Beware, or I'll eat you alive.

Monday, April 6, 2009

Changes and Buying Things~~~~

Well Sweet Things, I’m back.

And I think I need to ‘splain myself.

I had remarked to dear Sweet Fram things about change and moving and such, and it seems that I received inquires here on my blog, from Mean Kitty and others, as well as a question by Fram, why was I moving or changing?

Well Sweet Things, it’s not so much moving as it is investing. My own home is almost paid off, and with interest rates being so low I began thinking (gently encouraged by Fram---you little devil, you ***smiling ;)*** ) that purchasing property would be a good thing about now, of course it depends on where and how one purchases it and for what reason.

I am of the belief that things will take a turn for the better, of course first the stock market has to improve then the economy and then finally joblessness will start going down ward and when that happens, spending goes up and so does the interest rates.

But now is a good time, as much as I would like to buy in Santa Cruz or by the sea, the values haven’t gone much lower in the areas where I prefer, but there are some areas where one can find bargains.

I took a few days off and went into the Gold Rush Country having made an appointment with a reputable and well recommended real estate agent to look to purchase some property, Fram you are right, the time is perfect now with the much lower interest rates and although it’s harder to get a home loan one can still find them.

I had been looking for a while in listings in the Sierra Foothills, granted with drought conditions and worries about wild fires perhaps the Sierra Foothills is not the best area to buy, but it is the most affordable. And I was looking really for a place to both rent out for vacation rentals and make an income with as well as an investment that will increase in value (as all things must) and eventually make a profit from should I decided to sell when the time is right. Or given that I can be a bit of a “changeling” eventually move to if I should decide to just ‘chuck it all’.

And if I should decide to do the latter I can always rent out my home here in the Bay Area and make an income from it as well.

I’ve been thinking about this for a long time, and now is the time to make my move to purchase.

This last weekend, I narrowed it down to two properties, both were very, very affordable, and fortunately both were and are handled by the same agency.

So I bought both!

Alright Sweet Things, why both---well I just couldn’t make up my mind!!! Simple as that!

The first property is in Merced, yes, at the gateway to Yosemite, a very simple ranch style board and batten house, two bedrooms 1 ½ baths, rustic but with modern plumbing, on one full acre, currently it’s being rented by a family that has resided there for the last 8 years, the husband was out of work for 6 months and finally got another job, they had hoped to buy the house but were not in a position to, but I talked to them and we’ve agreed to continue on with the lease that is in place (I’m over simplifying) they have kept the place up in great condition, and they plan to continue to live in the area until they are in a position to buy their own place, but that may take time and I know from the previous owner that they are excellent tenants so I’m not in a rush to have them move, and I don’t think they are in a rush to leave.

The second property, well this had a sad story which I was able to give a happy ending, the agent put me on to it. It’s within a short walking distance to a historic gold rush town (sorry, I do need to keep the location private) lovely old Victorian built mid 1870’s, owned by the same family since then, but now the people who own it made the mistake of taking out a very high interest HELOC to do repairs, well repairs done but they were only paying the interest on the HELOC and were planning to renegotiate the terms but the husband was stricken with congestive heart failure, and is now on disability, the wife works and they are able to make the interest payments, but they were not in a position to re-negotiate, they were having a hard time paying the outstanding medical bills and were afraid they were going to lose the family home.

I talked to them, they are both in their early 50’s and have no children, so when they die there will be no one to inherit the house, but they are also afraid of being out on the street, they agreed to sell me the house for the cost of the HELOC plus a little extra to pay off the balance on the medical bills, and in turn would pay me rent and keep up the place for me.

And with the much lower interest rate the amount of the rent will cover everything and it’s more affordable for them, they no longer have to worry about insurance, property taxes, the painful HELOC or medical bills and they know that the house with the original furniture will go to someone who will appreciate it when they pass on and they can live there for the remainder of their lives. They’ve also agreed to keep one bed room and full bath just for my use when ever I plan to stay there when I want to get away from the Bay Area.

I had wondered about why they didn't consider a reversable mortgage, but it turns out you have to be 62 and older to do that, they were too young. And they were worried that the house would be torn down and modern condos put up. Just would not do.

So with what it would cost me to buy a house in the Bay Area in poor condition, I’ve been able to negotiate purchasing two income properties in very good condition, with the income from both to cover the payments, insurances and taxes, plus a bit extra to cover other things, and have two very good tenants residing in them.

Of course I’m over simplifying, the whole process is more complicated, but that’s it in “a nut shell”. So the changes for me was thinking and purchasing income investment property, a greater financial security, looking towards the future and a place to go to should I feel the need.

But that will not stop my “foot-looseness”, if I want to just get up and go for a weekend I can, I have to admit that going into the Sierra Foothills, with flowers blooming, and all that fresh greenery was very refreshing, seeing different places, talking to different people, feeling a different pace of living. It is a start.

I don’t know if in the end I’ve done the right thing, but something tells me that I have, so if one is going to think or do changes, one has to start somewhere, right or wrong, one does have to start somewhere.

And Fram, thank you for the compliment on my changes in writing style, I know that this is not like the other two, but…well…one does have to try things and see what works. And I am glad that in some way my Web Log encouraged you to do your own, I do enjoy reading yours as well.

Now it’s a very warm evening, and I’m tired from driving, but Lillian is coming over later with Coffee Ice Cream, and I cannot resist Coffee Ice Cream, with walnuts. Mmmmmmm.


TheChicGeek said...

Congratulations, Diva! Sounds like you are a very smart business woman. Anything near Yosemite is stunningly beautiful. Wishing you well :)

Fram said...

You are going to end up a land baroness with gold dining plates on your table, Diva. Just remember, a mixture of elements is necessary to ensure a happy ending to your story. But, I guess I am sure you know that only too well.

It sounds like you are making some good choices/decisions regarding property acquisition.

You are pulling ahead of me in property, especially if you consider California values compared those in this region. I'm still ahead of you in states, though. I own some property in three. Also, in case war breaks out, I do have a spare room in my bunker should you need to run for cover. There are ample firearms on site, but you might want to bring a fishing pole. Teasing (sort of).

There's every reason for trying different writing styles and using varied elements with these blog pages. My idea is to have fun with them, mostly, and I prefer to range all over the place.