OT- selling houses

[dantfmly]

here is the house we sold. it is under contract for $179,000, which leaves us with 78,000 after we pay what we owe on it. not bad for only four years living in it and still owing more then what the original price of $97,900.

Here is the new house we are buying for $249,999, we are putting 35,000 down.

Of course these prices are waiting for appraisals.

[PhilMays]

WOW!

DANTFMLY - I have a house in Richmond that I use as an investment. It has appreciated a wopping 15% in two years but only 2% annualy for the previous 6 years. I feel real estate prices will stabalize and not have huge increase in the future do to rising interest rates. One good thing about your thoughts are that if you paid you car off and carried a larger loan at least that interest is tax deductable. Fact of the matter is that you already have the new car so your stuck with that loan unless paid off.

TBRENNON - Ouch...I'm a Virginian and wouldn't live there myself but Ouch...I bet I vould find a few holes in Indiana I wouldn't want to live as well either.

ROYSTER - I love what you said about instruction on a dollar bill but cannot buy into "no such thing as good debt". Each persons "ideal" differs drastically. My father would never do business the way I do business. I aslo feel that investing is a "life long" venture. A diverse portfolio will include some "dogs" from time-to-time but overall if one stays the course one can expect 8% to 12% returns averaged annually. I have even through two recessions. I also agree that many people have lost everything o speculation. These same people probabaly have gambling problems as well. I buy on speculation for fun. When I do it is money that I don't need and am willing to "gamble away". I have been right as many times as wrong and am perhaps even specutavely. Anything (monies) I need for the future are tucked away neatly and contributions made monthly. You know what they say...pay yourself before you pay anyone. Don't take me wrong I agree with most of what you say.

NEO - I wish I were 21 again...I would heed the advise of so many others. Because I did not I now have to "double invest" as I missed out on the "time" concept for the first decade of my income earning life. While I feel you pretty much have a good grasp on concepts I also feel time will mold your thought processes as to what type of investor you are. Remember, never try to change someone else's personal perspective on investing. As far as professors go...Mostly they are people who have the theory "down pat" and are best suited to teach the theory Hope no professors read this

YEA TO FIXED RATES!

[colterphoto1]

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On 8/26/2004 4:21:54 PM dantfmly wrote:

plus it is not all about how much money you make, it is also about how happy you are, i woould be much happier to have no payment that i owed then having a bill. When you die or get OLDer then dirt what use is all that money to you. My grandpa is always saying you have the money when you can't use it, but when you can enjoy it you never have it. I would like to just have enough when i retire not to put my family in to poor house to take care of me.

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AMEN to what Grandpa sez! My grandpa had another good money saying (amongst others), one that described his wanting to pay bills in person:

"I like to look a man in the eye when he takes my money"

With time passing, I realize the wisdom of his saying, one that in olden times, as today, there was a pride that went with worksmanship. Paying the worker in person would help enforce the exchange for fair work or goods. Also it was a good reason for an old man to get out of the house and visit people. He lived to be 86- got hit by a truck.

[IndyKlipschFan]

You invest in items that appreciate. (House and investments.) A house for example is usually always a good investment. What you put down to make the payment comfortable is up to you. Pay it all off and owe nobody nothing is also very smart if you can afford it and have other money to invest. (BTW if you pay just a little more each month, watch months and years drop off the end payments too of your 15- 20- 30 yr mortgage.) Investments an IRA, Roth IRA, even 401k's, etc., etc., do this at an early age, and you will get really wealthy by the time your older. (And still young enough to really enjoy it too.)

Anything else like charge cards, to cars, in other words depreciating investments... Loans on a boat etc etc,.., Pay em off. Always the faster the better.

My fathers advice was well taken out of school.. Put in the bank (I know boring) at least 6 months of "Screw you" money so if times get bad your fired or want to leave someone for a better position you can. I have done this 2 times in my life and although hired within 30 days on both occasions.. I slept good every night knowing I was in charge of my future and not my boss or last job.

I also never on personal items put off paying the item off on charge cards. With cash in the bank, no loans, no car loans, etc., etc., ....you really can do what you want.

There is a reason the cash loan places and banks are so profitable. Right up with casinos.. A pretty good racquet if you ask me.

[dantfmly]

closing are next week. Almost there. Will have pics of the system when it set up in the new house. Hopefully i will have enough money left over to buy the big screen tv i have wanted for a while. We will just have to wait and see.

