I'm one of those people who bought a house un-married, had to borrow money from family to do it, and it was a smashing success. We both come from backgrounds where self renovating on the decade scale is the norm which was a big part of it.
Most of the failures I've seen with house buying are where the two people had drastically different expectations. One person wanted to renovate a house, one person wanted to live in a house that was already renovated, that sort of thing.
In reply to mazdeuce - Seth :
It’s really not a lifestyle issue. You’re right, it can end very well, and usually does.
Its a legal issue. Ownership stakes are very difficult to define when something goes badly.
For example. If a partner passes away, who owns the house? For married couples, the spouse owns it 100%. For unmarried couples, half of the property goes into probate. If there is a will, it goes to the people the deceased designated (who could be total strangers to the surviving spouse). If there is no will, the State decides how it passes to the heirs. The partner is not an heir.
It can be a catastrophe.
The only clean way as far as I am concerned is for only 1 person’s name to be on the deed.
Well, we actually will be getting married at some point, we just aren't right now. We've had the conversation, I'm just waiting to propose at this point.
But we went and looked at this shop today, and the house it comes with. The pictures on zillow and realtor are far WORSE than in looks in person.
Big things:
Gas baseboard heat? I never even knew there was a thing
Carpet in the bathrooms for some stupid reason
Mold in the basement
Spaghetti bowl wiring.
Newish roof over the house, back deck roof is trashed though.
Aside from the mold part of the basement which looks like it was caused because of a poorly sealed door, it looked and smelled fine. Being a foreclosure though, we won't be able to finance, and as much as I want just the shop, it's just not worth it unless we could get it for half the asking price, which we don't have in cash, so it's sadly a no go.
Doing the work myself though, it really looks like $15-20k would make it a really nice place to raise a family. New floors, some plaster patches, taking a breaker finding tool through the wiring, and running a gas line to the kitchen for a stove being the big right away improvement.
We're going to keep scouring Zillow, realtor, craigslist etc, but I don't think we're going to look at anywhere else until we talk to her dad and get a better idea of where we are financially.
I'm also dragging her to the credit union Monday to open a secured credit card so she can at least start building her score up a little bit. I'm really hoping her dad will add her as a user on one of his credit cards to help out, but that still won't solve my proof of income issue.
In the 6 county net I've cast, we've found a whole 12 houses currently on the market that meet our imagined budget and requirements that don't look like they need torn down and rebuilt. I suspect this number to rise with time though, as I'm of the belief we're nearing another housing bubble pop, just from things I've seen locally that make no sense to me, and the stagnation of the local job market.
3+ bedrooms, 2+ baths, garage or ability to build one, minimum 1/2 acre lot, with a price cap of $125k. Not quite needle in a haystack, but not as prevalent as I'd thought either. Gas would be a huge bonus.
I think it's a good plan to continue to save, get a clearer financial picture, and continue to monitor the local market to get a better feel for what's available and what something that you want might sell for. We took a couple of years actively looking at homes in our area before buying. We had a stable living situation and a patient realtor that allowed us to be patient and really shop around without pressure. It sounds like you might be in a similar situation, so don't let yourself feel rushed. It's likely to be the biggest, most expensive purchase of your life so the less emotional you can be during the shopping phase, the more likely you are to end up with something you're really happy with. I think we walked through 48 houses by the time we were done, and put offers in on more than half a dozen that didn't work out for whatever reason. But we really knew what we wanted by the end, and that had changed some during the search too.
In reply to RevRico :
I suspect those are hot water baseboard radiators and the big box in the basement with large cast iron pipes coming out of it is a boiler. So not gas baseboard but hot water radiant heat.
Good luck in your hunt! I both love and hate house shopping. I do it almost as much as I shop for cars, but obviously buy far fewer houses. So far. ;-)
In reply to RevRico :
Good plan.
Foreclosures can get financing depending on the situation.
