Are prices like this everywhere?

[ultrarunner]

One thing I had to consider was I was getting married when my then fiancé and I bought our fist house. I wasn't going to put my wife in a sketchy neighborhood. So we bought on the EDGE of a sketchy neighborhood. It served us well for 11 years, but when our child turned 3 we saw the neighborhood getting rougher, so we moved.

Now some would say the neighborhood we moved into is sketchy, but it's not. It's lower income, but very little crime. A good mix of adults of every ethnicity. Can't say I ever see teenagers out and about anymore.

We thought about keeping our first house as a rental. Instead, we put it in a blanket mortgage with this house to get over 20% equity in the total so we could buy this house with no money down and no need for the mortgage insurance. Then we sold that 1st house and put it all down on this house, which gave us about 60% equity in this house, which we would have paid off in 5 years, had my father not passed away. He left us enough to pay it off 2 years early, so that was a nice 2 year boost in savings.

As I've mentioned before, I'm not cut out to deal with renters due to my past experiences helping my father manage and liquidate the units his parents could no longer manage due to bad tenants.

I have no regrets on that decision and neither does my wife.

About the only regret I have is not purchasing a duplex or triplex in Lafayette, IN before my kids went to Purdue! Had I known both of them were going to go there, it would have saved $80K in rent over 9 years, plus the other tenants would have helped towards the purchase cost, plus the housing market went nuts right after the last one graduated, and we could have made a small fortune by selling it.

Ah good old 20/20 hindsight.

Several Docs bought rent homes when their kids went off to UCLA and Santa Barbara and Berkeley.

My first little 1910 cottage of 600 square feet was in the heart of the worst neighborhood in what is called deep East Oakland.

Came home and said I made an offer on a house… you did what???and the next day the Realtor called to congratulate me!

When I bought the neighborhood was 100% African American and now is 100% Spanish Speaking… it never went through the Asian ownership phase as many others in the city.

My step grandfather came to take a look and told my grandmother I had just flushed my life savings but I was young and would learn the hard way.

She asked if he shared his thoughts and said no because I was so excited about being a homeowner at 21… sure it was to be condemned but I had 10 days to reverse that and did.

That little home no one wanted cost me $11,500 to buy and last year was over 400k but even if it drops 50% I’m still good… only second renter since I moved.

 

[MossRoad]

We definitely have 4 seasons where I live.

We saw Jersey Boys at the theatre last year!

 

[ultrarunner]

We bought a new car a couple of years ago and a promotional rebate was only available if it was financed, so we financed it and paid it off a couple of months later. I believe our score was around 850. We had not had any debts for several years before that. Credit card is paid off monthly.

850 is perfect FICO… almost mythical but does exist…

You can write your own ticket as they say…

 

[MossRoad]

Several if the Docs bought a rental when their kids went off to UCLA and Santa Barbara and Berkeley.

My first little 1910 cottage of 600 square feet was in the heart of the worst neighborhood in what is called deep East Oakland.

Came home and said I made an offer on a house… you did what and the next day the Realtor called to congratulate me!

When I bought the neighborhood was 100% African American and now is 100% Spanish Speaking… it never went through the Asian ownership phase as many others in the city.

My step grandfather came to take a look and told my grandmother I had just flushed my life savings but I was young and would learn the hard way.

She asked if he shared his thoughts and said no because I was so excited about being a homeowner at 21… sure it was to be condemned but I had 10 days to reverse that and did.

That little home no one wanted cost me $11,500 and last year was over 400k but even if it drops 50% I’m still good… only second renter since I moved.

Here, that would be a freak situation. Housing just does not appreciate on that level.

We bought our first house for $20K in 1985. Today, it's shown as having a value of about $61K. It says the rent potential is about $950 per month, which is just about the same as what a mortgage payment would be.