[sheltie dave]

Dant, make sure you buy a HOW(home owner's warranty package) that will provide insurance on the major appliances in the house for a year or two. You probabkly are looking at $300 to $2000 , but it will be cheap insurance when the furnace or water heater fails in January!

[neomartic]

Phil and Indy,

Thanks for the good words. I'm so excited to finish school (in May) and start making some decent money. Then I can really start investing heavily, rather than the little bit I can afford to put away now. btw. How old were you guys when you got your first home mortgage? just curious.

[dantfmly]

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On 10/19/2004 11:17:34 AM sheltie dave wrote:

Dant, make sure you buy a HOW(home owner's warranty package) that will provide insurance on the major appliances in the house for a year or two. You probabkly are looking at $300 to $2000 , but it will be cheap insurance when the furnace or water heater fails in January!

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we had one on this house, that we have for now, when we bought it. It was really useless, and did not cover the heating/cooling system and it would cost us 75 dollars just to come olut and look at the dryer. We fixed it our selves for much less then that. I have gotten fairly good at fixing things around the house by myself, If i can't I have my father(general contractor) or my wives father (just really good a fixing things) to help me.

[dantfmly]

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On 10/19/2004 1:34:48 PM neomartic wrote:

Phil and Indy,

Thanks for the good words. I'm so excited to finish school (in May) and start making some decent money. Then I can really start investing heavily, rather than the little bit I can afford to put away now. btw. How old were you guys when you got your first home mortgage? just curious.

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i was 25 when i bought my first house. I am 29 now and i am buying my second house.

[gcoker]

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On 8/26/2004 9:17:03 PM Frank Speaker wrote:

Original post, dantfmly wrote:

“woo hoo. i love housing in my area (Virginia Beach). I bought a house here a little over 4 years ago for $97,900. I am getting ready to sell it and they are telling me it is worth $175,000-180,000. That is one hel# of a jump in four years. I owe 101,000 on the house still (VA loan, 100% of the loan was finaced plus closing costs, plus a refiniacing in there with more closing costs) so after relator fees i could make $65,000 to 70,000.”

It seems to me that debt was worth it. dantfmly made a lot of money going into debt and buying the house.

That’s what leverage is all about in real estate.

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The only thing I would like to point out on the original post

is that he did not account for the money he paid in for the 4 years.

So that amount of money he will make is alot less.

[dantfmly]

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On 10/19/2004 2:47:21 PM gcoker wrote:

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On 8/26/2004 9:17:03 PM Frank Speaker wrote:

Original post, dantfmly wrote:

“woo hoo. i love housing in my area (Virginia Beach). I bought a house here a little over 4 years ago for $97,900. I am getting ready to sell it and they are telling me it is worth $175,000-180,000. That is one hel# of a jump in four years. I owe 101,000 on the house still (VA loan, 100% of the loan was finaced plus closing costs, plus a refiniacing in there with more closing costs) so after relator fees i could make $65,000 to 70,000.”

It seems to me that debt was worth it. dantfmly made a lot of money going into debt and buying the house.

That’s what leverage is all about in real estate.

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The only thing I would like to point out on the original post

is that he did not account for the money he paid in for the 4 years.

So that amount of money he will make is alot less.

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not that muchg less i did most of the work myself.

[Coytee]

Risking getting flamed for the following but:

Some meandering thoughts on investment/speculation

Im a registered broker and use to run a very small broker dealer locally. We sold that company and now my partner and myself are tending the flock of accounts we had and are putting on periodic investment seminars. (yes the following is paraphrased from our seminar)

·Market crash of 1929, although investors may have recovered their losses earlier due to dividends, the DJIA did not make it back to its 1929 highs until 1954, some 22 YEARS after its low point

·Bear market 1973-1974, this devastating bear market began with new high in January 1973 in the S&P 500 of 121.74. From that high, the index fell for 21 months to a low of 60.96, a drop of 50%. From the low, the S&P 500 began a slow recovery. It didnt break its January 1973 high until July 1980, almost 7 ½ years later.

·Market crash of 1987, stocks plunge 508 points amid panicky selling, percentage decline GREATER than in 1929.

·Bear market of 2000-2002, DJIA reached its high on Jan 14, 2000 of 11,722, reached its low on Oct 7 2002 of 7,422.

·S&P 500 high on March 24, 2000 of 1528, low on Oct 9, 2002 of 776

·NASDAQ reached high on March 10, 2000, low on Oct 9, 2002 of 1114

If we have another terrorist attack, corporate scandal, hiccup in Iraq, do you think the market will go up or down? Do you think we WILL have any more of the above?

