"Jim," wrote in message
...
wrote:

NOYB wrote:

There is one home (out of 31 for sale in my neighborhood) under 7
figures.
It's 1500 sq ft., was built in 1960, and is priced at $959k.


************

31 homes for sale in your "neighborhood"? Either its a big
neighborhood, or that full size Bush billboard in your front yard has
everybody p-o'd. :-) (kidding)

Illustrating my point, exactly. Lets say you paid $500,000 for you pad,
and it would now sell for
$1.3mm. If you sold your house for that price and needed to move to
another just as nice, it would cost you $1.3mm to buy an equivalent
home in the same area.

Now, if you had purchased two or more homes when they were selling for
$500,000 apiece- each of them beyond the one you consume each month by
living in it would actually be an "investment." If you sold two
investment homes corresponding to the above example you would have a
gross capital gain of $1.6mm, not a bad payoff for simply sitting
around cashing rent checks for a few years.


Ummmm -- Realtors commission, survey and other transaction expenses?

Assuming you can rent the properties 12 months out of the year, make the
payments on the mortgage, and pay the interest, taxes, and upkeep while you
owned them.

I can't afford to do that on my primary residence *and* and investment
property. At least not *yet*.

wrote in message
oups.com...
NOYB wrote:

The tax collector sees very little additional income from the rapid
appreciation. "Save Our Homes" ensures that the rate can't go up more
than
3% per year.

**************************

That's a local program, not a general economic situation. Does the 3%
limit millage, assessment, or total tax bill?

Assessment.

When the house sells,
does your program carry forward based on the taxes paid by the previous
owner (who purchased at a lower price) or does it extend to the new
owner who is usually replacing his previous residence with something
carrying an even higher price tag?

New owner pays the new assessed rate. It's *very* expensive to move from an
existing home because you lose the "Save Our Homes" protection.

There are a lot of folks who bought their homes on the water for $125k in
the 1960's. They're paying tax rates that are around $2-3k per year on
properties worth $1.5million. When they sell and downsize to a new condo
that they buy for $300k, their taxes *increase*. Of course, the $1.2
million that they netted from the move can pay for a whole lotta' years at
the new tax rate. ;-)

"P.Fritz" wrote in message
...

"NOYB" wrote in message
ink.net...

wrote in message
ups.com...
NOYB wrote:

Chuck is the first person that I've heard say that a home in a rapidly
appreciating real estate market is *not* a good investment.

****************************

I'm seriously surprised.

Your house is a house. It's not an investment. Sky high and soaring
housing prices are only a good thing if you own other real estate in
addition to your primary home. You can have your home, (which you
need), or the money tied up in it, but not both.

When you cash out an "investment" your options in life should increase
substantially. When you cash out your house, you get to live in a yurt.

But a really, really nice yurt.

Of course, I could retire to Snellville, buy an entire trailer park, and
still put a million in my pocket.

I'm really beginning to wonder about some people. An increse in net
worth is an increase in net worth.

You will have a housing expense whether you rent or invest in a residence.
The tax law allows you to invest in a better space than you could rent for
the same net cost.
Your equity is protected from brankruptcy judgement,
The first (150k -250k) capital gains is typically tax free.
Damn good investment to me.


Let's spread the word! Imagine how high house prices would be if *everybody*
knew how wonderful and investment it is. Of course, the monthly income from
Chuck's rental properties would go to ****...

Here's the real life example:
I paid $825k for the current home on the water.
The last house to sell just like mine sold for $1.225m.
After realty and closing costs, I'd clear about $360k

I sold my old house for $560k last year (not on the water)
The last house to sell like my old one just sold for $625k.
If I bought the new house for $625k, after closing costs, I'd be in it
for
under $650.


So I would net a quarter of a million dollars if I sold my current home
and
bought my old one again.


That's profit, right?


*****************

No, it's merely the reorganization of numbers on the asset side of your
balance sheet. Even if your house was in investment, you haven't
realized a gain until you sell it. Your neighbor's sale didn't put any
money in your pocket. You need the house to live in. The amount of
money the house is worth is meaningless, as long as you are going to
personally consume the asset by taking it for exclusive use.

