table 1 on page 6.
Non-residential
The anticipated remaining non-residential development for Black Mountain Ranch is projected to be 225,000 Commercial and 515,000 Employment/Office square footage, and 13.2 Institutional acres, and 300 hotel rooms.

http://www.sandiego.gov/facilitiesfinancing/pdf/plans/bmrelement121221.pdf

No, I didn't confuse you. I was just responding in one post. Sorry for any confusion.

Yes, I am aware of the original plans for that Golf Course but as mentioned, I doubt that will ever happen. I do understand it was cancelled but I didn't know if you were trying to imply it was a possibility for the future.

As far as the 300 room hotel. Where is that supposed to go? I'm not sure about the financing plan for 2013 but it's already September 2013. Where do they propose to do that?

Submitted by all on September 20, 2013 - 10:05am.

earlyretirement wrote:

Yes, I am aware of the original plans for that Golf Course but as mentioned, I doubt that will ever happen. I do understand it was cancelled but I didn't know if you were trying to imply it was a possibility for the future.

As far as the 300 room hotel. Where is that supposed to go? I'm not sure about the financing plan for 2013 but it's already September 2013. Where do they propose to do that?


No, I don't think they will put the north golf course back in plan. If you look at the map you can see the intended location and it does not look like anything is replacing it.

2013 financing plan just lists the hotel as a TBD item, it was not supposed to be completed during 2013FY. The plan was last amended in 2009 and it is available here.
The senior center you mentioned earlier is in the plan - look at the map on p.34 and p.47. The employment center is supposed to go right next to the shopping center, all the way to the north.

I can't locate the hotel on any of the maps. Based on the available info it will likely go in the far eastern corner of the north village - across the street from Ivy Gate and Oak Valley middle school.

Submitted by bearishgurl on September 20, 2013 - 11:51am.

UCGal wrote:
BG -
Once again you assume that because it doesn't fit your personal wishes/lifestyle/demographic - it's invalid.

Yes - you're a baby boomer looking towards retirement. Yes - you do a lot of work downtown. Yes - you've only got one child left at home - soon to fly the nest. So for you - southbay is a good fit for your needs. That doesn't make it the ideal spot for others, with different needs.

Not everyone buying houses is a baby boomer nearing retirement. In fact, I would assume that many home buyers are folks with minor age children, or planning on having children in the future. Most baby boomers have already purchased their primary home... although some might be looking for retirement homes to downsize to.

BG - you need to remember there are job centers outside of downtown. Sorrento Valley/sorrento mesa is a huge employment center. Probably more folks working there than downtown. (Based on traffic I'm pretty certain this is true.) Carlsbad has quite a few businesses/industries. The I-15 corridor from Scripps Ranch up through Rancho Bernardo has a number of large employers. Folks who work in these areas would not be well served by having a commute to the southbay.

True - the legal stuff is downtown because of the courthouse and jails - and that's the field you're in. But there are other industries in San Diego county - so living close to downtown might not do anything for your commute if you work in Carlsbad.

Please try to remember that not all home buyers have the same needs/wants that you do. I get frustrated by the way you attack folks who have different views.

Uhh, except that you yourself have minor children and chose not to buy within a CFD, UCGal. You're one of many thousands of parents who chose not to voluntarily pay this tax. As KPBS keeps telling us, "Mello Roos is the tax you choose." In fact, you have stated here repeatedly that you are sending your kids to those dreaded (gasp!) SD City Schools. That's all I've been saying here. There are many, many areas for housing choices in SD County but the main posters here (defending the "corrupt" mgmt of their own CFD's?) make it sound to the public as if one has minor children that they are "forced" to pay MR to "get good schools." It would have been more accurate for them to state that they were "forced" to pay MR to "get new schools." We all know that the age of a school has nothing to do with the quality of education offered within it.

UCGal, I don't know where you are seeing anywhere on this forum that I have been trying to "sell" south county. There are newer-developed areas in South County which have the exact same problems as those in North County! I actually tell people to stay away from them!