If you end up pursuing something look at a Homestyle loan or a 203k loan. They have certain requirements as to what will need to be fixed and what they will finance for repairs. We ended up with the a foreclosure using the Homestyle loan and it ended up working out well. We bought at a "good" time at the front end of the current upswing and are probably sitting on 100-150k equity vs maybe 50k if it had been move in ready. Plus we got the renovations done that we would probably have wanted to do in most other homes.
Not saying it's a great idea or feasible in your case but something to look into.
If you can afford it, the math says a 30 year mortgage is generally a better financial deal if you invest the difference, but the emotional value, and the fact that most people don't invest the difference, indicates that you should probably sign up for a 15 year instead.
Popping this thread back up because stuff happened today. Dana talked to her dad. He will gift us the down payment, and then have us pay him back for the mortgage. I wasn't there for the conversation, and I have a bunch of questions, but this does help us out to a point.
I don't know how this will work for a foreclosure. At all. I suspect he'd have to just cut a check, which he is in a position to do within reason, but I don't know how this could play to a Homestyle loan or 203K or anything else more "traditional".
His stipulations are, he has a preferred school district, and that we pay him back over time. If this is anything like Dana's car or her brothers house, we'll be giving him money every month then he'll be giving us a check when it's paid off. Not counting on it, just stating his history with such things. The school district he prefers, because when he was a student there 60 years ago it was a great district. Well, it's a E36 M3hole now, I'm fairly certain I'm not allowed on district property, and the housing options are either row houses or mcmansions, so he's going to have to accept that it's not a viable option.
But this means the house hunt is officially on, instead of just us looking around. There just isn't a lot in a price range we feel comfortable with that isn't a foreclosure, or auction, or needs a total overhaul.
The house and shop this thread was started over is still available though, so maybe, even being a foreclosure, we both really like it, it doesn't need a ton of work, the school is decent, the town is decent, and that freaking shop is a thing of dreams.
I have mixed feelings on the whole thing. After my family turned out to be a bunch of selfish miserable uncaring lying cheating vajajays whom I dream of watching be disembowled and fed to alligators, I'm of the opinion we should take whatever is offered to us for our kids sake while it's being offered, but at the same time, I don't really want "I bought your house" hanging over my head for the rest of my life. Considering I met him for the first time the day my child was born, I fear that, but he likes me, way more than any of her past boyfriends or her oldest childs father, so I got that going for me.
But I guess it's a step in the right direction, I just don't know where to go from here.
In reply to RevRico :
I know where you're coming from. Mom's "family" dropped us like a bad habit when her sperm donor realized he couldn't milk our business for any more money when he stole so much that it put it under. Now I'm married to someone whose dad likes to give or be the family bank. "I'll buy your car you can pay me" kinda stuff. I'm not onboard with it because money and family or friends never need to co-mingle. But sometimes it's tempting. The most I've ever let him do was front me a couple hundred dollars to snag something off craigslist when we're up at his place.
the other caveat borrowing from non real lending institutions is you get zero credit benefit. Experian doesn't know you paid your mom back for your car, but they do know you paid a bank back for it. I had a dismal credit score 10 years ago not because I didn't pay my bills, but because i had one $300 limit card for emergencies and never used it. Now have an 829 score and I can get pre approved for a Hellcat Charger and an R/T for a winter beater. Gotta build it somehow.
Having been to your place and knowing the lay of the land and that all your tools are damn near sitting outside, I understand your desire to move. After having bought a fixer upper because I found my garage, I'd say do it as long as you can fix enough on the house as needed or wanted to keep her happy and your daughter healthy and safe
RevRico said:His stipulations are, he has a preferred school district, and that we pay him back over time. If this is anything like Dana's car or her brothers house, we'll be giving him money every month then he'll be giving us a check when it's paid off. Not counting on it, just stating his history with such things. The school district he prefers, because when he was a student there 60 years ago it was a great district. Well, it's a E36 M3hole now, I'm fairly certain I'm not allowed on district property, and the housing options are either row houses or mcmansions, so he's going to have to accept that it's not a viable option.
