Go ahead, get it out of your system.
Desperate homedebtor-hamsters please go on about how smart you are, how renters are poor, coupon-cutting, library-going losers in life, etc.
Bubble sitters and bitter renters - please share your stories of cashing it at the peak and riding out the storm. And try to help the Desperate homedebtor-hamsters (DHH's) understand the concept of saving and frugality, versus debt and excess.
Let's get it on. No swearing.
40 comments:
I wonder what's going to happen when we go to buy a home after the summer (or later depending on the market)? We have paid-for cars, no credit cards, no student loans, or other debt. We'll put at least 40K down on a 180k (or less) home on a 10 year fixed. My salary is over 100K so I'm sure we'll have a hard time finding a lender that will agree to loan money to "crazy" people. We plan to pay off our home in only 5 years if possible.
We love being weird. As Dave Ramsey says, normal is broke. We don't want to be normal.
HAMPSTER PRIDE!!!!!!!!!
There seems to be two types of people here, people smart with money who save and are frugal, and people who are fools with money, are showy and flashy, and who don't understand basic economic fundamentals.
Tortoise and the Hare. Haves and Have Nots. We know how this story ends.
Hey us hamsters need a political voice in Washington. Hamsters of the world unite!
My name is JP and I am a GeoArbitraging Bubblesitter.
In 98' my wife and I built a 1400 sq ft house on 3.5 acres of land which we cleared ourselves with a chainsaw and brushcutter.
We contracted out frame to drywall, roofing and siding, most elec, plumbing and heating. We finished the interior, doors, floors, trim and paint and then I framed, wired and finished a TV room in the basement. To complete the kitchen, I got a job with a cabinet maker and built the cabinets and countertops.
During the build I set up an expense spread sheet to track expenses. Total expenses including land were $225K. The property was sold late in 2005 for $925K.
Our original mortgage was a construction note (ARM) $170 K 7.5% no points written in 1998. Later we rewrote the terms of the mortgage to 15 years at 4.875%.
We did not itemize our tax deductions for the second year of the rewritten mortgage. Due to our employment situation we made out better using standard deduction. So much for "you can write the interest off" Big deal, pay $9K to a bank to save $3K in taxes. No more Mortgages.
After selling, we moved into a small 3 bedroom rental in the same area at $1600 month. When the lease expired we moved into a larger home in the same area for $1300 month. I just spoke with a Realtor who has a studio for $1000 month heat/elec included. The original rental unit has been vacant for the past 6 months.
Our sailboat and autos are paid for and we carry no debt. We took off for about a month this winter to drive cross country and ski. Next year it will be 3 months.
The funds from the sale of the house are invested in short term securities which produce a decent, reliable ROI.
Thank you Real Estate industry for allowing us to legally pump and dump.
OK I'm in!
Bought in Feb 2000.
Sold in Aug 2006 for full asking and only $200 in concessions.
Bought (paid in full) a travel trailer which I'm now living in. Site rent is $335/mo INCLUDING electricity, water/sewer.
Paid off second vehicle.
Rest of da money's in da bank.
Current debt=$0.00
Netted $40,000, now in emmigrantdirect.com collecting 5.05%.
Income including wife's is around $100,000. Both Maxing 401k's, rest of cash goes into da bank.
True story.
JP, you rode the perfect wave!!!
Congrats!!
Keith you have a very narrow view of the world, rather black and white. Odd for such a sophisticated Democrat, I thought you were all about nuance. Tell me oh great QWEEFER where do I fit it in your little world of genius, spartan renter vs. foolish, flashy, broke owner?
Our combined income is $175K give or take depending on bonuses. No kids, just the two of us in our early 30s and no plans for kids ever. We both put in the maximum into our 401k accounts. Combined we have close to $235K. We both started contributing from day 1 of working full time after college.
My wife has about $20K worth of student loans at 3% interest which she is paying off as slowly as possible since the 3% is fixed and a little of that is tax deductible too. If the govt ants to lend money at 3% you take that deal and pay it off over 30 years.
Unlike what you think Keith, I have no credit card debt. Every purchase made by my wife or me is with a debit card. Only thing credit cards are ever used for is buying gas to get the 5% cashback from Discover and for things like making hotel reservations which often you can't do with a debit card. All balances are paid in full every month.