I know exactly where all the job centers are. I was HERE when they were all but a twinkle in a developer's eye and began with just one cul-de-sac, remember?

The whole jist of my posts on this thread were that every buyer has a different list of requirements for their next home. It was just the opposite of my own wants and needs (fwiw, I don't need a 1/2 AC+ lot and only have one vehicle to park). A mcmansion located six feet from the next one in a high-priced subdivision encumbered with high MR and high HOA dues is NOT a one-size-fits-all solution for every buyer, not even for every buyer in the $1M+ range.

ER, correct me if I'm wrong, but I understood you to state here that you were SURE that EVERY prospective buyer in SD County in the $1M+ range would fall head over heels for your house when they became aware that you prepaid your MR and would be glad to compensate you in your sales price for your prepayment. And no matter where their target shopping area was located, they could be "drawn" and "led" by their agent/broker to your listing because of this fact.

***

I DO believe ER can get reimbursed for his MR prepayment NOW upon sale but I think if he has been getting unsolicited offers for over $300K more than he paid for the property (1.5 yrs ago?), then those offers have much more to do with his extensive (interior and exterior?) rehab of it and the fact that the market has gone up since he bought it than the fact that he prepaid his MR. In other words, he may have gotten some of the same offers if he DIDN'T prepay his MR strictly due to demand for SantaLuz and the dearth of current decent listings behind his gate.

Oh, and btw, folks, there are several threads on this forum detailing the travails of homeowners lamenting their continuous reptile encroachment in that "outer-lizardia" (spdrun's words, however fitting) bastion here in SD County known as Stonebridge.

I have a suggestion. Maybe that nice local power station y'all have out there can serve double-duty as a reptile eradicator. Just gather all your reptiles up from your neighbors one by one in plastic trash cans, drop them at the base of the station, crack open a cold one and sit and watch them fry while they crawl up the pipes!

zzzzzzzzzz

That's your "free" solution, that is, until a whole new crop of them hatch and the cycle repeats, lol.

Submitted by earlyretirement on September 20, 2013 - 2:19pm.

bearishgurl][quote=UCGal wrote:
BG -

ER, correct me if I'm wrong, but I understood you to state here that you were SURE that EVERY prospective buyer in SD County in the $1M+ range would fall head over heels for your house when they became aware that you prepaid your MR and would be glad to compensate you in your sales price for your prepayment. And no matter where their target shopping area was located, they could be "drawn" and "led" by their agent/broker to your listing because of this fact.

.

No, that's not what I said nor implied. Not even close.

all wrote:

No, I don't think they will put the north golf course back in plan. If you look at the map you can see the intended location and it does not look like anything is replacing it.

2013 financing plan just lists the hotel as a TBD item, it was not supposed to be completed during 2013FY. The plan was last amended in 2009 and it is available here.
The senior center you mentioned earlier is in the plan - look at the map on p.34 and p.47. The employment center is supposed to go right next to the shopping center, all the way to the north.

I can't locate the hotel on any of the maps. Based on the available info it will likely go in the far eastern corner of the north village - across the street from Ivy Gate and Oak Valley middle school.

I still say that hotel probably never ever happens. I could be wrong but I just can't see it. It IS amazing watching the growth of new home developments in that area. Wow, the recovery was sure quick and I know several people that bought 2nd properties in that back development and in Del Sur. It will be interesting to see how it plays out.

Yes, that senior center has always been zoned for that type of facility. Actually I think it could be a good idea because many families in the area have older parents and they might not want them living with them but want them very close.

Plus that plot of land isn't too big and there aren't too many options there and the field is just empty and ugly with weeds growing on. It's sitting right next to the school (Willow Grove). Of course I need to hear more about it and get some specific questions answered but I don't think it's a bad idea and could even possibly be interested in the far future in utilizing it for family.

I think an even better use of that land however would be for Willow Grove to expand and build some more classrooms. There is HUGE demand for enrollment there and always more kids that want to get in and more and more young families moving to the area. Something like 53 kids didn't get into Kindergarten here this school year. And there are already 5 Kindergarten classes there now.

