Here?s the senerio: You?re a middle aged person, your income is low

L

Laurel_IHB

New member
This is not about Mello Roos but since there are a lot of opinions out there, I would like some of them. You won't offend me - so don't try and I won't PM you with more information.



Here's the senerio: You're a middle aged person, your income is low - under $27K per year, you don't anticipate your income going up much if at all, you rent a one-bedroom apartment in South OC, and you are presented with the opportunity to purchase a one-bedroom condo for $55K. After a down payment of about $30K (which is your savings and retirement), your payments (mortage, association, tax) will be in the $600 range. The condo is an affordable so there won't be any appreciation - or possibly a little.



So do you continue to rent - hoping that your situation improves or do you go for it? Tell me the pros and cons.



Thanks for your sincere input.
 
[quote author="Darlene" date=1231411483]This is not about Mello Roos but since there are a lot of opinions out there, I would like some of them. You won't offend me - so don't try and I won't PM you with more information.



Here's the senerio: You're a middle aged person, your income is low - under $27K per year, you don't anticipate your income going up much if at all, you rent a one-bedroom apartment in South OC, and you are presented with the opportunity to purchase a one-bedroom condo for $55K. After a down payment of about $30K (which is your savings and retirement), your payments (mortage, association, tax) will be in the $600 range. The condo is an affordable so there won't be any appreciation - or possibly a little.



So do you continue to rent - hoping that your situation improves or do you go for it? Tell me the pros and cons.



Thanks for your sincere input.</blockquote>


Do you mind telling how much rent this person is presently spending per month?
 
[quote author="Darlene" date=1231411483]This is not about Mello Roos but since there are a lot of opinions out there, I would like some of them. You won't offend me - so don't try and I won't PM you with more information.



Here's the senerio: You're a middle aged person, your income is low - under $27K per year, you don't anticipate your income going up much if at all, you rent a one-bedroom apartment in South OC, and you are presented with the opportunity to purchase a one-bedroom condo for $55K. After a down payment of about $30K (which is your savings and retirement), your payments (mortage, association, tax) will be in the $600 range. The condo is an affordable so there won't be any appreciation - or possibly a little.



So do you continue to rent - hoping that your situation improves or do you go for it? Tell me the pros and cons.



Thanks for your sincere input.</blockquote>


How much of your retirement is in the $30k? I would create a new thread if I were you.
 
[quote author="Darlene" date=1231411483]This is not about Mello Roos but since there are a lot of opinions out there, I would like some of them. You won't offend me - so don't try and I won't PM you with more information.



Here's the senerio: You're a middle aged person, your income is low - under $27K per year, you don't anticipate your income going up much if at all, you rent a one-bedroom apartment in South OC, and you are presented with the opportunity to purchase a one-bedroom condo for $55K. After a down payment of about $30K (which is your savings and retirement), your payments (mortage, association, tax) will be in the $600 range. The condo is an affordable so there won't be any appreciation - or possibly a little.



So do you continue to rent - hoping that your situation improves or do you go for it? Tell me the pros and cons.



Thanks for your sincere input.</blockquote>


1. If it is an affordable then this will be a very long term commitment and with the some tax advantage sounds like a good deal. Go for it! Get a fixed rate and never have to worry about the rent being raised again.
 
[quote author="OCCOBRA" date=1231440460][quote author="Darlene" date=1231411483]This is not about Mello Roos but since there are a lot of opinions out there, I would like some of them. You won't offend me - so don't try and I won't PM you with more information.



Here's the senerio: You're a middle aged person, your income is low - under $27K per year, you don't anticipate your income going up much if at all, you rent a one-bedroom apartment in South OC, and you are presented with the opportunity to purchase a one-bedroom condo for $55K. After a down payment of about $30K (which is your savings and retirement), your payments (mortage, association, tax) will be in the $600 range. The condo is an affordable so there won't be any appreciation - or possibly a little.



So do you continue to rent - hoping that your situation improves or do you go for it? Tell me the pros and cons.



Thanks for your sincere input.</blockquote>


1. If it is an affordable then this will be a very long term commitment and with the some tax advantage sounds like a good deal. Go for it! Get a fixed rate and never have to worry about the rent being raised again.</blockquote>


What tax advantage?
 
What?s the difference between median household income and average household income?

Some articles reference the median number while others the average.



Thanks!
 
[quote author="Darlene" date=1231411483]This is not about Mello Roos but since there are a lot of opinions out there, I would like some of them. You won't offend me - so don't try and I won't PM you with more information.



