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bluering
Trad climber
Santa Clara, CA
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Topic Author's Original Post - Sep 29, 2016 - 07:44pm PT
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Just scored a house in South San Jose for 550k. It's no gem, but it will be made to be a proud residence.
Life just may be good!
You'd have to understand this market to understand my situation.
Pretty good deal. Listed at 565, we took it at our peak value of 550k. This should be a done deal. Unlike the last one, we got f*#ked at the last second!
Mind-blowing. Half a million on a house in South San Jose.
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zBrown
Ice climber
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Sep 29, 2016 - 07:47pm PT
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I'm glad for you bluering.
First house I ever bought (and it's not like there have been a lot) was a partnership. Come to think of it so was the second.
I would imagine you got a much better interest rate than I did.
Thanks to Carter and Reagan (by far the highest rate I've ever paid).
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rottingjohnny
Sport climber
Shetville , North of Los Angeles
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Sep 29, 2016 - 07:47pm PT
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Does that include the cockroaches...? congrats...What part of San Joser...?
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ontheedgeandscaredtodeath
Social climber
SLO, Ca
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Sep 29, 2016 - 07:48pm PT
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Congrats! No easy feat in the bay area / silicon valley!
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ruppell
climber
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Sep 29, 2016 - 07:49pm PT
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Congrats man. Remember all that free time you used to have in a few months. It's still worth it though. lol
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bluering
Trad climber
Santa Clara, CA
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Topic Author's Reply - Sep 29, 2016 - 07:49pm PT
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My wife did observe cockroaches! Good question!
Estate sale house has been sitting. It will be cleansed.
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i-b-goB
Social climber
Wise Acres
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Sep 29, 2016 - 07:52pm PT
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Cool, congrats, as long as it doesn't belong in The Beautiful Decay Thread!!
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Flip Flop
climber
Earth Planet, Universe
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Sep 29, 2016 - 07:54pm PT
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Yer gunna die
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bluering
Trad climber
Santa Clara, CA
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Topic Author's Reply - Sep 29, 2016 - 08:01pm PT
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Remember all that free time you used to have in a few months. It's still worth it though. lol
I've been dying for this slowly. After I quit drinking I had visions of this with all the energy you get when you don't drink.
I've been waiting for this little blessing. I'm not sure anyone can understand what this will mean for me and for my future life. It changes everything. For the good!
I have been very blessed in my life, but this is huge for my family.
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survival
Big Wall climber
Terrapin Station
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Sep 29, 2016 - 08:09pm PT
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Congratulations Blue!
Now get to work with what was left of your free time!
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bluering
Trad climber
Santa Clara, CA
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Topic Author's Reply - Sep 29, 2016 - 08:16pm PT
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I'm on it, Bruce! My Guitar/Woodshop workspace is going to find a new, better home.
Buying in winter is good! I'll be in climbing shape in Spring!
My new pad is not far from Guadalupe Rocks, they will get immediate reviews. I hope they've been upgraded! I have other work to do.
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Edge
Trad climber
Betwixt and Between Nederland & Boulder, CO
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Sep 29, 2016 - 08:19pm PT
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Well done!
Enjoy your new adventure, but don't let it overwhelm. All work and no play leads to resentments which are best avoided. Good luck!
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SC seagoat
Trad climber
Santa Cruz, Moab, A sailboat, or some time zone
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Sep 29, 2016 - 08:25pm PT
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Congrats!
Susan
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bluering
Trad climber
Santa Clara, CA
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Topic Author's Reply - Sep 29, 2016 - 08:27pm PT
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Yeah, Edge, I get it.
I'm rock'n'roll, the wife is country. After 11 yrs of marriage we know what we both want.
We got it! it's good.
Bottom line? With rent rates at their current levels, you could be paying a similar mortgage rate payment, WITH A GOOD DOWN PAYMENT.
If you have a 401K, borrow 50k from your account for a down payment. That's a 150 dollar monthly payment on the loan.