Were people investing above, or speculating?

If someone is investing in the market, they are counting on a positive return on their investment and a return OF their investment. Furthermore, they are NOT expecting any unforeseen circumstances obliterating their account and forcing them to take multiple years just to break even.

Although this might sound like a sales pitch, for those of you who have long term savings, you can look at an Equity Index Annuity. The upshot is, its a fixed annuity and therefore has ZERO downside risk. Because its an annuity, it grows tax deferred, can avoid probate issues, can offer protection from a lawsuit (just ask OJ Simpson how he protected HIS money from the second lawsuit).

Anyway, I digress along with the above, the EIA will ONLY go up when the market goes up. On contract years when the market goes DOWN, you will earn zero, you will NOT have a negative return on your contract.

Think about that. Go back 1, 5, 15 years..whatever you want and make a listing of your year ending portfolio value. Some years were up and some were down. What if on the DOWN years, you could keep the value the same as prior year endingin effect, removing all the negative years. Although you give up some of the gains by doing this, you give up 100% of the downside risk. I know of some accounts where they started at X value in 1995 and today, are STILL not back to their original value, even though in between, they had FOUR TIMES the net worth in the account. Had that account been this kind of investment that ONLY went up and never down, their high water mark would have probably only been 2.5 times the original investment, as opposed to 4 times. HOWEVER, today (and this is a real example) theyd STILL have that 2 ½ times original investment instead of being at 92% OF it.

*the above is not a solicitation to buy nor sell any securities but meant for information and thought provoking only. If you do something based on the above, I take no responsibility for your actions... unless, you call me first

[dantfmly]

Well i am moved into my new house and settled in for the most part. I have the system setup and wow what difference just between the listening rooms. The new room is smaller and the responce from the speakers is so much better, smoother, bass is so much tigher. This new room has much better acoustic qualities. I will have pictures of the new setup posted on this forum and on my webpage soon, i am just waiting for my big screen TV till i take the pictures, which will be here soon. No more 27" tv for me. Woo HOO!!

[Cleve]

Grrr! You ought to live in Western New York. A homebuyer would be VERY lucky to get the original purchase price after 4 years, let alone profit from the investment. Of course, what can you expect in a state that has the most dysfunctional legislature (as determined by an independent thinktank) in the Union, major counties in fiscal crisis, a state pension plan that's driving local property taxes through the roof, an annual budget growing far in excess of the rate of inflation, and already larger than most countries in the world, and yet EVERY incumbent (regardless of party) that ran won re-election Tuesday?

[dantfmly]

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On 11/6/2004 9:35:24 AM Cleve wrote:

Grrr! You ought to live in Western New York. A homebuyer would be VERY lucky to get the original purchase price after 4 years, let alone profit from the investment. Of course, what can you expect in a state that has the most dysfunctional legislature (as determined by an independent thinktank) in the Union, major counties in fiscal crisis, a state pension plan that's driving local property taxes through the roof, an annual budget growing far in excess of the rate of inflation, and already larger than most countries in the world, and yet EVERY incumbent (regardless of party) that ran won re-election Tuesday?

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I predict the market where i am at will slow down here soon. I don't think this area will ever go down, it is so tansient there is always somebody needing a house, and somebody moving out. This last year is the one where prices have soared through the roof. People where i work bought 200,000 houses and six months later they were worth 250,000. Now that is some return. Most of the time here though, all it takes is about 3-5 years to break even with moving expenses, to be able to move out and not lose any money. Which is important to me, being that i am in the Navy.

[v3spitfire]

Debt can definately have a purpose, both short term and long term. Everything within reason. Corps follow this and have an optimal debt/equity ratio.

If rates are low and your expected return is worth the risk premium of whatever guaranteed rates are, it could be considered.

I agree there are new products out there that give you equity exposure, and tie in some nice guarantees. The problem with some of these, including some equity index annuites is they (can) have huge surrender charges, and sometimes the guaranteed rate is on 80% of your invested assets. Some are very good, but some are a little deceptive.

ALso, it seems that they should be considered as a replacement of your bond assets, not your equity assets.

Back to houses, we've moved 4 times since being maried 9 years ago, and I love the househunting and excitement of buying a new house, even with all the stress it can bring!

[Piranha]

Don't feel bad. There's nothing under $350K around here. And all that would get you is a 900 sq. ft. or less fixer.