We sold it to a Hispanic homesteading company that provided Hispanic buyers with reasonable financing to purchase, rather than rent, housing. Home ownership increases the value of a neighborhood overall VS rental units, and people that rent get no return if they move VS building equity in a house. That company has done a lot for first time home buyers on that side of town.

Here's a current street view of it. I installed that roof, the fence, and my mom and I planted that Hawthorn tree to the right. There's a Korean Lilac hedge along the alley.

Someone installed new siding, and they've removed most of the 50s shrubbery and added that brick planter around the house. Other than that, not much has changed in appearance or value.

We've been out of there about 25 years now.

 

[MossRoad]

Another example, our current house. Purchased for $65 around 1995. Today shows value of around $130. They just don't go up that much around here.

Other areas near us do increase on a better level, but nothing like what you're seeing out there.

 

[ultrarunner]

Here, that would be a freak situation. Housing just does not appreciate on that level.

We bought our first house for $20K in 1985. Today, it's shown as having a value of about $61K. It says the rent potential is about $950 per month, which is just about the same as what a mortgage payment would be.

We sold it to a Hispanic homesteading company that provided Hispanic buyers with reasonable financing to purchase, rather than rent, housing. Home ownership increases the value of a neighborhood overall VS rental units, and people that rent get no return if they move VS building equity in a house. That company has done a lot for first time home buyers on that side of town.

Here's a current street view of it. I installed that roof, the fence, and my mom and I planted that Hawthorn tree to the right. There's a Korean Lilac hedge along the alley.

Someone installed new siding, and they've removed most of the 50s shrubbery and added that brick planter around the house. Other than that, not much has changed in appearance or value.

We've been out of there about 25 years now.

View attachment 764431

650-700k in Oakland and add a million to make it 1.7m in SF and a little less in San Jose metro…

 

[MossRoad]

650-700k in Oakland and add a million to make it 1.7m in SF and a little less in San Jose metro…

What's the old saying???

Location.
Location.
Location.

 

[ultrarunner]

What's the old saying???

Location.
Location.
Location.

Condition Condition Condition and very bad location... even my drywall sheets stolen... found them in a corner storefront church!

Kitchen before and after!

 

[Snobdds]

No, it does not.
No loans here ever (aside from a very small student loan that was paid off before I was done with school), a couple of credit cards, a store card and a gas card, all paid off every month.
Credit score is over 800 and the credit card that we primarily use keeps bumping the limit up without us asking.

Aaron Z

I'm going to just leave this here.

I'll state this again...if you have no credit amounts owed, no new credit, have no credit mix, the best you can get is 50% of a formulated score. It's mathematically impossible to have a high score when you don't have those areas contributing to the overall.

I love the overly optimistic tone, but I have reservations.

 

[5030]

View attachment 764413


Passed this one this morning. Hard to read, but on the side the logo reads “Hybrid”. Uncle Joe is pushing everyone off gas and diesel.

Hybrid means it has 2 power sources, a conventional engine (probably diesel) as well as batteries.

 

[Snobdds]

I did on mowing & feed hay.
Can’t do it on mulch hay. Buyers dictate prices. Everyone is paid the same.
It’s a regional market thing.

I know you’re a rock star big business guy in Wyoming and elsewhere, but it doesn’t work that way in my little, insignificant part of the world.

You may be the only person I know that is afraid to pass along operating costs. If you want to stay in business, you bet get comfortable with that.

What you should be cautious about is passing along high profit margins.

 

[kenmbz]

We checked the quarterly returns for a few large supermarket chains (ex. Albertsons).
Profit is up big time, so it's not supply/demand keeping up pricing at this point.

 

[5030]

grocery stores have always been profit motivated. The more they make the happier they are.

 

[Snobdds]

We checked the quarterly returns for a few large supermarket chains (ex. Albertsons).
Profit is up big time, so it's not supply/demand keeping up pricing at this point.

Did you actually do the financial statement analysis required to determine that? Operating costs are through the roof right now for nearly every company.

 

[kenmbz]

yes, I used to work on Wall street 10Q etc.