If you have CO-BUYER (partner/wife), you have a place easily. Somewhat.
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Reilly
Mountain climber
The Other Monrovia- CA
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Sep 29, 2016 - 08:46pm PT
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It's not a good idea most of the time to 'borrow' from yer 401K. You'll be
heavily penalized by the IRS plus your house isn't going to make nearly the
return on investment your 401K is.
That said, best of luck!
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WBraun
climber
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Sep 29, 2016 - 09:13pm PT
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What's so sad is that house probably originally went for 10 grand ....
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this just in
climber
Justin Ross from North Fork
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Sep 29, 2016 - 09:15pm PT
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F*#king a Steve. Happy for you.
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apogee
climber
Technically expert, safe belayer, can lead if easy
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Sep 29, 2016 - 09:23pm PT
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Congrats, bluering.
The only regret I had in not buying a home was not doing it sooner. Hopefully you'll find the same.
Now the work (and the fun!) begins...
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Studly
Trad climber
WA
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Sep 29, 2016 - 09:31pm PT
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Stoked for ya Bluey!
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this just in
climber
Justin Ross from North Fork
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Sep 29, 2016 - 10:03pm PT
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F*#king a dmt. Lol. I see what you did there
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Reilly
Mountain climber
The Other Monrovia- CA
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Sep 29, 2016 - 10:04pm PT
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BTW, if you put a hun or two extra per month towards the principal you will
be amazed at how much you will save in the long run. If you don't figure
you're in it for the long run then put that money towards improvements and
hope prices keep on keepin' on!
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cragnshag
Social climber
san joser
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Sep 29, 2016 - 10:19pm PT
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Sweet! Congrats.
We were looking to buy in South San Jose a few years back and it was unreal how shiity of a place you get for half a million dollars. We were doing our house hunting between the Bernal and Cottle exits and finally gave up when we were at an open house where the seller/realtor didn't bother to get rid of the old tire half buried in the front yard, or clean up dog crap in the garage and backyard, or even tape live electrical wires hanging out of exposed interior walls. And they wanted $480,000 for the place (4 years ago).
We ended up buying a nice newer home 20 miles south in Gilroy... further from Guadalupe Rocks, but closer to Pinns and Yos :) We cashed out our 401K's as well for the down payment. In the bay area, your house IS your retirement...
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JOEY.F
Gym climber
It's not rocket surgery
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Sep 29, 2016 - 10:20pm PT
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Best to you Blue, it can be a b***h home owning.
Like the septic system that went out on this place. Well no water and sewer bills at least...
All good in the long run though.
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Gary
Social climber
Desolation Basin, Calif.
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Sep 30, 2016 - 06:28am PT
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It's not a good idea most of the time to 'borrow' from yer 401K. You'll be
heavily penalized by the IRS plus your house isn't going to make nearly the
return on investment your 401K is.
There is no penalty to take a loan from your 401k. You pay the interest to yourself, so that's good. I did that to buy my condo. Like Bluey said, it's cheaper than renting, plus the rent doesn't go up.
Good luck with the house, bluering. Are you handy with tools? :-)
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EdwardT
Trad climber
Retired
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Sep 30, 2016 - 07:10am PT
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Congrats. Owning beats the hell of paying rent.
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pyro
Big Wall climber
Calabasas
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Sep 30, 2016 - 07:27am PT
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Good for you steve!
I borrow from 401k which put me into a house also..
If you want to save money from having a pest guy spray for ants or other bugs just go onto domyownpestcontrol.com..
I use the same stuff as terminix guy..save $$$
Congrats
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Reilly
Mountain climber
The Other Monrovia- CA
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Sep 30, 2016 - 07:34am PT
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I stand corrected, thanks! But I am still correct that a home is not the investment most think it is. Many studies have shown it only keeps pace with inflation except in bubbles.