The good news is that if the average income in Nipples doubles in the
next couple of years, (is that likely?) your $1.2mm pad will be "worth"
$2.4mm. The bad news is that if you sell the one you've got, and don't
elect to lower your standard of housing, you'll simply have a higher
number attached to an asset you don't have the flexiblity to sell.

Now, it you had purchased *two* or more homes for $825k and sold oneof
more of them for $1.225, that $400k spread would indeed be gross
profit. You'd probably walk off with about $300k net after
commissions, cap gains taxes, local conveyance taxes, etc. Selling your
personal house, and immediately replacing it with one costing as much
or more, does not create "profit".

wrote in message
ups.com...
Here's the real life example:
I paid $825k for the current home on the water.
The last house to sell just like mine sold for $1.225m.
After realty and closing costs, I'd clear about $360k

I sold my old house for $560k last year (not on the water)
The last house to sell like my old one just sold for $625k.
If I bought the new house for $625k, after closing costs, I'd be in it
for
under $650.


So I would net a quarter of a million dollars if I sold my current home
and
bought my old one again.


That's profit, right?


*****************

No, it's merely the reorganization of numbers on the asset side of your
balance sheet. Even if your house was in investment, you haven't
realized a gain until you sell it. Your neighbor's sale didn't put any
money in your pocket. You need the house to live in. The amount of
money the house is worth is meaningless, as long as you are going to
personally consume the asset by taking it for exclusive use.

The good news is that if the average income in Nipples doubles in the
next couple of years, (is that likely?) your $1.2mm pad will be "worth"
$2.4mm. The bad news is that if you sell the one you've got, and don't
elect to lower your standard of housing, you'll simply have a higher
number attached to an asset you don't have the flexiblity to sell.

Now, it you had purchased *two* or more homes for $825k and sold oneof
more of them for $1.225, that $400k spread would indeed be gross
profit. You'd probably walk off with about $300k net after
commissions, cap gains taxes, local conveyance taxes, etc. Selling your
personal house, and immediately replacing it with one costing as much
or more, does not create "profit".



Round and round we go...where it stops nobody knows.

wrote in message
ups.com...
Here's the real life example:
I paid $825k for the current home on the water.
The last house to sell just like mine sold for $1.225m.
After realty and closing costs, I'd clear about $360k

I sold my old house for $560k last year (not on the water)
The last house to sell like my old one just sold for $625k.
If I bought the new house for $625k, after closing costs, I'd be in it
for
under $650.


So I would net a quarter of a million dollars if I sold my current home
and
bought my old one again.


That's profit, right?


*****************

No, it's merely the reorganization of numbers on the asset side of your
balance sheet. Even if your house was in investment, you haven't
realized a gain until you sell it. Your neighbor's sale didn't put any
money in your pocket. You need the house to live in. The amount of
money the house is worth is meaningless, as long as you are going to
personally consume the asset by taking it for exclusive use.

The good news is that if the average income in Nipples doubles in the
next couple of years, (is that likely?) your $1.2mm pad will be "worth"
$2.4mm. The bad news is that if you sell the one you've got, and don't
elect to lower your standard of housing, you'll simply have a higher
number attached to an asset you don't have the flexiblity to sell.

Now, it you had purchased *two* or more homes for $825k and sold oneof
more of them for $1.225, that $400k spread would indeed be gross
profit. You'd probably walk off with about $300k net after
commissions, cap gains taxes, local conveyance taxes, etc. Selling your
personal house, and immediately replacing it with one costing as much
or more, does not create "profit"

But my example had me replacing my current house with my old house (which,
BTW, is a nicer *house*...but not on the water). And when I was done with
everything, I'd end up in my original house with a mortgage that had been
reduced by $250k in just one year. How'd I reduce my mortgage by a quarter
of a million dollars in one year? From the *PROFIT* I made in the house on
the water.

Waterfront homes are appreciating at twice the rate of non-waterfront homes.

