More Old Guy Advice

[bl]

Hey all,

my poker advice has been lagging with all the other stuff I've been dealing with so let me just hit you young ones up with something Off Topic style.

Do yourself a favor and learn about Real Estate. Do lots and lots of homework before you buy something and by all means do NOT pay more than you should.

I've done 2 deals in my life so far and the amount of money i've made/saved is ridiculous.

Here's my quick rules. Find a seller who HAS to sell. There are a million reasons why someone would have to. I bought my first place off a guy who had been renting his place for 2 years and didn't want to pay the cap gains taxes. By agreeing to close in 30 days I murdered his asking price.

On the house we just bought it was an old lady who lived there and her kids finally put her in a home. They needed the money and (lead into point number 2) the house needed work.

As a general rule people HATE to do work to a house. If you told them to their face. "It will cost you 20k to fix this house and it will be worth 100k after" they wouldn't care.

The last point? negotiate the hell out of them. Maybe it's because I just love to negotiate but this is such a no brainer to me. Get in there and fight with them! My agent flat out told me that there was no way the sellers would consider my low ball offer when I started this process. We close at the end of April baby. (agents are scared to piss off the other agents by the way)

cliff notes: buying a house will be the most money you ever spend on one thing. put effort into making yourself educated about your decision.

Anyway the house will be empty for 2 months while I remodel the kitchen. I might have to throw the poker table in the living room and get a game or 10 in during that time........

[biggle10]

Going through buying a condo now. I fucking hate managing money. I guess its good that I have money to manage, but its a headache sometimes.

[LadyWrestler]

Hey all,

my poker advice has been lagging with all the other stuff I've been dealing with so let me just hit you young ones up with something Off Topic style.

Do yourself a favor and learn about Real Estate. Do lots and lots of homework before you buy something and by all means do NOT pay more than you should.

I've done 2 deals in my life so far and the amount of money i've made/saved is ridiculous.

Here's my quick rules. Find a seller who HAS to sell. There are a million reasons why someone would have to. I bought my first place off a guy who had been renting his place for 2 years and didn't want to pay the cap gains taxes. By agreeing to close in 30 days I murdered his asking price.

On the house we just bought it was an old lady who lived there and her kids finally put her in a home. They needed the money and (lead into point number 2) the house needed work.

As a general rule people HATE to do work to a house. If you told them to their face. "It will cost you 20k to fix this house and it will be worth 100k after" they wouldn't care.

The last point? negotiate the hell out of them. Maybe it's because I just love to negotiate but this is such a no brainer to me. Get in there and fight with them! My agent flat out told me that there was no way the sellers would consider my low ball offer when I started this process. We close at the end of April baby. (agents are scared to piss off the other agents by the way)

cliff notes: buying a house will be the most money you ever spend on one thing. put effort into making yourself educated about your decision.

Anyway the house will be empty for 2 months while I remodel the kitchen. I might have to throw the poker table in the living room and get a game or 10 in during that time........

On Topic:
Agree with everything you said! In addition to that, if you can come up with cash (ie: no mortgage needed), you can often negotiate the price even lower.

I got a GREAT deal on the home I live in because of being able to do that with a motivated seller who was willing to hold a mortgage: Negotiated 30% off the asking price (which was exactly at the appraised value) by offering to produce a large down payment; then negotiated 30% more off that by offering to produce a bank cashier check for the full amount at settlement. End result was I snagged the home for 49% of its appraised value/asking price.

Off Topic:
Re: "More Old Guy Advice"
Old Guy??? {{{Gulp! }}}

[frogbs]

You should take the same principles when buying a car. I got a car that booked $3500 for $1700 cash and $200 in maitenence. It is surprising how many people just buy cars haphazardly without putting more than an hour or so of thought into it...

[poormanbilly]

This is interesting because I just started thinking about getting a 2nd house. Let's hear some more advice from you guys. Do you "flip" stuff or rent it out?

[bl]

PoorManBilly,

Sorry it took me awhile to get back on this. We're closing April 30 so I've had a ton going on.

We didn't flip our condo per se we just upgraded it gradually while living in it to make it a more attractive rental. Basically we found a place in a desirable location we knew we could live in for awhile. We saved up and put a washer/dryer in first, then when we had built up some equity we used a home loan to redo the kitchen.

We had planned on staying here (it's a 2 bedroom) with our son for a few years until my wife got pregnant again (oops, I mean thank you, thank you) so we decided it was time to move.

I put a craigslist ad out there at a price I thought was 200 bucks high and got a TON of responses. Residents as Mass Gen, Grad students, Lawyer couples. I had it rented in 3 days to a young couple who are both lawyers and just need to be able walk to work. ship it.

So now we got a new place and we're going to do the exact same thing. I negotiated the price waaaay down knowing it needed work. I re-open the home credit line, redo the roof, replace the wallpaper, throw in a new kitchen (i'm practically a pro at now) and bang, I have a house worth 100k more than I paid for it. wait 5 years, sell it and upgrade to a bigger house should we choose to go for kid #3. (that's a whole other discussion by the way, thoughts?)

It's a lot of work but it poker terms it's just like playing tight and letting the fish get antsy and make bad decisions. Research and patience are key and you need to be able to pull the trigger when you see the right place.

Home equity is a fantastic investment if done right. On the flip side rent is the worst expense you have. I know it's unavoidable at a time in everyone's life but it's just throwing money out the door when interest rates are as low as they are.

There's my follow up old guy advice. For the truly curious my condo is in Boston's Beacon Hill. Someone is going to pay me $2,250 every month to live here.... CHA CHING.....

One other piece of advice. I'm sure you have craigslist wherever you are. Call all the people who have places to rent and ask to go see them. Go see open houses every weekend. Honestly it's kind of fun and within a month or two you can start to realize what a good buy and terrible buy is. Most people just wait till they want to buy then start looking. Not good.