Impulsive Desires

**S928** · Sep 8th, 2008, 06:43 AM

It's been a few years since I've made a real estate purchase and I'm now getting the bug. After looking at real estate prices in northern California (Solano County), and seeing how much prices have dropped (up to 50%), I've been thinking about buying a home for investment purposes.

Price: 190k
3/2/2
1450 sq ft

Property tax $1900/yr
20% down

Rent $1600

The numbers don't add up when I factor in all the expenses (mortgage, prop tx, insurance, mgmt fees), but my costs would barely be covered if the home were rented. However, I'm sooooooo tempted to pull the trigger because I've always wanted to own a home in CA. Since prices have dropped so much, I feel that now is the time to buy. Better yet, I can see myself living in the home I would purchase. What to do? Follow my heart or my brain?

**Dhappy** · Sep 8th, 2008, 07:02 AM

Buying for yourself is not the same as buying for a investment.The home we live in would not cashflow as a rental, but we wanted it. I would not of bought it for a investment. I look for a $500 a month cashflow on my rentals. I pay 20k cash and they are worth 40k and rent out for $600-$700 a month. They are M.H. on there own land. If you want to live there, then buy it. I would pass on it as a rental.

**MsMoney** · Sep 8th, 2008, 10:51 AM

I agree with D Happy. You need to determine if this is going to be a personal residence or not. First rule of thumb...NEVER get emotionally tied to any property (unless it's your primary residence). If the numbers don't work on an investment, don't do it! I really don't even "fall in love" with my primary unless the numbers work for me there as well (I think it's just the thought of throwing good money after bad on something just kills me!)....

Once you decide on that, let us know what you plan to do.

**NoMoneyDown** · Sep 8th, 2008, 11:00 AM

I support the other posters. Matter of fact, I'm like MsMoney when it comes to my personal residence now. I look at ALL the characteristics before becoming emotionally attached. My wife and I have been looking for a new personal residence since May of this year. We've found many that just a year ago I would have jumped on, but we are still being patient. Just this past weekend, we saw two REO's that we thought would be winners, but after discussing the pros-and-cons with one another, have decided to pass. Both are in great neighborhoods, and one even backs to a pond and golf course and doesn't require too much work. They just didn't work for us (layout, congested arterial roads, other). Plus with all the new rules about to kick in, we are biding our time for some REALLY good deals to surface.

**Sid23** · Sep 8th, 2008, 11:21 AM

Originally Posted by S928

It's been a few years since I've made a real estate purchase and I'm now getting the bug. After looking at real estate prices in northern California (Solano County), and seeing how much prices have dropped (up to 50%), I've been thinking about buying a home for investment purposes.

Are you familiar with Northern California cities? If not, do your research before buying something in Solano County. It is not known as a "desirable" place to live in California.

I find that a lot of people I know who are not from CA think of it as one big paradise. Nothing is further from the truth. Sure, the SF Bay Area is amazing, Napa/Sonoma, and LA, San Diego and all the beach towns are great, but most of CA is just like living anywhere else.

If you know CA, totally ignore my comment.

Thanks.

**S928** · Sep 11th, 2008, 10:38 AM

Indeed, impulsiveness rarely ever pay offs and I have since cooled down. In the end, I decided that from a personal and investment standpoint, the numbers didn't add up.