We own a home bought in early 2003 with a 10 year fixed 5.15% ARM. Value today is close to double what we paid given the drop of 10% or so over the past year. However, cost to rent same home today is more than my the entire monthly payment including PITI, HOA fees, maintenance fees, you name it. Add the tax deduction and we're saving roughly $700-800 by owning vs. renting every month. Granted we could live in a much smaller home in a shitty part of town and pay $1000 less. But we like where we live. We like living in an upscale area and we like having a big house with a big yard, you know how it is with us foolish, flashy hamster types.
We have 3 cars. One is paid off 2 are leases, 24 months each. The car I own outright is a 1976 Porsche I bought for $12,000 cash on a whim from my neighbor. It's my car. Impractical, expensive to maintain ..oh yes indeed. But I absolutely love driving it. WHOA!! $12K for a 3rd car? Why don't I realize I could put that into a 5.5% CD and have $15,000 in a few years? Gee I must be one dumb foolish, flashy homedebtor hamster. Oh well.
The other two are an X5 and an Audi A6 with a combined payment of $1040 a month. The Audi is my wife's car and the X5 is our ski/utility/take the dogs to the park car. $1040 for cars? Hmmm I must be a crazy hamster huh? And flashy too. What do I need a BMW for when I could drive a 15 year old Toyota? I dunno, I like driving a luxury car, with the latest technology and a powerful smooth engine. I also like knowing that it won't die on me 1/2 way to Mammoth in the middle of nowhere.
Despite what you and your minions believe there is pplenty of money for travel for us hamstery homedebtor flashy fools. I have never been a big fan of the 1 or 2 week trip so instead we take a lot of short trips. This weekend we're driving up to San Luis Obispo, next weekend going to Big Bear to ski, and a couple of weekends after that going to Austin for SXSW (if you don't know what that is, don't worry about it).
See Keith at the end of the day it comes to living a life of balance. We could put away every cent we earn, live in a shithole apartment, drive a 15 year old shitbox and for entertainment rent a movie every Saturday night for $3.99. Your readers seem to think that is the way to go and pat themselves on the back for living a life of self-induced poverty.
I think that is the way to live life when you're 75 years old. While I'm young I'm going to enjoy myself. That means spending follishly sometimes, but so be it, I'm not going to wake up 30 years from now and think gee great I have all this money saved up but I lived a boring life.
So you and the rest of the renters here enjoy your weekend locked up in your hovels counting your pennies found under the couch. I'll be out enjoying myself.
ok i'll brag just this once. I bought 4 homes before the boom but after the dotcomplosion. Sold in 05/06 to next fool. Last house wasnt ez to sell at all. now have 800k in bank and still makin fat stacks every month at work. im in CA of course.
the worry i have is that there are many many many more bubble sitters out there sitting on all that cash which will be s major price support. that type of windfall doesnt go away in a few years, eventually it will be put back to real estate at least some of it.
My precious metals portfolio is now $600,000+. Still living in an apartment and waiting. When will the insanity end?
"Tortoise and the Hare. Haves and Have Nots. We know how this story ends."
Yeah, we do.
The Chinese dragon waits at the finish line and eats them both.
Bought House in 2000 for 127k
Bought Mtn Property 2001 for 65k
Sold House in 2005 for 190k
Sold Mtn Property 2005 for 120k
Net Profit = 154k
Paid off all debt, except my car, the rest is in the bank! Moved to east coast, got a new job for 60% more money, but moved into the most overpriced housing market in all of NJ (Bergen County).
I've been renting for now almost two years, and I have saved an additional 20k per year since then. I'm all cash and precious metals, and waiting to buy my next house with a pound of gold!
Tim;
Feels good, doesn't it?
Anon;
Endless Summer.
I'm 32 years old. Bought in 2000, sold in April of 2006. Rent. Now have enough money to pay for my next home in cash. But, I've learned that the local small custom home builders are hurting worse than the FB's and large builders. After the spring/summer RE bust I'm going to build exactly the home I want for cash. Nothing big, nothing flashy, just exactly the home I want in exactly the area I want that I can live in for years and years with no mortgage. My wife and I have very good incomes so we should be able to live the way we want to without the shackles of a big mortgage.
I don't see how any FB can post on this blog that I was stupid for selling at the peak and renting.
