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Jeff

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O.K., I know the internet is supposed to be for cat videos and fights about politics...and not for sharing personal accomplishments….but...

I OWN HALF of A HOUSE!

Never in my ~25 year history of buying and owning houses have I ever "owned" a majority of a house...

...so in my mind I always sorta thought the bank "owned" the house...(I know technically that I "own" the property, but if the bank paid for 95% of the house...it sorta "feels" like the BANK "owns" the house).

But I officially now "own" 51% of this house--suck it bank!
(oh, your check is in the mail by the way...).

 
 
 
19 S Ridge Pointe Dr , Edmond, OK 73034-7384 is currently not for sale. The 2,166 sq. ft. single-family home is a 4 bed, 2.5 bath property. This home…

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rickencin

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Hi Jeff, I hope things are going well for you. Congratulations on your majority ownership!
Deeds of Trust are a bit weird.  The Trustee can sell the property if you fail to make payments, but if you are up to date, the property is yours.  I believe that you have "equitable title" but the trustee does not.  In theory the trustee could sell the property for more than the loan and fees, but doesn't get to keep the difference  (well, the beneficiary/lender doesn't), which belongs to the owner (trustor). I suppose there is a lot of detail here, especially as laws vary from state to state.  The details seem to fall out of my head minutes after I read them. For California:

"The California Supreme Court’s recognition in Bank of Italy II (now Bank of America) that deeds of trust are “practically and substantially only mortgages with power of sale” renders obsolete all pre-1933 case law that was built upon the legal foundation of Koch v. Briggs that holds a deed of trust “has no feature in common with a mortgage, except that it was executed to secure an indebtedness.”  In case after case published over the last 75 years, the California courts have reconciled any remaining distinctions between a deed of trust and mortgage with power of sale."

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javipa

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I've never offered congratulations for owning half a house before, but I can better appreciate the achievement at my age.

Congratulations Jeff!  I hope you can own more halves soon ...if that's what you want.

Probably the only thing that trumps control of real estate is ownership of it. 

I remember your earlier posts describing the climb back up, and was inspired by your determination to make things work.  

You prove that sticking with it, pays off.

------------------------
Back in the day, we were accumulating rentals in Orange County, when nobody believed it was possible to have cash flow.  They still don't.  But we did.  I performed a 10-year appreciation analysis and concluded that our rentals were appreciating at a little more than a $1,000/mo. with inflation built in.  It's even more now. 

And that included the market collapse.  Another reason that buy-and-hold is just a smart move, especially for younger investors.  Ten, free-and-clear, rentals by the time your sixty-five, can make one financially independent by any account. 

I remember a guy at the Orange County Investor's Club once say that he didn't speculate in real estate.  He just worked to find bargains, and hold on to them forever.  He added that it didn't make any difference, after twenty years, what he originally paid for a house.  I agreed.

Real estate investing is only rocket science for the gamblers and speculators.


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Jeff

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Reply with quote  #4 
Quote:
Originally Posted by javipa

I've never offered congratulations for owning half a house before, but I can better appreciate the achievement at my age.

Congratulations Jeff!  I hope you can own more halves soon ...if that's what you want.



Thank you for your congratulations...I totally DO want to own more halves. 

I also passed another millstone today--two of my houses have appreciated 100% from the original purchase price.  It took 14 years...but not a bad return on a no money down 100% loan.  Those two houses alone are now worth approaching a million dollars...of which I own not quite 50% (I pulled out ~100k when I refinanced).  My ROI is whatever I want it to be up to infinity.

(Of course those are my two "winners."  I have a "loser" in Florida that isn't quite worth what I paid for it...and appreciation levels everywhere in between 0% and 100% on my other houses.  If only I had known where to buy and where to not buy back in 2005!  All my original exhaustive research was no better than throwing a dart I think.)

If you buy many houses, not every one needs to be a "winner"...just enough of them.  For me, two was enough, along with some "medium winners," for me to feel like I finally have succeeded at this investing thing.  

I didn't feel that way for a long time.

Quote:
Originally Posted by javipa

Probably the only thing that trumps control of real estate is ownership of it. 

I remember your earlier posts describing the climb back up, and was inspired by your determination to make things work.  

You prove that sticking with it, pays off.

Thank you.  It was hard.

Quote:
Originally Posted by javipa



------------------------
Back in the day, we were accumulating rentals in Orange County, when nobody believed it was possible to have cash flow.  They still don't.  But we did.  I performed a 10-year appreciation analysis and concluded that our rentals were appreciating at a little more than a $1,000/mo. with inflation built in.  It's even more now. 

And that included the market collapse.  Another reason that buy-and-hold is just a smart move, especially for younger investors.  Ten, free-and-clear, rentals by the time your sixty-five, can make one financially independent by any account. 

 

 

I am not going to make it!  Maybe by age 80?

 

Quote:
Originally Posted by javipa

I remember a guy at the Orange County Investor's Club once say that he didn't speculate in real estate.  He just worked to find bargains, and hold on to them forever.  He added that it didn't make any difference, after twenty years, what he originally paid for a house.  I agreed.