I get sick when I read about OUR CFD taxes that we pay being used in schools in NON-CFD areas! If PUSD has a problem spending the money, they could investigate the feasibility of getting this land and expanding the school. That would be a GREAT use of funds!

I'm not sure how feasible it would be (probably impossible) but I think a better use of this land would be to expand Willow Grove so more families that live in the area can send their kids to school here rather than drive to other areas. The school is amazing and one of the BEST Elementary schools in the State. I can't tell you how thrilled I am with that school.

Quick question for those of you that have been living here for a while? That back road on Winecreek Road, was it always a gated community? I don't recall a few years ago there being a gate around the community. Is that new or has that always been there?

I remember back in 2010 there were many houses in severe distress back there and the sales prices were very low relative to the lot and home sizes. I believe that is where Romney's son bought a place. Has that always been gated? I tried driving around there the other day and saw it gated. Is that new? Thanks in advance.

Submitted by all on September 20, 2013 - 3:13pm.

earlyretirement wrote:

Quick question for those of you that have been living here for a while? That back road on Winecreek Road, was it always a gated community? I don't recall a few years ago there being a gate around the community. Is that new or has that always been there?

I remember back in 2010 there were many houses in severe distress back there and the sales prices were very low relative to the lot and home sizes. I believe that is where Romney's son bought a place. Has that always been gated? I tried driving around there the other day and saw it gated. Is that new? Thanks in advance.

The subdivision is named Ivy Gate. Yes, it was gated since the day one. Romney (Matt?) owns there. Another son of Mitt's lives in the area, possibly the same subdivision and they have few relatives in 4S.

The hotel probably makes less sense with no golf course, but they will try to build something and I am not sure how easy it is to make major changes in the plan.

Submitted by earlyretirement on September 20, 2013 - 3:46pm.

all wrote:
earlyretirement wrote:

Quick question for those of you that have been living here for a while? That back road on Winecreek Road, was it always a gated community? I don't recall a few years ago there being a gate around the community. Is that new or has that always been there?

I remember back in 2010 there were many houses in severe distress back there and the sales prices were very low relative to the lot and home sizes. I believe that is where Romney's son bought a place. Has that always been gated? I tried driving around there the other day and saw it gated. Is that new? Thanks in advance.

The subdivision is named Ivy Gate. Yes, it was gated since the day one. Romney (Matt?) owns there. Another son of Mitt's lives in the area, possibly the same subdivision and they have few relatives in 4S.

The hotel probably makes less sense with no golf course, but they will try to build something and I am not sure how easy it is to make major changes in the plan.

Thanks all for taking the time to answer. Ah ok that's good to know it's always been gated. I was always curious how it was back there. Because during the downfall I remember looking at Google Maps and even some for sale listings had these HUGE yards and the owners couldn't even afford to landscape them! I remember back in 2009 and 2010 there were listings for them with barren lots.

There were some STEALS back then. I remember seeing some HUGE houses in the $1 million range. People that picked them up at the lows must be happy. The area is really great but I was always curious how it was back there.

Here are a few houses I remember seeing for sale but I never got a chance to check them out because I found a property.

http://www.redfin.com/CA/San-Diego/10239...

http://www.zillow.com/homedetails/10239-...

5,361 sq. feet Sold on May 13, 2011 for $1,050,000. Previous sale was July 11, 2006 for $1,583,000.

It was a short sale. Zillow's estimate has it worth $1.7+ million now!

http://www.redfin.com/CA/San-Diego/9910-...

http://www.zillow.com/homedetails/9910-W...

4,205 sq. feet. Sold on July 28, 2011 for $1.1 million. Previous sale was March 2, 2007 for $1.463 million.

Zillow estimate for $1.493 million now.

http://www.redfin.com/CA/San-Diego/10240...

http://www.zillow.com/homedetails/10240-...

Zillow Estimate now $1.319 million.

Exactly correct about the NO hotel without the golf course. I just don't see the hotel happening. Not now not ever.

