Monday, September 08, 2014

Still going...

I was listening to Dave Ramsey a few weeks ago and someone had written in with a question about whether flipping houses was a good way to make some money on the side.  His reply?

He said there are three rules in real estate... (paraphrased)

  1. It will cost twice as much as you think it will...
  2. It will take twice as long as you think it will...
  3. YOU are not the exception...
I'm not flipping this house.  We're remodeling it to live in it.  And yet, this encapsulates my life lately.  Our original remodeling budget was blown out of the water.  Well, not "blown out of the water," but definitely more than we thought we would spend.  

We're delaying the AC installation until after we move in to help cash flow that expense. In a rare occurrence, procrastination has paid off!  The energy efficiency rebates offered by our city are doubled starting 9/1, so we'll get a rebate of close to $1,600!  Very exciting!

I've been my own general contractor and it's been fun, but a little stressful.  There are so many details every day!  Thank goodness I've been working part-time since May. It's given me plenty of time to meet with plumbers, electricians, inspectors, and and and!  It's rapidly coming to a close and I can't wait.  I'm ready to just chill out.

But it's good.  While packing, I found a card from my grandfather that he sent when I bought my first house in 2000.  I read it aloud to the new Jason and then filed it away and pretended that he sent it to me for this house too.  

Pictures to be posted soon!  This was rather disjointed, but it's the update. 

Wednesday, June 25, 2014

In Escrow

After months and months of searching, we are finally in escrow!  And, because I'm a procrastinator, we're actually almost all done with escrow.  We should be signing all the docs on Friday, the loan will fund Monday, and then it should be recorded Tuesday, July 1st, aka: The Day We Become Homeowners!

It's been a really bumpy road getting here, but I'm happy to report that since entering escrow with this home, everything has been going relatively smoothly!  No crazy real estate agents or weird sellers.

When we started looking, I told Jason, "I'd love to buy a house in Burbank..."  I didn't expect it to actually happen because:  (a) homes in Burbank are typically a tad bit more expensive than other areas, (b) the ones that are for sale (in our price range) are what we affectionately call "Frankenhouses" due to the illegal, weird room additions, and (c) the market is so crazy, we never expected to actually win a bid in such an in-demand area.

Well, what I thought would never happen is happening.  We are almost owners of a home in Burbank!  It's a 3 bed/2 bath house in the flat part of Burbank.  It's about 1,800 square feet with a spacious 2 car garage in the back.  And in true SoCal real estate fashion, it needs some cosmetic work, plus central air.  The sellers have lived in the house for the last 40 years without air conditioning.  Shocking, really...

We have a long list of things we'd like to do.  Once we get keys next Tuesday, we'll have to go and figure out what we "need" to do before we move in.

Here's a picture of the front of the house:

More to come!

Wednesday, February 26, 2014

Buying a House in Los Angeles

We've been considering buying a home in Los Angeles.  Actually, more than considering... we looked for a few months last fall, bid on a couple houses... one we really wanted, but didn't get.

Here was the situation:

The home was listed for $599K.  We really liked it and knew that they already had multiple bids, so we bid $631K.  The sellers put out multiple counteroffers for $640K, with the add-on of removing the appraisal contingency*.  We responded to the counter accepting the increased price and agreeing to pay up to $20K over the appraisal price in cash, if the home didn't appraise for $640K.  Well, the sellers ended up going with other buyers.  Who can blame them?  They chose the buyers who had ALL CASH.  Crazy.  Who has $640K in cash lying around to buy a house?  I can only assume people who just sold their own homes in this crazy market... And this is a fairly typical scenario in the Los Angeles housing market the last year or so.

After that, Jason's job was a little tenuous and we knew there was a very good chance the company would run out of money (being a fairly new start-up).  So, we took a break during Christmas to re-think everything.

And now we're back.  Starting to look at houses again.  When we're at these open houses, we see kids younger than us (get off my lawn!), browsing the same houses we are and I think to myself, how can they even afford this house?  We have a good down payment saved up and decent paying jobs and even then, we're like "wow, this is going to be a stretch!"  I just don't know how they're doing it.

I'm so tempted to stay in our apartment.  I have the added bonus of being the apartment manager and only paying $950 in rent!  So it's hard to imagine going from that to over $3,000/month with the mortgage, taxes and insurance.  I keep crossing my fingers that a 2 bedroom will open up in my building and allow us to move within the building (keeping the building manager discount).

As it stands now, we're looking.  It took almost three months last year to find one we both really liked, so who knows how long it will take this year.  We can bide our time, waiting for the right home to pop-up.  Or maybe that two bedroom apartment will open up... :-)  Either way, I'm going to enjoy my below-market rent while I can.

*Side note:  The appraisal contingency is there to "protect" buyers from overpaying.  If you bid $900K on a house worth only $500K, you can use the fact that it didn't appraise for enough to either back out or renegotiate your deal with the sellers.  And if you're financing the home with a mortgage, then you're pretty much stuck because the bank isn't going to lend you more than the home is worth and not getting financing is definitely a way to back out of a real estate deal because there are usually financing contingencies as well.