My New "Restovation" Blog

I've decided to continue this blog in a new one about the restoration and fix-up of my house (yup, escrow closed and it's mine).

http://cliffmay.blogspot.com

Stephen

P.S. If you crave homeownership you really should look at what my company does (First-time buyers are our specialty and focus!): http://www.meadefirst.com

Reality Sets In: All the things I didn't think about...

I'M STILL JUST AS THRILLED WITH THE HOUSE BUT...

I had one of those funny moments yesterday. You know, the kind where the magnitude of a decision suddenly hits you. If you're still not imagining it, just think of what a first time skydiver feels when it's his (or her) turn to jump.

Am I having any regrets. No. But I have started to think about all of the logistics -- most of them which will cost money. Here's just a sampling of the "revelations" I've been having:

My Lease

Actually, I had this revelation moments after my offer was accepted. I just (and by "just" I mean about 30 days ago) signed a new one year lease on my apartment. I also remember the leasing lady mentioning that the lease breakage fee had gone up from one month's rent to $2000. Ugh. According to my leasing office I have three options: 1. Fork up $2000 2. Be "rent responsible" until the leasing office can re-rent my place or 3. Find someone to takeover my lease. I think I'm gonna try option number three and place an ad in Craigslist. If you know anyone who wants to rent a premium-view place, let me know:





Lawmower

This is one of those odd things I woke up in the middle of the night realizing: I will have a lawn! It's been over a decade since I've mown a lawn. I don't even have a lawn mower. According to Home Despot, I'm going to need to ante up $80 for this:


Laundry Equipment

As of July 15th I will be a slave to the laundry mat (also known as a "Washateria" in Los Angeles) if I don't buy a washer and dryer. This is real money folks. The way I look at it, I can spend $250 for a nightmare or $1000 for one of those neat-o combination washer/dryers. Now, one would expect that by housing both the washer and the dryer in the same unit, there would be some cost savings. Nope. The Top-O-The-Line LG unit is $1700!!! (exactly the same price as the top of the line washer and top of the line dryer bought as separates).

What's Next...

Tomorrow morning is my home inspection...I'm a bit nervous. With a 50 year-old house there's a lot of potential for problems here. I'll post about the report as soon as I get it.

Stephen

I didn't have to wait very long...

BIG NEWS...

As I said before, my agent and I decided on a 24 hour expiration on our offer -- we didn't want to wait. So here's how the story went:

8:00AM: Offer faxed over to listing agent.
10:00AM: Listing agent calls my agent and leaves voice message about being insulted by the offer price and inquires about my flexibility in that area.
12:30PM: Listing agent calls my agent and leaves a second message: "We'll take your price but we're countering a couple of terms."

YAY!!!!!

Stephen

Making a Decision

It always comes down to making a choice...

Tonight I made the decision to move forward on the house I saw last week. Since I've been thinking about homeownership for so long, I'm very confident that this is the house within my budget parameters that I want. I'm so excited that I don't know if I can sleep. I still have tons of questions going through my mind...

Did I offer the right price?

One of the hardest things to do is to decide in your mind, "What is this house worth to me?" I looked at comps, I pretended to be an appraiser and thought of all the "adjustments" I would be making. I thought about the fact that it was on the corner of a moderately busy street. Then I wrote it all down -- I cannot emphasize how much clearer things become when they're written down on paper. And at the end I had that elusive number, the maximum I was willing to pay.

Of course, then I had to decide what amount I was willing to offer. Here's where an experienced real estate agent can really help out. Being "in the biz" and the biggest control-freak in three counties, I decided to handle the negotiating strategy myself. It turns out, both my agent and I came up with the same recommended strategy: when the house is vacant, offer low and let the sellers respond.

Am I making an emotional decision?

Do not let anyone tell you otherwise: homebuying is an emotional process. Choosing to become a homeowner is a major lifestyle change. Naturally, it's not just about the numbers. Even for someone as analytical as myself, I realize the importance and necessity of making an emotionally congruent decision -- it not only needs to look right analytically, it needs to feel right. The flip side: I'm a little apprehensive that I may have opened Pandora's Box. How much emotion is enough? How many is too much? I think this is balance that every prospective homebuyer needs to come to terms with.