Submitted by all on September 20, 2013 - 3:51pm.

earlyretirement wrote:

There were some STEALS back then. I remember seeing some HUGE houses in the $1 million range. People that picked them up at the lows must be happy. The area is really great but I was always curious how it was back there.

I made a couple of offers in 2008-2009. The lady of the house thought we would be stretching, the area is not walkable and it would be too much hassle to maintain the house and the yard, so I gave up.

Submitted by earlyretirement on September 20, 2013 - 4:03pm.

all wrote:
earlyretirement wrote:

There were some STEALS back then. I remember seeing some HUGE houses in the $1 million range. People that picked them up at the lows must be happy. The area is really great but I was always curious how it was back there.

I made a couple of offers in 2008-2009. The lady of the house thought we would be stretching, the area is not walkable and it would be too much hassle to maintain the house and the yard, so I gave up.

Yeah, I agree about the area not being too walkable. We do enjoy riding our bikes quite a bit. The things that turned me off was the proximity to the school there. I imagined that traffic would back up in the afternoon on Carmel Valley Road/Bernardo Center Drive and indeed I do notice that there are TONS of cars at the end of the day when parents are picking up their kids.

Also, I did NOT want or need a HUGE lot like that. Some of those houses are on 1/2 to 1 acre spreads and that was actually a huge turn off to me to have to maintain a yard like that. To me more important was access and close proximately to great parks and playgrounds so Santaluz worked out PERFECTLY for my family.

The weather is pretty incredible in this area however as you avoid the marine layering yet you avoid the hotter temperatures a bit further beyond passing I-15. Best as I can tell those people that bought did VERY well. Picking up houses like that at the time and the prices they did will pay for a lot of water to water the huge yards. LOL.

How was the quality of construction of the houses all? Was any of it custom homes or was it lower end nothing special stuff like some of what is in 4S Ranch? From some of the listings I remember the houses look like they used good materials and they looked really nice. Quality of construction looked solid although I didn't see any of the houses in person so I was always curious. It didn't appear to be the cookie cutter type house that so much of the area has.

Submitted by bearishgurl on September 20, 2013 - 4:02pm.

ER, you've made my point for me. If "zillow" values are actually correct, the old listings the on three links you just posted are now almost equal to (or beyond) "millenium boom prices," regardless of the amount of MR still owed on them. They went back up because their micromarket shot up in price in the ensuing couple of years. This (partially) explains the amounts of your recent unsolicited offers.

A property being sold way below market as a short sale also has a tendency to shoot up in value after purchased/cleaned up a little.

Congrats, ER! MR paid off or not, you apparently purchased in an area of high demand. It will be interesting to see if this level of demand keeps up if the majority of properties begin listing (and selling) for OVER $1.5M and stay there.

Submitted by earlyretirement on September 20, 2013 - 4:16pm.

bearishgurl wrote:
ER, you've made my point for me. If "zillow" values are actually correct, the old listings the on three links you just posted are now almost equal to (or beyond) "millenium boom prices," regardless of the amount of MR still owed on them. They went back up because their micromarket shot up in price in the ensuing couple of years. This (partially) explains the amounts of your recent unsolicited offers.

A property being sold way below market as a short sale also has a tendency to shoot up in value after purchased/cleaned up a little.

Congrats, ER! MR paid off or not, you apparently purchased in an area of high demand. It will be interesting to see if this level of demand keeps up if the majority of properties begin listing (and selling) for OVER $1.5M and stay there.

Hi BG. If anything many houses in my area the Zillow prices are actually low. For example, a recent house in my area sold in a few hours and they sold it $150,000 more than the Zillow estimate.

The recent unsolicited offers for my house do NOT account for the $150,000 I spent in renovations. One of the people that offered on it actually saw it while it was for sale before I bought it. They since had another baby. But the other 2 never saw the inside of it and never will as the house was never for sale while I owned it. The person that did see it never saw it with all the renovations we did in it.