 

[Snobdds]

yes, I used to work on Wall street 10Q etc.

Ok. I just saw a bunch of cash that was going to stores that had bad operating margins close and as a result their free cash flow really increased. Which made profits look really high. Once that capital gets reallocated, it should go back down to the historical trended average.

 

[kenmbz]

I have looked and Albertson's, as in this example, has been opening stores not closing them.
Smaller chains like Wegmans here are reporting good/average returns, but they also did not raise their prices as high as say ACME or GIANT.

 

[MossRoad]

I'm going to just leave this here.

I'll state this again...if you have no credit amounts owed, no new credit, have no credit mix, the best you can get is 50% of a formulated score. It's mathematically impossible to have a high score when you don't have those areas contributing to the overall.

I love the overly optimistic tone, but I have reservations.

I'm glad you posted that. It's from the same company I posted a link from in post #82 that I'll post here again.

Is Having No Debt Bad for My Credit Score?

Getting out of debt is a laudable goal, and it won’t hurt your credit as long as there is some activity on your credit report.

www.experian.com

 

[ultrarunner]

I’m not up to speed as I never had a loan except for First Mortgages… no car, student, consumer ever and not high income… but what have is paid for except for a 2.75 fixed home mortgage with less than 10 years remaining.

I do have a credit card I use for business but not once have I carried over a balance.

There must be something the credit rating companies are missing but I don’t know what?

 

[MossRoad]

I'm going to just leave this here.

I'll state this again...if you have no credit amounts owed, no new credit, have no credit mix, the best you can get is 50% of a formulated score. It's mathematically impossible to have a high score when you don't have those areas contributing to the overall.

I love the overly optimistic tone, but I have reservations.

Also, I have to ask if you even read the article that graphic came from and what those categories mean, and how they use those categories to determine your credit score.

How Is Your Credit Score Determined? - Experian

Credit scores are determined by different categories, with payment history as the most important. Learn more about the factors that affect your score.

www.experian.com

Some highlights, bolded by me.

Payment History​

Your payment history, as it appears in your credit report, is typically the most important category in determining your credit scores. Within this category, the scoring models consider:

• On-time payments: A history of paying your bills on time is good for your credit scores.
• Late payments: Payments made over 30 days late will typically be reported by your lender and hurt your credit scores. How far behind you are on a bill payment, the number of accounts that show late payments and whether you've brought the accounts current are all factors.
• Public records: Filing bankruptcy can significantly hurt your credit scores.

Amounts Owed​

Amounts owed, or your credit usage, comes just after payment history in importance when determining credit scores. In part, this category includes how much you owe on loans and how many of your accounts have balances. The main consideration in this category, however, is your credit utilization ratio.

Your credit utilization ratio, or rate, is determined by comparing the current balances with the credit limits on your revolving accounts, mainly credit cards. To calculate your credit utilization ratio, add up the balances on all your credit card accounts, divide that number by the sum of all your credit card limits, and multiple by 100 to get a percentage. That percentage is your utilization ratio, and generally, lower utilization ratios are better for credit scores.

Credit scoring models look at each revolving account's utilization rate as well as the overall rate across all accounts. In either case, it's best to keep your utilization under 30%. Those with the best credit scores tend to use under 10% of their available credit.

Length of Credit History​

Responsibly managing credit accounts over a long period of time can help your credit scores.

New Credit​

(ME: Pluses and minuses that cancel each other out.)

Types of Credit Accounts​

Credit scoring models may also look for experience managing both revolving and installment credit accounts. Having a mix of accounts can help your scores.

Some credit scores are built for specific types of creditors, such as credit card issuers or auto lenders. Your experience with the correlated types of accounts could be more important for these types of scores.

________________________________________________

Back to me again:

So there you are.
They are looking for people that make their payments on time, are using a small percentage of their available credit, have done so over long periods of time, don't really care about new credit, and don't really care about the types of credit accounts as long as you manage them well.