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apogee
climber
Technically expert, safe belayer, can lead if easy
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Sep 30, 2016 - 08:13am PT
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There are numerous practical, indirect advantages that come along with homeownership. All things considered, it is still one of the best, single investments most people can make.
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The Lisa
Trad climber
Da Bronx, NY
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Sep 30, 2016 - 08:16am PT
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Congratulations on a place of your own! Mortgage beats rent in so many situations.
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Wayno
Big Wall climber
Seattle, WA
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Sep 30, 2016 - 09:38am PT
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Good move, Steve. Hopefully the bubble won't pop too soon and then after you have some equity and you get too old to afford the cost of living in Cali, you can sell and buy five houses out in the country somewhere. We just bought 3200 sq. ft. of a place on 3/4 of an acre for 90k. We will sell our place in Seattle for five times that. We bought this Seattle place new and the quality of the construction is crap. The fifty year old place in Republic is built way more solid.
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NutAgain!
Trad climber
South Pasadena, CA
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Sep 30, 2016 - 09:55am PT
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Congrats Steve!
As long as you can afford to keep making payments even during a bubble, in the long run you'll come out alright whenever it pops. And it's not clear how much it will really pop in the silicon valley versus towns a farther out.
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the Fet
climber
Tu-Tok-A-Nu-La
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Sep 30, 2016 - 10:02am PT
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Congrats.
Buying one of the lowest priced houses in the south bay is a pretty safe investment. There are so many jobs and so much money in the bay area that even if/when prices take a downturn there is price pressure at the bottom of the market that will keep the lower end from dropping off dramatically and any downturn will eventually come around and it will appreciate again.
After owning a few houses I would suggest: figure out what the best returns on investment will be when you sell it, e.g. kitchen and bath remodels, and do them now so you get the benefit of them while you live there. You are going to pay for them anyway so might as well have all the time in your house enjoying them.
As mentioned you could pay additional principal every month, or make one extra payment a year to just principal. You will pay a lot less interest in the long term. But you've got to compare that to doing home improvement. The dollars may be better invested there, especially with interest rates so low. And if it's a fixer you'll spend 2 to 3 times as much time and money working on it as you expect. Been there, done that. Seriously get that in your head now, if you think it will take one weekend to fix a deck or something, figure 2-3.
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Majid_S
Mountain climber
Karkoekstan
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Sep 30, 2016 - 10:04am PT
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let me guess
A 220 sqft Dog house near story and king with tons of project to do but no worry, I got you plenty of contractor in SJC to fix it up. By the way, i got a buddy who is selling house on 3AC lot in Gilroy for $900K
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Gary
Social climber
Desolation Basin, Calif.
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Sep 30, 2016 - 10:09am PT
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But I am still correct that a home is not the investment most think it is. Many studies have shown it only keeps pace with inflation except in bubbles.
For me buying the condo was better than paying rent. The mortgage payment was cheaper than rent. Plus rent goes up, mortgage payments don't. When renting, you pay the property taxes while the landlord gets the tax benefits. Every payment gets you equity, while rent just goes down the toilet.
It doesn't always make sense, true, but for me it did. Especially buying at the bottom of the market.
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Jon Beck
Trad climber
Oceanside
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Sep 30, 2016 - 11:32am PT
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Congrats Bluey, smart move. Keeping a home for the long term has the added benefit of eventually paying the lowest property taxes in the country thanks to Prop 13
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cragnshag
Social climber
san joser
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Sep 30, 2016 - 12:44pm PT
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Another thing to consider is that with all the money the fed has been printing over the last ten years, we are overdue for some inflation.
So if you are in a fixed rate mortgage at 3.5% and in a few years inflation spikes to 3.5% or higher, your effective rate will be 0% and you'll be paying off the loan with "cheaper" dollars (since inflation will slowly raise wages as well). That's what I'm counting on anyway...
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James Wilcox
Trad climber
Goleta/Virginia Lakes
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Sep 30, 2016 - 02:14pm PT
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Congratulations on the new home!