OC WISEMAN SAYS
oH THE PAIN. i SOLD BOTH OF MY HOUSES THE FIRST ONE IN VEGAS IN 2005 AND THE SECOND ONE IN PHOENIX IN 2006. NOW I AM A BITTER RENTER IN 2006. AT THE SAME TIME I WAS READING THIS A TROLL WAS KNOCKING ON MY DOOR. THIS IS IN IRVINE, THE TROLL REALTORWHORE@ SAID WHY PAY RENT. i SAID BECAUSE IT IS CHEAPER THAN OWNING.AND THE PRICES CONTINUE TO DROP. TROLL RESPONSE BUT I HAVE DESPERATE SELLERS,,BUILDERS AND FORECLOSURES. I SAID I WILL WAIT UNTIL THEIR BLOOD IS RUNNING IN THE STREET. SO HOME DEBTOR THE PAIN IS JUST SO UN-BEARABLE.
hahahahhahahahahahahaha
wISE HP-ERS WILL KICK BUTT THROUGH OUR SUPERIOR MENTAL ABILITIES.
JP said...
My name is JP and I am a GeoArbitraging Bubblesitter.
In 98' my wife and I built a 1400 sq ft house on 3.5 acres of land which we cleared ourselves with a chainsaw and brushcutter...
Awesome story!!! It's the best bubblesitter story I've seen on this blog.
Buy if you think its a good deal and can afford it.
Rent if you think its a good deal and can afford it.
Anyone have Hamster Meat recipes?
Stuffed hamster with a cream sauce?
Man you people are funny. Do you really believe that renters don't have debt issues? You really have to get out and meet some new people.
I know plenty of people making $40K, $50K a year and wearing $350 jeans and yes renting. I wonder where they get the money for the jeans. Or where they get the money to go out every Friday night and blow $200 on drinks at a club or buy thousands of songs from iTunes every year. I think it starts with a "V" and ends with "isa".
I on the other hand make twice that much, own 2 homes (live in one rent the other), wear $80 jeans and have no credit card debt whatsoever.
There are renters in over their heads with debt. And there are home owners without a dime in debt and everything in between. This whole us vs. them battle is rather silly.
Bought 2001, sold 2003 to move up, sold that 3 weeks ago.
Enormous relief. Zero debt. Car repairs just set me back $1,300 and I never even got itchy about it.
Renting in the same neighborhood, closer to the beach than I've lived in my life, nice place if a bit run down, rent is $2500 less than combined mortgage/prop taxes, wife is quitting work.
We stress a bit because some day we mean to buy back in, in one of the most expensive neighborhoods in America, but we have some breathing room to wait it out. Whew.
I rent from a Desperate homedebtor-hamster and he came to me recently and told me since he is losing a lot of $$$ on the house he will need to raise the rent a couple hundrend $$$. He baught the house at the peak of the market ... SUCKER!!!
Already got a new place to rent from another Desperate homedebtor-hamster for less then this house and the new house is better!
Ok if we're all making up stories today here's mine.
I bought in 2000 for $100K. Sold in 2006 for $900K.
I don't work I just live off the $800,000 profit I made.
I live on a tropical island with a 22 year old ex-playboy model and her 21 year old ex-porn star best friend and they like to share everything if you know what I mean nyuk nyuk nyuk.
I know for sure after reading HP that my $900,000 home will soon be worth $200,000. I will swoop in and buy it for cash soon enough. Until then it's tropical island living for me and the two girls.
Oh and I paid off all my debts too.
Adios.
"See Keith at the end of the day it comes to living a life of balance. We could put away every cent we earn, live in a shithole apartment, drive a 15 year old shitbox and for entertainment rent a movie every Saturday night for $3.99. Your readers seem to think that is the way to go and pat themselves on the back for living a life of self-induced poverty. "
When I get tired of watching movies, your wife comes over and does me.
lol anon 9:16
"Gee I must be one dumb foolish, flashy homedebtor hamster"
http://www.hampsterdance2.com/hampsterdance2.html
Can I come over and do the hamster dance with you and the missus?
"Ok if we're all making up stories today here's mine.
I bought in 2000 for $100K. Sold in 2006 for $900K."
Scary thing is you *could* have done this in some areas of the country. Placing your fictitious limits thusly, and proceed to boast early retirement on $800K, tells much about your fly-over frame of reference. If you read between the lines of JP's post you will notice a tone of humility, of self doubt and disbelief, of personal growth and astonishment on windfall returns, basically somebody who would not craft such a tale for a venue like this.
"See Keith at the end of the day it comes to living a life of balance."