I'm not sure how prices will do in the future. But honestly I don't really care too much. They could fall back down and I wouldn't really care as I plan to stay in the house. It could also go up to $2 million and I still wouldn't sell as we have the house perfect how we want it.

I don't want to move again for a long long time. :) But if we ever see a downfall like we saw before I won't make the mistake again of not picking up another house or 2 for investment properties. That was one of the dumbest moves that I didn't take advantage of.

I KNEW property values would go back up but I missed out. I did make a few offers on properties in Carmel Valley but I wasn't going to get into a bidding war or pay more than asking prices. I got beat on a few with cash offers.

Oh well..hindsight is 20/20 as they say. I guess you can't win them all. I've done extremely well over the years with real estate plays and timing the real estate market.

Submitted by bearishgurl on September 20, 2013 - 4:28pm.

Oh, I understand all that, ER. You've stated here repeatedly that your current residence will likely be your "forever home."

I wasn't sure whether your improvements were visible from the exterior of your property ... or not. I surmised you had spent at least $100K on them because of your various descriptions here on what you installed.

My point is (as I stated much earlier in this thread), that I don't think anyone can really predict whether paid-off MR will actually improve the ultimate sales price of a property over recent comparable sales. In any case, buyers who have to get mortgages have lenders who will have appraisals done and if the agreed-upon sales price exceeds the appraisal, the lender will only loan the buyer(s) what they are qualified to borrow and only up to a certain LTV. So these buyers may very well have to make up the difference to the sellers from their pockets if seller won't lower their price down to their buyer's appraisal amt. If they cannot do so, they will have to back out.

Prepaid MR might make a property more saleable and sell much faster than the sea of listings around them which still owe MR. Whether or not that translates into any more money for sellers who prepaid MR is anyone's guess.

In your case, it doesn't matter because your pay-off was deeply discounted from what you would have had to pay your CFD(s) over the long haul had you not retired your MRs. And you will certainly own the property longer than the break-even point which I think you stated was ~10 years. So you prepaid you MRs strictly to benefit yourself.

Submitted by earlyretirement on September 20, 2013 - 5:06pm.

bearishgurl wrote:
Oh, I understand all that, ER. You've stated here repeatedly that your current residence will likely be your "forever home."

I wasn't sure whether your improvements were visible from the exterior of your property ... or not. I surmised you had spent at least $100K on them because of your various descriptions here on what you installed.

My point is (as I stated much earlier in this thread), that I don't think anyone can really predict whether paid-off MR will actually improve the ultimate sales price of a property over recent comparable sales. In any case, buyers who have to get mortgages have lenders who will have appraisals done and if the agreed-upon sales price exceeds the appraisal, the lender will only loan the buyer(s) what they are qualified to borrow and only up to a certain LTV. So these buyers may very well have to make up the difference to the sellers from their pockets if seller won't lower their price down to their buyer's appraisal amt. If they cannot do so, they will have to back out.

Prepaid MR might make a property more saleable and sell much faster than the sea of listings around them which still owe MR. Whether or not that translates into any more money for sellers who prepaid MR is anyone's guess.

In your case, it doesn't matter because your pay-off was deeply discounted from what you would have had to pay your CFD(s) over the long haul had you not retired your MRs. And you will certainly own the property longer than the break-even point which I think you stated was ~10 years. So you prepaid you MRs strictly to benefit yourself.

Hi BG. The only thing you could spot from the outside is we totally re landscaped our yard so you can see that. But I live in a gated community so it's not like anyone from the public could even see it. Everything else was all done inside.

And interestingly enough, before Google Maps had Street View of the streets here as I think a Google car snuck in. But complaints to Google got them TOTALLY removed so you can't see the street view anymore from the streets in my community.

When I bought my house a few years ago I COULD see the street view which was really a great benefit. But so many people in my hood complained to Google for privacy reasons and legally they should NOT have entered so they had to remove it.

Oh yeah, we actually did quite a bit of work. My wife is glad to be done. I'm always wanting to do more! I just decided I will renovate the interior of the garage to make it really nice. That is one thing she doesn't mind! I'm having California Closets come out next week to give a quote on really getting it super organized.