Here's the senerio: You're a middle aged person, your income is low - under $27K per year, you don't anticipate your income going up much if at all, you rent a one-bedroom apartment in South OC, and you are presented with the opportunity to purchase a one-bedroom condo for $55K. After a down payment of about $30K (which is your savings and retirement), your payments (mortage, association, tax) will be in the $600 range. The condo is an affordable so there won't be any appreciation - or possibly a little.



So do you continue to rent - hoping that your situation improves or do you go for it? Tell me the pros and cons.



Thanks for your sincere input.</blockquote>


Just say no. You would be very hard pressed to show me any scenario where draining your savings and retirement funds to purchase a depreciating asset makes any sense. Remember, you CAN live an entirely satisfying, happy life while renting. Regardless of what the NARspeaking Realtards would like you to believe. And perhaps in the future, when home values aren't so inflated, an opportunity to purchase may come along. An opportunity that doesn't require you to invest ALL of your liquid assets - that's simply a "no go".
 
[quote author="tenmagnet" date=1231465633]What?s the difference between median household income and average household income?

Some articles reference the median number while others the average.



Thanks!</blockquote>


Median = put the numbers in order and take away the top half and the bottom half and the one in the middle is the median. If you sample is [2,2,3,5,8] then your median is 3. If there an even amount of numbers, then the middle two ones are averaged out.



Average/Mean = add the numbers up and take away divide by the number in the sample so for [2,2,3,5, 8] average = 20/5 = 4



I'm not sure how they decide whether to use the median or average in each study? Maybe they just pick the one that best supports what they want to put out.
 
[quote author="Darlene" date=1231411483]This is not about Mello Roos but since there are a lot of opinions out there, I would like some of them. You won't offend me - so don't try and I won't PM you with more information.

Here's the scenario: You're a middle aged person, your income is low - under $27K per year, you don't anticipate your income going up much if at all, you rent a one-bedroom apartment in South OC, and you are presented with the opportunity to purchase a one-bedroom condo for $55K. After a down payment of about $30K (which is your savings and retirement), your payments (mortage, association, tax) will be in the $600 range. The condo is an affordable so there won't be any appreciation - or possibly a little.

So do you continue to rent - hoping that your situation improves or do you go for it? Tell me the pros and cons.

Thanks for your sincere input.</blockquote>


Please keep in mind that my suggestion is from point of view of a single male, so it may not apply to everyone.



I'd first look at ways to increase my income, by taking or creating side jobs. I'll list a couple quick examples. You can learn trades like glass repair to remove scratches from car windows, graffiti from store windows, and take out water stains from bathroom shower glass. The start-up cost is low (variable speed drill, various supplies/equipment, safety gear) and you can practice on used/old windshield & glass cheaply. Maybe go to a "pick your part" car lot and pay them some $$ to practice on windshields there.



<a href="http://www.gtglass.com/site/scratch_removal.html">http://www.gtglass.com/site/scratch_removal.html</a>





For those who are tech savvy, you could try creating, selling, trading, or buying established internet businesses. Be warned, that many of the sellers are their claimed business income are inflated or fraudulent. So be very careful and don't buy duds. Verify as much as you can and don't forget to look at site content's longevity. i.e. A web site on a popular TV show is probably only popular while the show is running.



<a href="http://marketplace.sitepoint.com/">http://marketplace.sitepoint.com/</a>





As for buying real estate, I'd suggest making/saving more $$ before raiding the retirement fund. To save $$, try adopting a more minimalist lifestyle. Sell or donate as much crap as you can and live simply & cheaply. Instead of renting a 1 bed apartment, maybe try to save $$ by renting a room from someone instead. This is short-term as you try to save $.



If and when you've saved sufficient funds for RE investments, buy an income property elsewhere that's affordable and will generate positive cash flow. Then try to pay off the loan as fast as you can. If Irvine is too expensive, try looking around UC Riverside area. You'd always have a new supply of student renters every year. Get a good property manager to take care of everything for you.



When you've build up sufficient passive income, pack up and move to a country with much lower cost of living. Stay away from the expensive cities and look for smaller towns. In many countries the economic centers are big cities, and beach front provinces are the boonies. Find a cheap place to rent by the beach and spend your time learning a new language. Find something you could do to make extra $$ on the side -- export local goods & handicraft to NA & EU. You could also try to find a job abroad. Write a book about your experiences and sell it online. It's possible to live comfortable in rural provinces for as little as $500 USD/month.