I’m not sure he’s going to have to accept that seeing as he’s the bank. I’d clear that up before I looked at any houses.
Steve_Jones said:RevRico said:His stipulations are, he has a preferred school district, and that we pay him back over time. If this is anything like Dana's car or her brothers house, we'll be giving him money every month then he'll be giving us a check when it's paid off. Not counting on it, just stating his history with such things. The school district he prefers, because when he was a student there 60 years ago it was a great district. Well, it's a E36 M3hole now, I'm fairly certain I'm not allowed on district property, and the housing options are either row houses or mcmansions, so he's going to have to accept that it's not a viable option.
I’m not sure he’s going to have to accept that seeing as he’s the bank. I’d clear that up before I looked at any houses.
Yeah I’d make sure you get the school district thing figured out 100%. Pretty easy to get data to back it up.
mtn said:Steve_Jones said:RevRico said:His stipulations are, he has a preferred school district, and that we pay him back over time. If this is anything like Dana's car or her brothers house, we'll be giving him money every month then he'll be giving us a check when it's paid off. Not counting on it, just stating his history with such things. The school district he prefers, because when he was a student there 60 years ago it was a great district. Well, it's a E36 M3hole now, I'm fairly certain I'm not allowed on district property, and the housing options are either row houses or mcmansions, so he's going to have to accept that it's not a viable option.
I’m not sure he’s going to have to accept that seeing as he’s the bank. I’d clear that up before I looked at any houses.
Yeah I’d make sure you get the school district thing figured out 100%. Pretty easy to get data to back it up.
He would just prefer if we looked in that particular area is all. Actually mentioned paying to fix my current house as well, just because it's in the district. For many reasons that was shot down very quickly, starting with it really not being big enough for 4 people to live in.
As long as we find something we can live with it'll be alright, because neither one of us actually wants to live in that district. What we're seeing for sale throughout it is row houses in town, old trailers out of town, new starting at $300k developments, or houses that need to be completely rebuilt priced at finished rebuild cost. Turns out a lot of the neighborhoods that kids I went to school with lived in have almost all been redeveloped.
Our real problem, county wide, is wanting land with the house. If we could build, there's cheap land, but anything with a house already on it is priced pretty high regardless of the state of the house. This gives me hope for when the time comes to sell my current house, but it's pretty disheartening to see as a potential buyer.
As far as schools and taxes go, most places are about the same. The really good schools are priced way out of our range or are private, but the really E36 M3ty schools are nowhere near where we want to live, so it evens out. Honestly, the PA cyber charter school is a pretty great program, and a free option we can consider as well.
Right now though, this shop with house is the front runner. Decent school district, low taxes, no permits required for anything but new construction, a nice town we both like that has a maker space opening in January, and aside from a gas line for the stove, all the work it needs I can do mostly by myself. It's just a foreclosure.
But the majority of what we are seeing for sale are foreclosures, and in a lot worse shape or worse area.
RevRico said:But the majority of what we are seeing for sale are foreclosures, and in a lot worse shape or worse area.
I'd be anxious about that. Housing is strong in most places and we aren't in a recession, if the area has a lot of foreclosures, it would make me nervous to invest money in a neighborhood that may worth the same or less in 10 years.
So currently the housing is you live with your mom and daughter. Your significant other lives with her mother and daughter. Your house is too small for SO and teenager to move in even without mom. How about her house? Move her mom in with yours and you guys use that house.
Just throwing it out there there there are many ways to skin a cat.
**I like the house with the shop, that's a shop I'd never leave if it was mine.
Yikes. Lots of red flags.
IMO, you aren't in a financial situation to buy. If you are a true handyman hero, you can borrow your way into a second job (renovating your own house), but be prepared for it. Not just "I'm going to do a few things to the house", but "this is my 2nd job for 40 hours a week. For a long time". Also, you still need at least some cash on hand to facilitate this, and once a real family comes along, your time to do these things will be more limited. This will be draining on your mental and physical health. If you own in an area where values drop and don't have the resources to 'take the hit', it will be draining to your wallet as well, and possibly a really long term impact.
