mick1

Benjamin Franklin once said in bad times, a man can only count on three things: an old wife, an old dog, and cash

Brav

I had a working relationship with a builder out there. They were more than happy to sell to me at the time.. even negotiated a 22K discount. The rest were resale But I didnt have to finish it out w/landscaping and window treatements, etc.

If anything, we helped drive prices up! You're welcome

However, rents are crappy

Brav

As an aside... all of this "my wife wooped my @ss" stuff is starting to get me worried. Confirming my worst fears are they really that controlling? I hope they even appreciate they have a certain standard of living.. how about a thankyou? I don't think I'd change much any of my financial reasoning because she wasn't happy with it, but mainly because I have that background. Situational, I'm sure.. but dang. My mother sure does point my father's where ever she wants. Life is a compromise

CE750

22K discount? That must have been a long time ago... There's no discounting of anything now. In fact there are 30-60 families per/lot and lotteries are the norm, with lot premiums from $10K to $150K per house. When I bought the 3 houses, there were no premiums on most lots, and the earnest money was $5K or so.. now it's $25K

Rents do suck, because of all the investors trying to cash flow their houses.. but the reality is, and I don't have any tenants in any of my houses, the two years you hold them will cost you a fraction of the return the house will make, and with no head ache of tearing up the carpets, interior, etc.. I am not interested in being a land lord, just taking advantage of a hot real estate market.

CE750

it's like this... Had the money to buy our current house come from my family inheritance, I would have had more "weight" in the matter. But it was (to be fair) her family's estate that paid for it, and even though we're married, and she's not working (outside the home).. we don't always treat money the same way.. if I earn it thru work, we treat it as "ours" if it comes from her family or mine then we treat it as the individuals money to do as they wish... Having said that.. once the money is spent on a car or house, that item is now community property, and the house has me listed first on the title.

Make sense? Each family is different.. I have a friend who he and his wife both work and both keep totally separate books, cars, assets, 401K, etc... for me, that's not what marriage is about.

jago1244

my very recent experience is that after paying cash 10 months ago for my ride , and now thinking of trading in, i have gotten MB and non-MB dealers bids from at least 3 guys that are 30% off original INVOICE. a well-informed lease buyer can do lots better with the miserable depreciation of these cars.

Brav

It was March of 04. About 18 mos. It was a nice development in south Chandler that was still in the outskirts, 4 miles from Occotillo. Right place, right time I suppose.

Understandable - but I leveraged a bit, 20-25% down each. I'd rather have those cover the payments, and then some. For the hassle, its been worth it. Pays for my car in pos CF alone.

jago1244

see attached

Brav

haha - yes... 'tis why i'm $-ing out

guitarplayer

Isn't that the problem? You cash out....but then you have to spend that windfall just to buy the same thing all over again.

Brav

phoenix, miami, vegas, so cal, all hot markets with very high appreciation, 50-100% in some cases in 2 years or less. will buy in a more stable market, such as indianapolis, washington, NC, etc. steady 10-12% appreciation, good rents, safe bets. or pay taxes.. which i'd rather not

guitarplayer

Yes, that's the only way, problem is, our weather sucks 80% of the time!

CE750

The thing with Phoenix is there are many "fundamentals" at work here, that are not at work in many of those other markets (especially Ca, and FL)

1) Affordability index is low here... i.e. people who don't make $100,000/yr can still buy a normal new home with a conventional mortgage.

2) Phoenix (AZ in general) is the fastest growing large city in the country for the past 2 years according to my data. There are many major companies re-locating here. Example is the $2 Billion investment Intel made down in Chandler, and the $1B USAA Campus that just finished in North Phoenix, not far from where I live. There is also a $2 Billion investment from AMEX for a mirror data center for their world wide business that just went in North Phoenix.. All of those, come with net 49,000 well paid jobs... and that's just three of 13 I can list.

3) Fed projections are for the currently 3.2M population to double in 10 years. This is not the case in Cal/Fl since most of this growth is from those two states, as well as Mass, and Mich.

4) Weather here is being "discovered" The heat is over rated.. usually dry and feels much better than summer in FL, NY, TX, all except really CA. Also, the winter is great, and there are NO, repeat, NO natural disasters to contend with (Hurricanes, Earth Quakes, Tornados, etc..)

5) Taxes are low, and business loves it here. nuff said.

6) There is unlimited cheap land for expansion, infrastructure is among the best in the world (Freeway system rated above all US major cities for it's condition and quality).



Keep in mind.. I'm a Cali native, and am only siting all of this because I am a "convert" I choose to live here rather than my native Bay Area because here is where the big opportunities are. I lived in Atlanta, Dallas, and most recently SoCal and I can tell you.. this is where it is now.

As for the "real estate bubble" hell, let it happen... I've got 4 houses that cost me less than 1M paid for, and currently appraised for double that... even if we have a 30% correction (likely in SD, SF, DC) it's still gravy for me. I'm sitting on 20 acres of commercial zoned land that I picked up for $1/foot in 2001 for my family trust and now worth 5 times that (three offers turned down already) I'm waiting on the city to build the freeway exit there next year, and see the values jump by another 5 times.

Brav

You are very right about the points you bring up - I am aware of this. However, it is still amazing appreciation. I don't see a bubble in Phoenix, just a plateau in the near future. My tenant was giving me hell, so I decided to sell. Bird in the hand = 2 in the bush...

I'm very interested in land - would like to talk to you about that if you don't mind?

CE750

PM me..

khaug

Cash.

The peace and calm of being debt-free.....Priceless!

CE750

now that sounds like my wife.

does the term opportunity cost, and risk free return mean anything to you anti-debt people?

Brav

Thats kinda where I was going with my example.. 60K car > 30K car in 3 years vs 60K > 360K + free use of car... you be the judge which is smarter

guitarplayer

That's exactly why I started this post. Spending $40K-to whatever amount in cash to me seems crazy. I would rather a low interest tax ded. debt and keep my cash where I can hopefully make some money with it vs. watching my cars depreciate like water running out of a hose..

rickyfanmdr

$20,000 down and $1,025 a month for 3 years at some ridiculously low interest rate (less than Mercedes) through the Auto Club's recommended lender. I wanted the flexibility of being able to use the cash for something else if I wanted to. It will be paid off in a few months.

Spartan

My silly philosophy is that if you can't pay for the "luxuries" in cash, don't buy them. After all, no one "needs" an E-class.

I have a major concern with our "debt riding" society. As soon as a strong recession hits, it will send far too many people into the poor house. Did you know that half a million Americans declared personal bankruptcy last year? Imagine what would happen in the middle of a major recession? A while back I read that the US is approaching and by now exceeding the 20% debt to income ratio. With a ratio like that, even a mild recession could turn into a freaken nightmare.

Yup, peace and quiet of beign debt free.....

E55AMG99

Sounds like California will be on sale soon!

Brunelleschi

I whored myself out to 35 fat chics for $1,000 a piece!

Fat chics need love too.....but they gotta pay!

CE750

Spartan, your point is good, but one can then say... who needs a $1M+ home? many people don't pay cash for their luxury homes... the concept of opportunity cost is fundamental to making money. If you're worth 50 million and you pay 1M cash for a house that's one thing.. but if you're only worth 3M ... it would be less wise (my wife doesn't get this) to pay cash for the house since you could put that 1M to work making 10%+ easily while only paying 5.5% on the house.

Brunelleschi

This is how she paid for it!