<a href="http://www.escapeartist.com/">http://www.escapeartist.com/</a>
 
[quote author="24inIrvine" date=1231479135][quote author="tenmagnet" date=1231465633]What?s the difference between median household income and average household income?

Some articles reference the median number while others the average.



Thanks!</blockquote>


Median = put the numbers in order and take away the top half and the bottom half and the one in the middle is the median. If you sample is [2,2,3,5,8] then your median is 3. If there an even amount of numbers, then the middle two ones are averaged out.



Average/Mean = add the numbers up and take away divide by the number in the sample so for [2,2,3,5, 8] average = 20/5 = 4



I'm not sure how they decide whether to use the median or average in each study? Maybe they just pick the one that best supports what they want to put out.</blockquote>




I think you're right about them using/picking whichever fits best.
 
[quote author="mikal1" date=1231477763]



Remember, you CAN live an entirely satisfying, happy life while renting..</blockquote>


on $27,000/year in Orange County as a middle-aged person? I can't say that I agree





I agree with the rest of what you wrote about not using up all of your liquid cash and needing to save for retirement.
 
[quote author="ABC123" date=1231484041][quote author="mikal1" date=1231477763]

Remember, you CAN live an entirely satisfying, happy life while renting..</blockquote>


on $27,000/year in Orange County as a middle-aged person? I can't say that I agree

</blockquote>


There are plenty of middle aged people making less than that, working and living in OC. They stock the shelves, bag your groceries, pick strawberries, clean hotel rooms, and sweep the floors at Disneyland. Santa Ana is the county seat for Orange County, and the city has median personal income of less than $24,000.



Orange County has many immigrants and their definition of class and quality of life may differ from ours. A poor peasant farmer from the rural provinces with little hope of improving his socio-economic status, would find a $27k/year job and life in the OC to be very rewarding. He may be cleaning bathrooms in offices at night, but there's no shame in the job and no one to look down on his lowly birth back home.



A "middle class" family from the same rural province, who made less than $27k/year back home but was able to afford large home, maid, and servants, would find $27k/year job and life in the OC to be a downgrade in status. Back home, they could hire a maid or driver for $100/month and never lift a finger cleaning their homes. Here, they're lucky to afford Molly Maid.
 
Here is the main problem with your description, as quoted:



"presented with the opportunity to purchase a one-bedroom condo for $55K."



This section of the sentence is the centerpiece of your decision making process (or should be). Although income and anticipations play a role, you have to know what you are getting. You tell me $55k condo, I tell you bullshit. There is some catch. A plane, a road, a roof, something is up. Always leave a buffer for emergencies. So for example, you have $30k saved, right? You down payment with tax and all other known expenses should not exceed $22k. You anticipate no increase in pay. What about anticipating that you might get laid off? Its a harsh world right now as we can all see. Sure you made more than a 50% down payment but what if the shit hits the fan in March? What is all these people who didn't expect all this bullshit to happen also couldn't see a double digit unemployment rate? Im not saying it will happen, I am saying it CAN happen. Anyone who plays any market knows that patterns are for fools. Volatility itself is volatile. Think about that.



See I understand what you want. You want security. You are getting older and you know you need a roof over your head, food, water, clothing, internet, phone, tv, all these things and rent is just not feasible forever. I dont know what will happen. There are various possibilities. The first that comes to mind is that the dollar collapses. Then your $30k is worthless anyway, you would have been better off putting towards the house which even though u have a mortgage, you get possession. On the other hand, the government knows things are bad and the quick and easy way out is to stimulate the market. They have already done this with low interest rates but market stimulation is lagging behind because there is still a credit "crunch."



BONUS: What is the difference between a liar and a bullshitter? A liar is actively trying to deceive you. A bullshitter is indifferent to the truth. Do your research and trust yourself. (this quote for a paper named "On Bullshit" by forgotten authoer but search google for more info)



No matter what you do, there is risk. I would say, in my opinion, if you have the credit score and can get within the 5.x% 30 yr no bullshit variable rates and no bullshit balloon payment. Read the papers, make sure your not getting a mega balloon payment 40yr fancy pants mortgage. Just go a 30yr full amortazied never changing payments loan so you know what to expect.
 
[quote author="momopi" date=1231486111][quote author="ABC123" date=1231484041][quote author="mikal1" date=1231477763]

Remember, you CAN live an entirely satisfying, happy life while renting..</blockquote>


on $27,000/year in Orange County as a middle-aged person? I can't say that I agree

</blockquote>


There are plenty of middle aged people making less than that, working and living in OC. They stock the shelves, bag your groceries, pick strawberries, clean hotel rooms, and sweep the floors at Disneyland. Santa Ana is the county seat for Orange County, and the city has median personal income of less than $24,000.



