Question on 2nd Home purchase

[Larry Mankins]

Summary details:

Have good job, want and can afford 2nd house payment and down payment on retirement/vacation/SHTF home. Can raise 35%-40% down pmt. House at lake can rent by night/weekly, probably 4-5 weeks/year conservatively.

Bought at top of market on primary residence, now upside down on 1st home w/ (interest only) mortgage - probably won't come back to break-even for 5 years, don't want to think about bailing, but don't want to put more good money after bad into house. Have 2nd Mortgage also.

Credit in 790 range

Am I dreaming fruitlessly of owning second property? Ideas?

:roll:

[Bill Gulley]

Hi, so you want a second home...I have had a second for 15+ years. It's on the lake front, great view, 50 miles from my primary home. etc. I paid cash for it so there has never been a mortgage on it. I used it every weekend the first summer and several times in the off season. It was great having friends and even realitives down. Second year, used it about 6 times in the summer and a couple times in the off season. Year 3, a couple times in the summer and winterized it.

Here's what you get for those stays at the lake:
Insurance, real estate taxes, utility bills and a neighbor that calls to see if you're going to cut tree limbs that block their view.
You'll have trips to go mow grass, pick up the yard, and winterize the place. Some evening you'll be watching TV and see the weather and you realize that there will be a hard freeze and you have not winterized the place, change of plans, gotta go to the cabin!
My property is next to one neighbor, the state owns a reserve next door and there is a private road beyound the state property. The road gets washed out on the state side, so there are maintenance issues, ever try to get a state agency to fix a road in the middle of nowhere that are really only used by you and few others? Then comes the ice storms and downed tree limbs, knocking out power. Oh, no power, that's OK, I'm not there! Nope, the hot water heater was not on so it froze and burst! I was happy to find that a few months later when I turned the water on. Did I tell you that it was in the woods on the water, where all the critters live, you move out, they want to move in! Then the well goes out, well, there is another grand!
Then the roof leaked along a second story sunroom that is built up on posts over a ledge. When I found that, windows had broken because the frame work had been damaged and settled. So, I went in and spent a little over fifteen grand to remodle it and raised the roof while I was tearing out all the walls! So, it got a new metal roof. Then comes a new owner of a property down the road who decides he wants to fence his place and block a road easement to a lake cove...well, now I have a legal battle over the easement and a real Ozarks feud going! Then, my 80+ year old neighbor decides to shoot at a cougar (he claims) with a shot gun and shot the propane line, lucky the tank was turned off, but he forgot to tell me before I turned it on and let it spew out until I tracked down that sound! Then came the great flood of 08, my place was high and dry, but I had truck loads of crap that washed up in the yard.

But having a property on the lake is relaxing, if you get up early. Every weekend you might as well get up at 5 am becuase there will be 80 to 120 bass boats buzzing by for the fishing tournements! You'll want to stay late on weekends too because the kids like to party a quarter mile out, have you ever heard how far rap travels over water in the middle of the night?

I'd suggest you find a second home at a Holiday Inn! They have them all over the country. You can pick out a new one to visit every weekend and do so until you get it out of your system alot cheaper than owning a second home.

My sister has one and rents it out with a management company. They send her bills for things she never dreamed would pop up. She found a broken window and tried to get the last weekend renter held responsible, nope, a bird flew in to that window while they were there! The company has its own rentals too, so guess which units are rented first.

And you want a second home! Good luck with that. Bill