All Forum Posts by: Matt Groth

until interest rates climb, dont expect a major pullback.  I would rather buy a house for 200k at 4 percent,  than a 150k house at the more historically "normal" 7 percent. I was thrilled in 2002 to buy my first house and get 6.75. Who in their right mind would lock up money for 30 years at such low rates! Now look at rates....same with cars. Nobody cares how much they cost, only the monthly payment, so 84 month loans. The only people that truly care are the cash buyers.  Who knows how long easy money lasts, but if the fed hasn't done it for the past 10 years,  normalizing becomes harder and harder.

You need to get estimates from contractors, which is harder when you don't own the properties. One of the contractors I learned from used to ask people "how much is a pound of meat?" The point being, do you want hamburger or filet mignon? Even just wall framing....i have no idea. Open concept? Walls everywhere? 8'? 9'? 1 light in each room, or recessed cans with dimmers? You get the idea.  Even if I could give you a number, I wouldn't buy a deal based on that. Good luck.

The only thing scarier than buying at the top, is buying at the bottom. Everyone says they will load up when it drops.....they don't. That's why prices drop.

Did the appliances go with the sale when you purchased? It could be in the lease, but if they were not included in the sale of the home, it is on you, but I'm not a lawyer.

There are calculators online that will compare your electric rate to fuel oil or propane. If your electric company has an off peak rate, that is usually the cheapest, but they are not without issues, either.

 I would say 1/2 to 3/4 of our heat came from the monitor. You are right, there isn't a lot of info out there. If the concern is financial, I would go with the monitor. If it is reliability,  it is tough to beat electric baseboards. Cheap to install, expensive to run. I would set up some way of notification if the temp drops in your house. If the exhaust freezes up, they can shut down, and if you aren't there to fix it, it can get cold fast! 

I had a monitor in my house for many years.  They sip kerosene, but can be finicky to operate.  With one in each unit, get a second tank, and split the cost. Very simple. The house was built in 2000, 1500 sq ft. I burned a lot of wood, but the monitor would cover when I was at work. 1 tank would last a year. NE Mn where -30 is not uncommon. Way cheaper than electric, unless you are talking off peak. If you learn all about their function, they are really good units.

When I bought my first home in 2003, I was thrilled to get a historically low 7 percent interest rate. Plug that into your home price....what you pay for the home is not the purchase price, it is the price over time. Very few homes go down in value over a long time frame. If you are looking at a 200k house at 4.25 percent, and then wait to get a sweet bargain at 180, but rates have moved up to 5.5, you cost yourself about 15 k over the life of a 30 year loan. Lock in the rate! Someday I am going to write a post on this. No one says they shouldn't buy that 40k new car, when you know for certain you will lose 20k in 2 or 3 years. In general, home purchases are very safe in comparison.

I, too, would be nervous about the balloon. If the financing is tough now, I can't imagine it will be easier in the future. Also, if I were the seller, I wouldn't allow you to subdivide. What if you sell half if the average, take the cash, and stop making payments? My primary I sold last year is in a sled dog neighborhood.  I ran dogs for 18 years. It's a tough sell, except to the right person. Speaking from experience, I would keep boarding your horse, and buy a primary as close as possible. Times will change, and you will want something different. I love winter, and loved sled dogs, but it was time to move on, and seeing palm trees in January is better than I would have guessed. Liquidity is a very valuable thing, and you won't have it with a property like this. You think you will always be there, until some opportunity takes you to Kentucky, or Montana, or wherever the hose riding is even better. 

I look at it a bit differently. The first flip we did, which was our first move in rei,  I tried to plan for every possible outcome. We could sell it, rent it, move into it, etc. That was my preferred order. I didn't have tv at the time, didn't know about bigger pockets. I bought a book, and had been building houses for 15 years. All of that was plan A. To me, plan B is trading bitcoin. In football, each play is a plan, but there are different options, depending on what the defense gives you. I am a firm believer that you need to focus on a plan A, and then decide how to best play to your strengths. The part I struggle with, as I am persistent to a fault, is the line between persistence and beating your head against a wall.