Orange County has many immigrants and their definition of class and quality of life may differ from ours. A poor peasant farmer from the rural provinces with little hope of improving his socio-economic status, would find a $27k/year job and life in the OC to be very rewarding. He may be cleaning bathrooms in offices at night, but there's no shame in the job and no one to look down on his lowly birth back home.



A "middle class" family from the same rural province, who made less than $27k/year back home but was able to afford large home, maid, and servants, would find $27k/year job and life in the OC to be a downgrade in status. Back home, they could hire a maid or driver for $100/month and never lift a finger cleaning their homes. Here, they're lucky to afford Molly Maid.</blockquote>


Well, a job cleaning bathrooms in the night, regardless of the country you are in, is still a demeaning job. Let's not try to make ourselves feel better as well as justify paying the "lower echelon" of our society and non-living wage by using the "they've got it better than where they came from and they can leave if they don't like it" arguement.



I would think that if you polled 90% of the people earning $27K a year on what they need more of, it would be money. Although, i suspect if you polled people earning over $100K a year, the vast majority would say the same. It's cliche, but, life's what you make of it and you can be happy making less than $27K, BUT i think you will definitely have to overcome some significant hurdles that wouldn't exist for the people making over $100K.
 
[quote author="LoudRoar" date=1231486624]Here is the main problem with your description, as quoted:



"presented with the opportunity to purchase a one-bedroom condo for $55K."



This section of the sentence is the centerpiece of your decision making process (or should be). Although income and anticipations play a role, you have to know what you are getting. You tell me $55k condo, I tell you bullshit. There is some catch. A plane, a road, a roof, something is up. Always leave a buffer for emergencies. So for example, you have $30k saved, right? You down payment with tax and all other known expenses should not exceed $22k. You anticipate no increase in pay. What about anticipating that you might get laid off? Its a harsh world right now as we can all see. Sure you made more than a 50% down payment but what if the shit hits the fan in March? What is all these people who didn't expect all this bullshit to happen also couldn't see a double digit unemployment rate? Im not saying it will happen, I am saying it CAN happen. Anyone who plays any market knows that patterns are for fools. Volatility itself is volatile. Think about that.



See I understand what you want. You want security. You are getting older and you know you need a roof over your head, food, water, clothing, internet, phone, tv, all these things and rent is just not feasible forever. I dont know what will happen. There are various possibilities. The first that comes to mind is that the dollar collapses. Then your $30k is worthless anyway, you would have been better off putting towards the house which even though u have a mortgage, you get possession. On the other hand, the government knows things are bad and the quick and easy way out is to stimulate the market. They have already done this with low interest rates but market stimulation is lagging behind because there is still a credit "crunch."



BONUS: What is the difference between a liar and a bullshitter? A liar is actively trying to deceive you. A bullshitter is indifferent to the truth. Do your research and trust yourself. (this quote for a paper named "On Bullshit" by forgotten authoer but search google for more info)



No matter what you do, there is risk. I would say, in my opinion, if you have the credit score and can get within the 5.x% 30 yr no bullshit variable rates and no bullshit balloon payment. Read the papers, make sure your not getting a mega balloon payment 40yr fancy pants mortgage. Just go a 30yr full amortazied never changing payments loan so you know what to expect.</blockquote>


Okay, loud and obnoxious person, I think we (as in professional working adults) can infer that this condo is either in an age restricted community or is classified as very low income affordable housing hence the reduced purchase price. And, if you often quote an online essay entitled "On Bullshit", you may want to get your money back from the JC you spent six years at.
 
[quote author="momopi" date=1231486111][quote author="ABC123" date=1231484041][quote author="mikal1" date=1231477763]

Remember, you CAN live an entirely satisfying, happy life while renting..</blockquote>


on $27,000/year in Orange County as a middle-aged person? I can't say that I agree

</blockquote>


There are plenty of middle aged people making less than that, working and living in OC. They stock the shelves, bag your groceries, pick strawberries, clean hotel rooms, and sweep the floors at Disneyland. Santa Ana is the county seat for Orange County, and the city has median personal income of less than $24,000.