Did I mention how excited I am? At least my agent and I decided to put a one day expiration on the offer. That means I'm guaranteed under 24 hours of torture while waiting. I'll let you know how it goes. Oh yeah, for those of you interested, here's a photo. As you can see, I have a very good eye for potential :)






Stephen

Fate?

Do you believe in fate?

I wasn't completely honest in my last entry. I have been very lucky in always having an interesting and unique place to live. Given that I work from home, my home environment is important to me.

For as long as I can remember I have had an interest in Mid Century Modern architecture. That style describes forward-looking, open, minimalist designs from the late 40, 50s, and 60s. There's even an online message board for people like me: Lotta Living. Unfortunately, there aren't very many condo complexes in that style -- at least not around here in my price range. There are, however a couple of tracts of reasonably-priced (Ha! I can't believe I call $600,000 "reasonably-priced) single family homes. Below is an example of one:


The Fate Part

On Friday, a happen to see a listing for a house that I hadn't seen before, which was very peculiar since it had been on the market for a month. Even those of you not terribly familiar with real estate will know that a house on the market for over a month, under $1,000,000 is very rare in Orange County.

I met a good friend of mine, Erica Yamaguchi (she's a real estate agent too) for lunch. I was talking about the new listing and she casually mentioned that it looked vacant and she had her lockbox key on her...in we went.

So it turns out there's a place that affordable for me (barely -- and I'll talk about that later), has some unique architectural style, good location, and it appears that very few people can see the potential in the property but me. Is it fate? I try very hard to remain objective and not make an emotional decision, but it's really tough.

All weekend long I've been preoccupied with..the House. I can't keep my mind off it. As a counter-measure, I've been trying to think of all the objective ways to evaluate the property: Is it in a good location for long-term value appreciation? Is it a flexible property that could be rented out at a later date? Can space be added? I think I'm going crazy!

Stephen

Choices

"The first home you buy will probably not be your last."

I'm currently torn between two strategies:

1. Buy a nice 2 bedroom condo in the low 4s and rent out one of the bedrooms.

2. Buy a small, older, single family home for about $600,000 and rent out two of the bedrooms.

Interestingly, when it's all said and done, the cost to me is about the same. Sure, the condo has a lower purchase price but I can only rent out one room and most condo complexes have association fees of $250 to $300 per month. In fact, here's an interesting fact: Assuming a 5% interest rate, a $300/mo association fee is equivalent to a property costing $72,000 more!!!

However, there is a big lifestyle difference between having one roommate and having two roommates. Right now I have zero roommates. Unfortunately, it's a decision that only I can make. Unlike above, there's no snazzy numerical approach to calculating the extra inconvenience from having another roommate. I've thought about making a pluses and minuses comparison chart, but somehow I think this might be one of those decision best made from the gut. (Whoa, I'll probably never say that again)

Stephen

Introduction

IT'S TOUGH. IT'S EXPENSIVE. IT'S SCARY. IT'S EXCITING. IT'S INSPIRING. I've made the decision to purchase my first home in Orange County, California.

Those of you familiar with my company: MeadeFirst may be surprised to learn that despite helping many first time homebuyers and first time property investors, I'm currently a renter (I even cringe when I type it). Personally, I've used all the excuses: income not stable enough, not sure about the future, just plain scared...

I believe there's a unique moment in life when one decides that failure is not an option. The word itself, is removed from one's vocabulary. I also remember an interesting quote from a friend of mind; it seems particularly important here: "You never really make any money until you have a mortgage payment."

Also, there's the logicical side of things. While being a business owner means paychecks are irregular, for over the past 2 years I've paid nearly $1400/mo to rent -- and I've never been late. To those of you out there in similar positions I pose the following question: What are you waiting for? I asked myself and I couldn't come up with a real answer, so here I am.

Stephen