 

I agree. 

Of course you have to make the payments.   I almost couldn't.

But I squeezed by by the skin of my teeth. 

 

 


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Jeff

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Reply with quote  #5 
Quote:
Originally Posted by javipa


------------------------
Back in the day, we were accumulating rentals in Orange County, when nobody believed it was possible to have cash flow.  They still don't.  But we did.  I performed a 10-year appreciation analysis and concluded that our rentals were appreciating at a little more than a $1,000/mo. with inflation built in.  It's even more now.  

 

Umm...what is an "appreciation analysis" and how do you calculate it?

Is it as simple as taking the appreciation and dividing by the number of months?   For example, my portfolio of houses has appreciated $672 in 14 years (~168 months).  Does that mean I have a 14-year "appreciation analysis" of 4k a month ($672/168)?  Is that how you are using the term?

Also, is there a similar "equity position analysis" that is calculated by taking your change in equity and dividing by the number of months?  I am not familiar with this calculation...but if I do it for my portfolio it is...6k a month for the 14 year period.  

Beats working.


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javipa

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Reply with quote  #6 

Well, 'appreciation analysis' sounds all sophisticated... doesn't it?

I just mean I took the then present value and subtracted the purchase price, and whatever that figure came to, I divided it by the number of months of ownership.

For example:

In 1980 we paid $79,000
In 1995 retail value $275,000

$275k less $79k equals $196k divided by 180/mos of ownership, equals $1,088/mo in gross appreciation including inflation, but not including loan pay down.

That's all.

I think we put up a $9,000 down payment at the time, and over 15 years experienced an average appreciation of $13,000/yr.  Whatever that ROI is...?  Actually, I'm terrible at math, and that's why I'm into real estate.  Even mathtards can make this thing work ...if they stick with it long enough.

----------------------

Our family invested in some losers, too.  One loser was in S. Sacto.  We paid $18,000 in 1969 (???).  I forget exactly.  The area immediately flooded; the house had no rebar in the foundation; the floors on the back half of the house assumed the topography of the Rocky Mountains; the doors wouldn't shut; the windows wouldn't close; and the backyard became a perma-swamp.  We nursed that hell hole along for 30-years and experienced virtually no equity profit after dumping money into it routinely.

The last straw came when I paid $1,000 for a garage door and tub-enclosure replacement that the PM told me had to be done to retain the renter.  So, Okay.  Never mind I had replaced both five years earlier, but ...crap happens. 

I asked the PM what he thought the house was worth, and could he try to sell the place for us 'as is.'

Sure.  He had a buyer for $145k.  Escrow failed.  Buyer bailed.  I took a trip to Sacto. to assess the crapuation.  Found the house is poor shape, with the garage door and tub enclosure I installed still there. What?  I now realized I had been abused like an imported Indonesian sex slave.

Fired the PM, whom disappeared on me anyway ...no surprise.  Should have sued him, but I had bigger fires to put out at the time.

Short and long; spent another $5k on a cosmetic rehab; intending to rent the house again, and stave off the inevitable. 

However, an agent showed up and asked if I wanted to sell the house.  I said, "No, it was rented."  He asked what price I'd take.  I thought I'd blow this hard-of-hearing knucklehead off my lawn by quoting $175,000 cash, with no financing contingencies, and a $2,500 non-refundable deposit ...up front.

To my amazement, he asked if he could see inside.  I said sure.  The place was livable for someone who wore hiking boots to bed, and didn't mind the whistle of wind coming through the windows.

He handed me a check, and said, I'll be right back with a purchase agreement.  I said, OK.

While the guy was gone, I filled several pages of yellow-lined note paper with known and imagined defects in the house, to protect myself from a waste of time.  The non-refundable deposit was to cover any lost rent that I might experience if the guy turned out to be a flake.

BTW, I already had the house leased, and was just waiting for my credit-challenged tenants to bring me their 'giant' deposit. 

Well, the agent came back with his buyer, along with a signed purchase agreement.  I accepted it, as long as they read, accepted and signed my disclosure sheets.  They did.  I cashed the deposit check. We opened escrow.  The appraisal came in at the exact dollar amount of the purchase price, and we closed three weeks later. 
---------------------------

I won't tell you about the real loser house I paid $30,000 for; put in $10,000; and sold for ...$30,000.  Such a deal. 

Lesson Learned:  Don't invest out-of-state. 
 



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"Obstacles are those frightful things you see when you take your eyes off your goals." --- Henry Ford "

"149 Ways (Plus One) To Find Motivated Sellers and Get Them To Find You" >>>Click Here To Download 

Jeff

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Reply with quote  #7 

Quote:
Originally Posted by javipa

Well, 'appreciation analysis' sounds all sophisticated... doesn't it?

 

Quote:
Originally Posted by javipa

 

 Lol!

 

 


I just mean I took the then present value and subtracted the purchase price, and whatever that figure came to, I divided it by the number of months of ownership.