Orange County has many immigrants and their definition of class and quality of life may differ from ours. A poor peasant farmer from the rural provinces with little hope of improving his socio-economic status, would find a $27k/year job and life in the OC to be very rewarding. He may be cleaning bathrooms in offices at night, but there's no shame in the job and no one to look down on his lowly birth back home.



A "middle class" family from the same rural province, who made less than $27k/year back home but was able to afford large home, maid, and servants, would find $27k/year job and life in the OC to be a downgrade in status. Back home, they could hire a maid or driver for $100/month and never lift a finger cleaning their homes. Here, they're lucky to afford Molly Maid.</blockquote>


How do the people earning $24,000 afford Orange County's median rent? Are they living with 10 other family members? Are they living in rent-subsidized apartments? Can the owners of those apartments decide that they want to convert them into condos at a moments notice and kick out the tenants?
 
[quote author="ABC123" date=1231488037]

How do the people earning $24,000 afford Orange County's median rent? Are they living with 10 other family members? Are they living in rent-subsidized apartments? Can the owners of those apartments decide that they want to convert them into condos at a moments notice and kick out the tenants?</blockquote>


The median family (not individual) earnings is higher at $41k. Also, when housing is expensive, families double up and kids delay moving out. In Placentia, where the homes north of Chapman are expensive, 2 Hispanic families chip in to co-purchase a house.



Back in 1982, when my family first arrived in Anaheim, we "doubled up" with my uncle's family. There were 7 of us living in a 4 room rented house by Rio Vista elementary school, which really wasn't that bad. It had a nice yard and pool too. We stayed until both of our families had saved enough to buy our own homes.



My current GF has us beat. Her parents own a SFR in Lakewood by Artesia High School. At one time they had 11 people living in the same house, including her grandparents. Now they're down to 3 after everyone else moved out.



We're still considerably more fortunate than people who live in real slums. There are places where people dig through trash for discarded food to feed their families, hoping that one of their daughters would some day marry a rich foreigner who will solve all their financial problems. And places where men picking up used cigarettes to unroll any remaining tobacco into a tin can being considered "employed" by the local government statistics. I've always had a roof over my head and food on the table, and that alone is better than many millions of people around the world.
 
[quote author="jhammons01" date=1231490195]I'm not sure I would worry about losing a job or current income.....at $27k per year, there are plenty of Jobs where you can earn that amount. $13 per hour pays $27K.....I wouldn't base this decision on THAT job......allow me to rephrase that. I wouldn't take someones advice to "not" buy based on what may happen to that job.



$55K....I do worry about you using your $30K of savings to buy the place.



I would say this getting in on a fixed loan would be favorable for you in the long run...that is a given. Rents continue to rise with the market, you are always behind the 8-ball.



Plus, Where are you going to rent a place for that little amount. Room mate situation come into play.</blockquote>


Actually, effective rents are falling and will continue to fall, and vacancies are rising. I can't realistically imagine that trend changing over the next year or two.
 
<blockquote>

Actually, effective rents are falling and will continue to fall, and vacancies are rising. I can't realistically imagine that trend changing over the next year or two.</blockquote>


It is based on supply, demand, and chaos. Based on what we know now, rents next year will skyrocket.

Did anyone realistically think gas would go from $4.50 to $2.00? No, they didn't. They hurriedly invested in alternatives when reality hit them like a rock and it was too late, only to have the rug pulled from under them. I prefer to be the Socrates of investment. I don't know what is going to happen. I just know that anyone with certainty is living in fantasy land. You can only presume outcomes and calculate the risk, but even then, you cannot forsee everything.
 
[quote author="tkaratz" date=1231487431][quote author="LoudRoar" date=1231486624]Here is the main problem with your description, as quoted:



Okay, loud and obnoxious person, I think we (as in professional working adults) can infer that this condo is either in an age restricted community or is classified as very low income affordable housing hence the reduced purchase price. And, if you often quote an online essay entitled "On Bullshit", you may want to get your money back from the JC you spent six years at.</blockquote>


So it is affordable housing, which I have not researched whatsoever since most information on affordable housing regards rent. Nontheless, there are probably ups and downs related to this type of housing. Does she still have to maintain the upkeep of the property? Well i guess the roof is relevant than isnt it? Is she going to live there? Then planes and roads matter. Does she have family, how many, who etc etc the questions go on and on. It matters.



Although I appreciate the thoughtfulness of your ad hominem attack, which indeed is childish and ironic since you chose to follow with an insult regarding education. Let me simplify: Make childish insult, then claim opponent has inadequate education or is stupid. You sir, are a genius.
 
You must log in or register to reply here.
Back
Top