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Adventurer
Mountain climber
Virginia
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Sep 30, 2016 - 02:29pm PT
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Congrats on the new home!!!
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labrat
Trad climber
Erik O. Auburn, CA
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Sep 30, 2016 - 02:29pm PT
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Congratulations on your new purchase.
I'll be spending my weekend on yard work and home improvements.....
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guyman
Social climber
Moorpark, CA.
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Sep 30, 2016 - 02:39pm PT
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Congratulations...... Now your really livin the American Dream.
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the Fet
climber
Tu-Tok-A-Nu-La
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Sep 30, 2016 - 02:57pm PT
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Many studies have shown it only keeps pace with inflation except in bubbles.
Those studies were probably for home ownership in general. But there is no single home market. There are hundreds of markets in the US. And the cycles are vary from place to place.
It's all about where and when you buy.
A house in the south bay is not a good idea at this time if you are investing money, but as your primary residence there's a lot of factors that make it more worthwhile. That's not even getting into the emotional factors of owning your own home.
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Reeotch
climber
4 Corners Area
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Sep 30, 2016 - 02:59pm PT
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Ho man . . .
If you got a mortgage, you're the one whose owned
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zBrown
Ice climber
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Sep 30, 2016 - 03:05pm PT
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Don't forget that when your house appreciates by $500K, since you're married that's a $500K gain tax free when you sell.
What is your marginal tax rate?
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the Fet
climber
Tu-Tok-A-Nu-La
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Sep 30, 2016 - 03:08pm PT
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Money is so cheap to borrow on a primary residence right now (3.5%) you'll end up with good return (mostly on other people's money) in many parts of the country, plus the other benefits of home ownership.
Inflation lately has been around 1% but long term has been 3%. Either way the cost to borrow is very low.
The main negatives are it ties you down and can suck up your time.
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Jaybro
Social climber
Wolf City, Wyoming
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Sep 30, 2016 - 04:39pm PT
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Congrats
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eeyonkee
Trad climber
Golden, CO
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Sep 30, 2016 - 06:53pm PT
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Last time I was in San Jose was probably 1978. I was with my climbing partner Al Chase and his friend Vic, who lived in San Jose. Al was from Waterford, Maine. We were on a brief respite from the Valley. Al later died on Denali in 1980 -- actually he just never returned. San Jose was completely different back then of course. It was a lot closer to the Dionne Warwick song.
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Majid_S
Mountain climber
Karkoekstan
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Sep 30, 2016 - 09:12pm PT
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San Jose is now called LA
Traffic is so bad I wish I went back to LA
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Bushman
climber
The state of quantum flux
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Nice job Bluering, good on you and your investment, congrats!!
My wife and I bought our first home in suburbia near Sacramento when I was only 30 days sober, no regrets. Sold 13 years later for a profit and got out of town. 14 years now since the purchase of a rural ranch house with 3 acres and a view. It's 27 years later and I'm still sober, and my wife is finally retiring from her stressful state job in January.
Buying a home is really just buying a mortgage, but you control the money (the debt) as long as you plan ahead and are responsible. That's all the banks really do anyway. Keep a savings and cash for unexpected home repairs and improvements. My own retirement is several years off but on the horizon now.
However you do it, you're not buying a landlord a home or maintaining their investment for them anymore like you used to. There is a certain freedom to that.
If all hell breaks loose just consider, we never had anything to begin with and we can't take it with us when we go.
-bushman
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donini
Trad climber
Ouray, Colorado
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Congrats Bluering!
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clinker
Trad climber
Santa Cruz, California
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It used to be a nice neighborhood. Now, it's a little shithole.
I thought you were Polish not American Indian.
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SC seagoat
Trad climber
Santa Cruz, Moab, A sailboat, or some time zone
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So, a couple months ago, two or three families moved to the house across the street (a single family house).
Which house? You only have them all over the world!!! ;)
Susan
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