"JimH" wrote in message
...

wrote in message
ups.com...
Here's the real life example:
I paid $825k for the current home on the water.
The last house to sell just like mine sold for $1.225m.
After realty and closing costs, I'd clear about $360k

I sold my old house for $560k last year (not on the water)
The last house to sell like my old one just sold for $625k.
If I bought the new house for $625k, after closing costs, I'd be in it
for
under $650.


So I would net a quarter of a million dollars if I sold my current home
and
bought my old one again.


That's profit, right?


*****************

No, it's merely the reorganization of numbers on the asset side of your
balance sheet. Even if your house was in investment, you haven't
realized a gain until you sell it. Your neighbor's sale didn't put any
money in your pocket. You need the house to live in. The amount of
money the house is worth is meaningless, as long as you are going to
personally consume the asset by taking it for exclusive use.

The good news is that if the average income in Nipples doubles in the
next couple of years, (is that likely?) your $1.2mm pad will be "worth"
$2.4mm. The bad news is that if you sell the one you've got, and don't
elect to lower your standard of housing, you'll simply have a higher
number attached to an asset you don't have the flexiblity to sell.

Now, it you had purchased *two* or more homes for $825k and sold oneof
more of them for $1.225, that $400k spread would indeed be gross
profit. You'd probably walk off with about $300k net after
commissions, cap gains taxes, local conveyance taxes, etc. Selling your
personal house, and immediately replacing it with one costing as much
or more, does not create "profit".



Round and round we go...where it stops nobody knows.

I wonder if he agrees with asslicker that schnapps is whiskey...........it
make as much sense.

"P.Fritz" wrote in message
...

"JimH" wrote in message
...

wrote in message
ups.com...
Here's the real life example:
I paid $825k for the current home on the water.
The last house to sell just like mine sold for $1.225m.
After realty and closing costs, I'd clear about $360k

I sold my old house for $560k last year (not on the water)
The last house to sell like my old one just sold for $625k.
If I bought the new house for $625k, after closing costs, I'd be in it
for
under $650.


So I would net a quarter of a million dollars if I sold my current home
and
bought my old one again.


That's profit, right?


*****************

No, it's merely the reorganization of numbers on the asset side of your
balance sheet. Even if your house was in investment, you haven't
realized a gain until you sell it. Your neighbor's sale didn't put any
money in your pocket. You need the house to live in. The amount of
money the house is worth is meaningless, as long as you are going to
personally consume the asset by taking it for exclusive use.

The good news is that if the average income in Nipples doubles in the
next couple of years, (is that likely?) your $1.2mm pad will be "worth"
$2.4mm. The bad news is that if you sell the one you've got, and don't
elect to lower your standard of housing, you'll simply have a higher
number attached to an asset you don't have the flexiblity to sell.

Now, it you had purchased *two* or more homes for $825k and sold oneof
more of them for $1.225, that $400k spread would indeed be gross
profit. You'd probably walk off with about $300k net after
commissions, cap gains taxes, local conveyance taxes, etc. Selling your
personal house, and immediately replacing it with one costing as much
or more, does not create "profit".



Round and round we go...where it stops nobody knows.

I wonder if he agrees with asslicker that schnapps is whiskey...........it
make as much sense.



Some folks just cannot find it in themselves to admit when they are wrong.

wrote in message
ups.com...
Here's the real life example:
I paid $825k for the current home on the water.
The last house to sell just like mine sold for $1.225m.
After realty and closing costs, I'd clear about $360k

I sold my old house for $560k last year (not on the water)
The last house to sell like my old one just sold for $625k.
If I bought the new house for $625k, after closing costs, I'd be in it
for
under $650.


So I would net a quarter of a million dollars if I sold my current home
and
bought my old one again.


That's profit, right?


*****************

No, it's merely the reorganization of numbers on the asset side of your
balance sheet. Even if your house was in investment, you haven't
realized a gain until you sell it. Your neighbor's sale didn't put any
money in your pocket. You need the house to live in. The amount of
money the house is worth is meaningless, as long as you are going to
personally consume the asset by taking it for exclusive use.

