All Forum Posts by: JD Martin

 I would go for RTA cabinets, as you are going to get a better quality box for the price of junk at HD/Lowes. Buyers will open doors and notice.

 Hardwood floors - there are a lot of options. If you can find flooring & install for $5/sf or less you have done really well. 

I disagree with @Paul Choate's post. I have no love for banks, credit cards or financial institutions. They're just businesses like anything else. I don't think anyone technically owes them anything - interest is part of the risk the lender takes that the borrower defaults, and charges accordingly. And bankruptcy - a fresh start - is an accepted way of dealing with situations that get so far out of control that they would be ridiculously onerous on those forced to do the payback. 

My problem with easily absolved financial situations that are wiped through bankruptcy is that it raises the cost of doing business for those who feel they have an ethical, if not an absolute legal, responsibility to pay back what they've borrowed - especially when the borrowing was done for goodies like new trucks, motorcycles and poker night. There may not be a financial difference between the guy who owes $27k on new cars and nice clothes, and the guy who owes $27k because his wife was stricken with cancer, but there sure as hell is an ethical difference in my opinion. I don't necessarily mind paying a little more in interest to take up the slack for people who had real problems, but I'm not interested in paying on the back end for someone to run around in a 2014 truck that they could only afford when working.

In this case, you're talking about someone being able to probably make everyone whole in 1-1.5 years, that has no wife or kids to take care of, and is really only considering it from the point of having to delay school for another semester in order to meet the obligations. It may be legal to file in this case, but I don't think it's ethical, and failing to take responsibility for one's actions is more detrimental long-term for the poster than the short-term benefit of wiping out the debts and leaving the wreckage in his wake. What does he learn? That when things don't go as plan, you don't just buckle down and ride out the storm, you abandon ship, every man for himself. 

I own and buy rental SFHs. After 4 years of no housing expense, I assume you've compiled enough money to buy something cash that maybe needs some work, or something like a condo that you can own outright? If so, in your market you may be better off financially renting something inexpensive and putting your capital to work in a cheaper market that you have some knowledge of. 

 I don't know what your rates are out in California, but here in TN upper 4's is the best you are going to do on an investment mortgage. 

 I agree with this post, but I also agree with the "justification" posts. You, as the buyer, have absolutely no way of knowing what the seller is receiving in the transaction outside of the cash you are offering. You are assuming that because money is the primary motivator for you in the transaction, that it is the primary motivator for the seller as well, and thus it is a zero sum game - you win, they lose. 

The reality is that sellers receive all kinds of benefits, and consequences from selling, and you might actually rob them of some of the benefits, or saddle them with some of the consequences, by your noble endeavor of tossing them more money. For example, what if the seller only wants $100k because they believe that the foundation is shifting for some reason that no one will ever be aware of through disclosure, and you come along tossing them $120k? They may walk away with a heavy guilt burden, because they were "self-policing" by reducing their price to what they felt was fair given the condition of the house. 

The point is that you can always do what you think is right. If you feel bad because you're squeezing military widows for an extra 5 grand, knowing they have nowhere else to turn, maybe you should feel bad. But if you're just making honest, open deals, have some respect for the buyer that you are not proxy to all the reasons they want to sell, and all the benefits they are receiving at $X dollars. I saw a guy on TV once that won $10 million in the lottery, and he said it was the worst curse he had ever received and was in the process of giving it all away. 

Without reading all the other posts, in case I'm repeating what someone else said, my thoughts in no particular order:

1. That you even think about these things show that you have a conscience, and that alone will (should) prevent you from doing anything dastardly.

2. You are assuming that the sellers are not acting in their own best interest by assuming that you could make their situation better, when the truth is you are projecting what may or may not happen if you did something else. You don't really know if the other buyer would actually be ready to buy that house, or wouldn't say a bigger number to get you down the road and then give them less when you're out of the picture. You may be the best option they have of a bunch of bad options.

3. Unless you are kicking little old widows out of their 40 year homes, most of the "equity" you're taking from the seller probably was never something they worked for in the first place, but simply beneficiaries of an appreciating market. 

4. What's the difference between getting a great deal on a house and getting a great deal on a used car, or something at the flea market? It's only factors of zero. If you go to the flea market, and you someone selling something for $20 and you know a guy that would give them $30, do you call that guy? 

5. By assuming that you are fleecing the seller, you are also assuming that the seller is a stupid or ignorant person, unable to function in a voluntary market, in need of a guardian to protect their own interests. That's a real paternalistic attitude that is demeaning to the seller. Maybe they don't need as much as you can get them. Maybe they want something quick and easy. Maybe they feel bad asking for more because they know things you don't know (and they're not willing to share). Maybe they inherited the property. 

I don't think there's anything wrong with the way you're feeling. You can always offer more money to ease your conscience if you still believe you can make a profit, just less so of one. There's nothing stopping you from paying $5, $10, or $100k more than the seller is willing to accept except your own self interest. If you need to overpay to feel good about the deal, there's nothing wrong with that - but you don't need to rationalize it by projecting your feelings about the deal on to the seller or the business as a whole. 

I don't know what field you worked in before coming into RE. I have worked some type of public service my entire career, and my experience is everyone from the shark capitalist to the church-going widow understands their immediate (maybe not long-term) self-interest better than anyone else. Every time I have thought someone was acting not in their own best interest, it was always a long view, not a short view. 

So for myself, I ask only the questions I want to know the answers to, and generally those don't include anything about the other person's well-being. It's not my responsibility to take care of the world, just to try to do good things and be a decent person while I'm here. 

I agree with @Wayne Brooks. I wouldn't give you a mortgage 10 months out from a BK. Did you get a pre-approval from your bank before you signed a contract & started pumping money into inspections & the like? 

If you have any kind of gas appliance I would leave them be and make sure they work. If you don't have any gas appliances, it's really up to you because there's not really anything to produce CO2. 

Don't do anything with them unless they have annual fees. Having available credit that is unused will help your overall credit score. You always want to aim for a high available credit/appropriated credit ratio. Someone with access to $20k and has used none of it is (usually) a better credit risk than someone with access to $40k and has used $20k of it. 

This assumes you have enough willpower to not use them. If you don't, then you should probably keep the accounts open but cut up the cards so you cannot use them without great effort. 

Answer: You don't. You will have to see when you get there or invest elsewhere.