I see a lot of discussion of shops. In my experience, shops are cool but add near-zero value to the home on the market (and are often a liability). So any money you may need to put into a shop is basically money lost. You won't get it back at the time of sale, it wont count in your favor when its assessed.
Renting for double the price of the mortgage is not a bad deal when you factor in the taxes, insurance, upkeep, etc. involved with homeownership.
Owning a house has been a great learning experience for me, but I don't want to do it again unless its on my terms.
ProDarwin said:Yikes. Lots of red flags.
IMO, you aren't in a financial situation to buy. If you are a true handyman hero, you can borrow your way into a second job (renovating your own house), but be prepared for it. Not just "I'm going to do a few things to the house", but "this is my 2nd job for 40 hours a week. For a long time". Also, you still need at least some cash on hand to facilitate this, and once a real family comes along, your time to do these things will be more limited. This will be draining on your mental and physical health. If you own in an area where values drop and don't have the resources to 'take the hit', it will be draining to your wallet as well, and possibly a really long term impact.
I see a lot of discussion of shops. In my experience, shops are cool but add near-zero value to the home on the market (and are often a liability). So any money you may need to put into a shop is basically money lost. You won't get it back at the time of sale, it wont count in your favor when its assessed.
Renting for double the price of the mortgage is not a bad deal when you factor in the taxes, insurance, upkeep, etc. involved with homeownership.
Owning a house has been a great learning experience for me, but I don't want to do it again unless its on my terms.
Agree with the red flags...
With the investment you're able to make, are you sure that you should be holding out for a shop? Are you going to have time to do anything in the shop with the renovations that you need to do?
ProDarwin said:Yikes. Lots of red flags.
IMO, you aren't in a financial situation to buy. If you are a true handyman hero, you can borrow your way into a second job (renovating your own house), but be prepared for it. Not just "I'm going to do a few things to the house", but "this is my 2nd job for 40 hours a week. For a long time". Also, you still need at least some cash on hand to facilitate this, and once a real family comes along, your time to do these things will be more limited. This will be draining on your mental and physical health. If you own in an area where values drop and don't have the resources to 'take the hit', it will be draining to your wallet as well, and possibly a really long term impact.
I see a lot of discussion of shops. In my experience, shops are cool but add near-zero value to the home on the market (and are often a liability). So any money you may need to put into a shop is basically money lost. You won't get it back at the time of sale, it wont count in your favor when its assessed.
Renting for double the price of the mortgage is not a bad deal when you factor in the taxes, insurance, upkeep, etc. involved with homeownership.
Owning a house has been a great learning experience for me, but I don't want to do it again unless its on my terms.
All of this, 100%. We will hopefully be looking a bit out of town in a few years and would love to have a shop. But basically every single property I've seen the last year, I immediately think:
"I wouldn't have put that shop THERE, why did they do that?"
"This layout is weird, do they have something against electrical outlets? Insulation?"
And on and on.
mtn said:Are you going to have time to do anything in the shop with the renovations that you need to do?
I'll answer this. No.
ProDarwin said:mtn said:Are you going to have time to do anything in the shop with the renovations that you need to do?
I'll answer this. No.
This cannot be emphasized enough. Especially not with younger children involved.
ProDarwin said:mtn said:Are you going to have time to do anything in the shop with the renovations that you need to do?
I'll answer this. No.
I'll answer this for me, since it was aimed at me: Yes. I have nothing BUT time. And I am sure as berkeley NOT paying to move somewhere where working on cars/projects/etc is more difficult and annoying than it is here. That's just not going to happen, period, and if it must be the case then I will stay in my current E36 M3hole until it completely collapses around me.