I actually TOTALLY agree with you that NO ONE should be paying off their Mello Roos to try to improve their resale value or in the hopes of more easily selling their house. That I don't agree with at all. I think it only makes sense for pure ROI principles.

I totally agree with you there. There are NO guarantees at all about that. What I am guaranteed is that I have a good and guaranteed ROI paying off my CFD's and totally remove the possibility that I'll get stuck dealing with extensions in the future. It's a great feeling to me and well worth it.

Submitted by Clueless on September 23, 2013 - 9:16pm.

We try to pay off our MR with an address at CV but the answer we got today was that we can't prepaid. It was a 30 yr bond with a mature year in 2033 and potential extension into 2043. We want to pay off now since we plan to stay here forever. Very unhappy with how the bond was structured.

Early retirement- you seems to know a lot about MR payoff. Could we contact you to get some advice?

Submitted by earlyretirement on September 23, 2013 - 10:48pm.

Clueless wrote:
We try to pay off our MR with an address at CV but the answer we got today was that we can't prepaid. It was a 30 yr bond with a mature year in 2033 and potential extension into 2043. We want to pay off now since we plan to stay here forever. Very unhappy with how the bond was structured.

Early retirement- you seems to know a lot about MR payoff. Could we contact you to get some advice?

Clueless,

Which specific CFD # was it? Who did you call about it? Who did you talk to specifically?

I wouldn't say I know a lot about Mello Roos taxes. I did prepay it off and happy to help if I can in anyway. But I'd ask you to also post about it here so others can benefit from the information and your experience.

Feel free to PM me but can you also answer here which CFD # it is and those other answers to those questions?

Submitted by Clueless on September 23, 2013 - 11:25pm.

CFD 99-1 for carmel valley schools is the one I try to pay off.

Dolinka Group answered my request timely and sent me the doc without charge. They were very good in returning my call. I checked on website and found John Addleman should be the contact person, but an associate answered me instead. In the doc, there is a prevision on prepaid term. One has to do it before the house was built. Does not make any sense to me. That is why I want to get your expert's opinion.

I will PM you tomorrow.

Thanks.

Submitted by earlyretirement on September 24, 2013 - 6:09am.

Clueless wrote:
CFD 99-1 for carmel valley schools is the one I try to pay off.

Dolinka Group answered my request timely and sent me the doc without charge. They were very good in returning my call. I checked on website and found John Addleman should be the contact person, but an associate answered me instead. In the doc, there is a prevision on prepaid term. One has to do it before the house was built. Does not make any sense to me. That is why I want to get your expert's opinion.

I will PM you tomorrow.

Thanks.

When you say "they sent you the doc" which document are you referring to? I assume you mean, he sent you instructions to pay off your CFD? Or did he send you some other paperwork referring to CFD #99-1?

Can you cite the exact provision regarding the prepayment term? Or was that only something he told you verbally? If he told you verbally, call back and ask them to cite the exact verbage and clause regarding the prepayment. As well, ask them to cite exactly which paragraph it is located at. If you have that, PM me and I'll take a look at it.

I've been mentioning here for a while that I do believe that some of the various CFD's will ban prepayment in the future. And ultimately if you look at that it's because it's for THEIR advantage....NOT ours as taxpayers. Which in and of itself tells you quite a bit regarding if you should pay it off or not.

"Potential extension until 2043". Yeah right! No Thanks!!!

Submitted by ocrenter on September 24, 2013 - 6:24am.

Clueless wrote:
We try to pay off our MR with an address at CV but the answer we got today was that we can't prepaid. It was a 30 yr bond with a mature year in 2033 and potential extension into 2043. We want to pay off now since we plan to stay here forever. Very unhappy with how the bond was structured.

Early retirement- you seems to know a lot about MR payoff. Could we contact you to get some advice?

agree with ER.

"potential extension into 2043" = we got you until 2043.

no question about it.

the blocking of prepayment may be because they are already counting on the 2033-2043 payments, if you prepay, they don't get "their" money.

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