The good news is that if the average income in Nipples doubles in the
next couple of years, (is that likely?) your $1.2mm pad will be "worth"
$2.4mm. The bad news is that if you sell the one you've got, and don't
elect to lower your standard of housing, you'll simply have a higher
number attached to an asset you don't have the flexiblity to sell.

Now, it you had purchased *two* or more homes for $825k and sold oneof
more of them for $1.225, that $400k spread would indeed be gross
profit. You'd probably walk off with about $300k net after
commissions, cap gains taxes, local conveyance taxes, etc. Selling your
personal house, and immediately replacing it with one costing as much
or more, does not create "profit".


Another example for the slow and/or stubborn:

Chuck has $100k. He buys a house not on the water for $500k, and puts 20%
down. His mortgage is $400k. In one year, he sells the house for $575k.
He pays off the mortgage and the realtor, and walks away with $135k.


NOYB has $100k. He buys a house on the water for $1m, and puts 10% down.
His mortgage is $900k. In one year, he sells the house for $1.5m. He pays
off the mortgage and the realtor, and walks away with $510k.

They both decide to buy a new home next to each other. The purchase price
is $500k. Chuck puts $135k down, takes out a new loan for $365k. NOYB pays
cash...and uses the extra $10k leftover to buy a trailer for his boat...and
a new T-top, kicker motor, and fishfinder. The money that NOYB would
normally pay towards a mortgage on a home now goes towards buying a second
home in the mountains.

Chuck says "How the hell did that happen!?!?"

NOYB wrote:
wrote in message
ups.com...
Here's the real life example:
I paid $825k for the current home on the water.
The last house to sell just like mine sold for $1.225m.
After realty and closing costs, I'd clear about $360k

I sold my old house for $560k last year (not on the water)
The last house to sell like my old one just sold for $625k.
If I bought the new house for $625k, after closing costs, I'd be in
it
for
under $650.


So I would net a quarter of a million dollars if I sold my current
home
and
bought my old one again.


That's profit, right?


*****************

No, it's merely the reorganization of numbers on the asset side of
your
balance sheet. Even if your house was in investment, you haven't
realized a gain until you sell it. Your neighbor's sale didn't put
any
money in your pocket. You need the house to live in. The amount of
money the house is worth is meaningless, as long as you are going
to
personally consume the asset by taking it for exclusive use.

The good news is that if the average income in Nipples doubles in
the
next couple of years, (is that likely?) your $1.2mm pad will be
"worth"
$2.4mm. The bad news is that if you sell the one you've got, and
don't
elect to lower your standard of housing, you'll simply have a
higher
number attached to an asset you don't have the flexiblity to sell.

Now, it you had purchased *two* or more homes for $825k and sold
oneof
more of them for $1.225, that $400k spread would indeed be gross
profit. You'd probably walk off with about $300k net after
commissions, cap gains taxes, local conveyance taxes, etc. Selling
your
personal house, and immediately replacing it with one costing as
much
or more, does not create "profit".


Another example for the slow and/or stubborn:

Chuck has $100k. He buys a house not on the water for $500k, and
puts 20%
down. His mortgage is $400k. In one year, he sells the house for
$575k.
He pays off the mortgage and the realtor, and walks away with $135k.


NOYB has $100k. He buys a house on the water for $1m, and puts 10%
down.
His mortgage is $900k. In one year, he sells the house for $1.5m.
He pays
off the mortgage and the realtor, and walks away with $510k.

They both decide to buy a new home next to each other. The purchase
price
is $500k. Chuck puts $135k down, takes out a new loan for $365k.
NOYB pays
cash...and uses the extra $10k leftover to buy a trailer for his
boat...and
a new T-top, kicker motor, and fishfinder. The money that NOYB would

normally pay towards a mortgage on a home now goes towards buying a
second
home in the mountains.

Chuck says "How the hell did that happen!?!?"

Yeah, how DID that happen, when you've stated here that you have an
interest only mortgage? Not only did you NOT pay cash, you're not even
paying down the balance.