I can and do work anywhere with an internet connection. That also comes with the stipulation of actually needing space to work, which would be a shop. Buying a house that already has one and renovating it for my needs is considerably cheaper than buying or renting commercial space, as well as providing a place to, you know, live. Will making my business work around fixing the house be difficult? Sure. Impossible? Far from it with proper organization. Not like I haven't been playing this balancing game my entire life anyway.
We can afford $12k year as a payment, while still covering taxes, utilities, living expenses, and building an emergency fund. We're looking at houses that we'll be able to pay off inside of 10 years. That leaves a E36 M3 load of time after the house is taken care of to make use of everything else, without having to dump the enormous sums of money building the accessories.
Don't have time to work in the enormous shop after all? Fine, rent out the space for off season car or boat storage and let it be is its own business at that point.
It's been pretty much decided, through her insistence to speed this process up, that this actually will wind up our house, if it's still on the market near the end of the month when we see her dad again. It needs about 2 months and $10k to be a good livable house, and we won't be moving (anywhere) until the end of the school year in June, which leaves plenty of time to find and fix any problems not immediately visible or known about.
I don't see the big deal about it potentially losing value. It's not a flip, it's a permanent house. Maybe down the line we decide to leave the state or something, after the kids are done and grown with school. Please, get out your crystal ball and tell me what prices will be like in 18 years when my daughter graduates college, because I don't see anything happening before then, and any speculation between now and then is just speculation. If it was a flip or going to be a rental, I could understand the concern, but when looking for a permanent home, I really don't, especially when it will be paid off from the get go.
It needs appliances, plasterr work, flooring, and paint. According to the company in charge of maintaining it, it has no active electrical fires or plumbing leaks. The roof is roughly 5 years old, the Windows will eventually need replaced, the rear deck roof needs replaced. Nothing big, expensive, or time consuming. No signs of termites in the wood, no glaring foundation issues, and not at the bottom of two hills.
Comparatively, discounting the houses where the neighbors could hear us having sex because neither of us wants to live that close to anyone, it's in great shape versus everything else. No wood paneling that needs replaced, no signs of massive holes in the roof or foundation, actual room in the kitchen and bathrooms to turn around and get some stuff done, and room to park without being right on the side of a road.
RevRico said:I don't see the big deal about it potentially losing value. It's not a flip, it's a permanent house. Maybe down the line we decide to leave the state or something, after the kids are done and grown with school. If it was a flip or going to be a rental, I could understand the concern, but when looking for a permanent home, I really don't, especially when it will be paid off from the get go.
"Men make plans and god laughs" and all that.
5 years ago, I was happily married with a well paying job, an affordable home on a 10-year note, with 3 vehicles still putting $1k+ per month in savings after all expenses/401k, etc.
4 years ago, I had been divorced, laid off twice, moved 3 times and lost a good chunk of savings/401k in the divorce.
What if you get offered some really awesome job, but can't take it because you know you could never break even on selling the home? I'm just saying, things change, and saying "You can't predict the future," is not an adequate way to be prepared for the future.
"Please, get out your crystal ball and tell me what prices will be like in 18 years when my daughter graduates college, because I don't see anything happening before then, and any speculation between now and then is just speculation."
Obviously no one can, but you basically dismiss any caution as speculation, while also speculating NOTHING will happen in the next 20 years that may change your situation. Seems an odd juxtaposition is all.
RevRico said:especially when it will be paid off from the get go.
Wait, you're buying it in cash?
z31maniac said:RevRico said:especially when it will be paid off from the get go.
Wait, you're buying it in cash?
Yeah, he's getting a low interest loan from the bank of would-be FIL if I'm reading it right.
z31maniac said:RevRico said:especially when it will be paid off from the get go.
Wait, you're buying it in cash?
No, GF Dad is lending him the money, or said he would if they bought in a certain area. This house is not in that area, and RevRico does not want to live in that area, but the guy with the money will just have to accept that.
The way this will play out is the guy that made the offer will somehow end up being the shiny happy person in a month when he decides he does not want to lend money for a E36 M3 hole that Rev is now convinced is "perfect", wait and see.
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