Dude, take a pill (or a toke). After reading this blog for a while, I don't think you're what anyone has in mind when they describe the "homedebtor" b.s. They're talking about the dolts who bought with idiot financing and stuff that is waaaaaaay overpriced all things considered and who are totally out of their leagues and over their heads. The problem with those purchases and the financing that was needed for those people to go out and commit financial hare kare was since appraisal values are all interconnected and the mortgage business has been so homogenized (spelling???) over the past several years, the idiot values assigned to some of these houses has been inflating everything far more than what is reasonable or logical. To extrapolate out the price increases that have taken place in the past 8 years or so, would mean that the lowest paid dude or dudette who is presently 6 years old will need to be pulling down $200,000 a year to be able to afford even the most modest of homes - it could happen but if it did, our currency would be practically worthless. You might as well print it on a roll kind of like toilet paper. You'd have to bring a briefcase of cash with you to go Christmas shopping or a few rolls of money to take your sweetie out on a date because your movie and popcorn is going to run you into the thousands of dollars. It sounds to me like you've watched your p&q's given what you've shared - btw, you might want to limit that, some of these nut jobs and be brutal when you expose a little too much info.
"I on the other hand make twice that much, own 2 homes (live in one rent the other), wear $80 jeans and have no credit card debt whatsoever."
Dude I beat you. I make 3 times as much , own 3 properties (1 McMansion and 2 apt. units in PHX), and wear $40 jeans!!!
$80 jeans??? Even that is an absurd ammount. I cant imagine 300.
I wear my jeans with the traditional Orange County douchebag uniform: jeans, black shoes and an untucked striped shirt.
How does this country have a negative savings rate, seeing as everyone on this board has so much money, gold, real estate, etc.? It sounds to me like everyone is doing quite well. My story? Okay, since everyone else likes to brag, I will too. I have no money, no debts, own a ten year old truck and have no interest in fiat currency today, because tomorrow I will be earning $100/minute watching all the savers money being burned up in a hyper-inflationary pyre.
To the guy who made up the story and said he now lived on an tropical island with an "ex-porn star".
So what is the biggest attraction about your fantasy?
1. That she probably has an STD?
2. That she probably was molested as a child?
3. Or that hundreds of other guys were there before you??
If thats what you would do if you came into money, you are basically a pathetic loser.
Halo2-
Wouldn't worry too much about bubble sitters flush with cash pushing the markey back up.
The reason? I think most of them plan to basically buy their next house outright with said cash. I know I do.
No funny money mortgages for me.
Cash or near cash buying should keep the market pretty sane for a while .
Wow anon 9:16, you really have your head in the sand if you think it's only the Warren Buffet and Pimco CEO's of the world who cashed in on this bubble.
All it took was a little common sense. And that is available to *all* classes of people.
$29 Bullhead Jeans from Pac Sun
$9 plain grey t-shirts
that's my staple.
and my daily driver...my late mothers 84 Volvo POS.
Outward appearances can be very deceiving.
Many wealthy people look poor.
Many poor people look rich.
Anon: "Where do I fit it in your little world of genius, spartan renter vs. foolish, flashy, broke owner?"
You're a smart-money guy who is living well, but still below your means. You're not a hamster!
A little self-centered, maybe, but not a hamster.
Even us po' folks can do it right.
Bought a house in a Big City, cheap. Bad area. Joined the neighborhood assoc., helped clean up the hood.
That made the house plenty more valuable. Sold for double what we paid. Moved to the country, paid cash for house & acreage. Poor but secure.
Right before they died, my Grand parents sold the family farm to "out of state" developers for $3.3M. -Nov 2005 Bubble peak.
Farmland worth $10K/acre went for $60K/Acre. (Just south of Fresno CA)
That's Cash, not options to by.
My net cut of the inheritance will be around $425K. I'm 38, single with no kids. Living in a new Seattle suburb condo. (30yr VA Fixed) I drive a 2004 corolla commuter car. -Paid for.
Comfortable Job, great bennies, with no worries beyond what to do with all that "bubble money" coming my way in 3 months. (any ideas?)
I'm tempted to "move up" to hamster status, up but I'll diversify like a good HP reader, with some of that out of US Dollar and some metals.
Will splurge on 2008 Challenger when they come out. (Chicks dig the Hemi.)
Oh yeah, my mom's been a REIC clerk for 23 years, just retired. It's been fun jerking her chain for the last 18 months.
(Thanks for the Ammo Keith!)
I've been immunized against REIC propaganda.
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