For example:

In 1980 we paid $79,000
In 1995 retail value $275,000

$275k less $79k equals $196k divided by 180/mos of ownership, equals $1,088/mo in gross appreciation including inflation, but not including loan pay down.

That's all.

Quote:
Originally Posted by javipa

 That's what I guessed....thank you. 

A thousand a month on one house sounds pretty great!  It took me ELEVEN houses to get to 4k a month.  So really only ~$400 a month...for MUCH more risk. 

I wish I had bought TEN houses like yours!



I think we put up a $9,000 down payment at the time, and over 15 years experienced an average appreciation of $13,000/yr.  Whatever that ROI is...?  Actually, I'm terrible at math, and that's why I'm into real estate.  Even mathtards can make this thing work ...if they stick with it long enough.

----------------------

Our family invested in some losers, too.  One loser was in S. Sacto.  We paid $18,000 in 1969 (???).  I forget exactly.  The area immediately flooded; the house had no rebar in the foundation; the floors on the back half of the house assumed the topography of the Rocky Mountains; the doors wouldn't shut; the windows wouldn't close; and the backyard became a perma-swamp.  We nursed that hell hole along for 30-years and experienced virtually no equity profit after dumping money into it routinely.

The last straw came when I paid $1,000 for a garage door and tub-enclosure replacement that the PM told me had to be done to retain the renter.  So, Okay.  Never mind I had replaced both five years earlier, but ...crap happens. 

I asked the PM what he thought the house was worth, and could he try to sell the place for us 'as is.'

Sure.  He had a buyer for $145k.  Escrow failed.  Buyer bailed.  I took a trip to Sacto. to assess the crapuation.  Found the house is poor shape, with the garage door and tub enclosure I installed still there. What?  I now realized I had been abused like an imported Indonesian sex slave.

Fired the PM, whom disappeared on me anyway ...no surprise.  Should have sued him, but I had bigger fires to put out at the time.

Short and long; spent another $5k on a cosmetic rehab; intending to rent the house again, and stave off the inevitable. 

However, an agent showed up and asked if I wanted to sell the house.  I said, "No, it was rented."  He asked what price I'd take.  I thought I'd blow this hard-of-hearing knucklehead off my lawn by quoting $175,000 cash, with no financing contingencies, and a $2,500 non-refundable deposit ...up front.

To my amazement, he asked if he could see inside.  I said sure.  The place was livable for someone who wore hiking boots to bed, and didn't mind the whistle of wind coming through the windows.

He handed me a check, and said, I'll be right back with a purchase agreement.  I said, OK.

While the guy was gone, I filled several pages of yellow-lined note paper with known and imagined defects in the house, to protect myself from a waste of time.  The non-refundable deposit was to cover any lost rent that I might experience if the guy turned out to be a flake.

BTW, I already had the house leased, and was just waiting for my credit-challenged tenants to bring me their 'giant' deposit. 

Well, the agent came back with his buyer, along with a signed purchase agreement.  I accepted it, as long as they read, accepted and signed my disclosure sheets.  They did.  I cashed the deposit check. We opened escrow.  The appraisal came in at the exact dollar amount of the purchase price, and we closed three weeks later. 

 

Quote:
Originally Posted by javipa

 

This ending sorta sounds like a "win" not a "loser"...

Did you ever figure out why the guy bought the house?

 

 


---------------------------

I won't tell you about the real loser house I paid $30,000 for; put in $10,000; and sold for ...$30,000.  Such a deal. 

Lesson Learned:  Don't invest out-of-state. 

 

Quote:
Originally Posted by javipa

 

 I chuckle here because ALL of my houses are out of state...worse, I have never even seen a house that I purchased in 14 years.  Not a single one, not a single time.   I have never even been to the most of the cities I have houses in...

 

Crazy I know...

 


 



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javipa

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Reply with quote  #8 
I was afraid to ask the buyer why he was willing to buy a house that needed to be jacked up, have the footings and slab replaced, straightened, leveled, gutted, re-rocked, re-plumbed and re-windowed, and re-stucco'd.  It was a tear-down and start over candidate, as far as I was concerned, and served only as a rental, if not just a portfolio filler. 

All I could surmise from the broker was that the investor/buyer was gonna demo the slab (not the footings), do a more extensive cosmetic rehab (including new doors and windows and a kitchen) and retail it for about $290 with a "liar loan." (This was 2003) 

The roof was only five years old; was on a 10,000 lot; the street was full of freshly rehabbed, if not newly-built homes, and was close to a good school.  So, it had some things going for it.  I just wanted as much money back out of this disaster as I could get, without more risk. 

----------------------
Just for giggles I looked up the sales history on this house, and found that it last sold for $150k three years ago.  It seems like I came out like a bandit for selling it during the Liar Loan years...  I guess timing 'is' everything.  Who knew?


 

__________________

"Obstacles are those frightful things you see when you take your eyes off your goals." --- Henry Ford "

"149 Ways (Plus One) To Find Motivated Sellers and Get Them To Find You" >>>Click Here To Download 

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