The House Hunt was a success!

In July I mentioned that we were participating in a house hunt for a friend who is in Afghanistan and wanted a home for when he returns.  He gave us his criteria of price, bedrooms, features, and square footage.   Last week the search concluded, the deal is done, and the papers signed.  We had a blast!

Each week we would scour the new listings along with his wonderful agent Kelli and schedule appointments to do the look see often after doing a preliminary drive by to check it out.  We learned much along the way.  In previous house hunting it had often been what was called a buyers market.  A buyer would find a house they liked and make an offer often lower than the asking price and negotiations would begin with a conclusion usually resulting somewhere in between. 

This was entirely different.  Houses that would come up on Thursday, we would look at them on the weekend and by Monday there would be up to 15 offers on the house!  I had never seen anything like it.  Often in the short time we were scheduled to be at the house there would be someone looking when we got there and someone else waiting to look when we were finished.  There was 4 of us including the potential buyer that had to change our strategy after missing a number of really good houses.  We had entered what is called a sellers market.

Yes, prices are still low, interest is still low, but the available houses was also low.  One would not know it by looking at Realtor.com because the listings shown include: short sales, foreclosures, contingents, pending, and active.  The first 3 types are really not available and they radically increase the houses that appear to be available.  The actives on the list were the only possibility but we had to sift through them all to the real potentials.  The next step was to make sure they met all the buyers criteria which included a large lot and RV parking.  In this area that reduced the choices down to an average of two to four to look at per weekend.  Because the area also had a high foreclosure rate many of these were trashed and had smells that one could not imagine unless experienced with their own noses.  There was more than one home where the front door was opened and we walked away without entering.

Through a process of trial and error we learned that the only way one was going to buy the desired house was to up the offer over the asking price and make it the BEST offer on the table come Monday morning.  In order to insure that this could be done we first had to lower our search criteria price to allow for the buffer.  Our ebay experience helped here and got the adrenaline flowing.

Mind you the potential owner is sitting in Afghanistan during the entire process.  After anyone of the four of us would find a potential home, he would review it, "his team" would go visit it and as a group would decide if he would like it, then we would take pictures and send them to him and give  our recommendations from "okay", "good investment", to the top recommendation which was "BUY IT NOW".  With him giving the approval the offer was in play. 

It was so fun and crazy as we three women "the team" would discuss the pros and cons of the property and all the tidbits of positive or negative comments he had made on prior places so we got better at it and more unified as we went along.  One house that he was very excited about from the pictures and after seeing it we all had a flat "NO" and he stated that there was no way he would go against the word of three women.

After a few good deals were missed due to the competition the realtor found a house and an offer was made sight unseen by any of us.  Two days later the team of ladies went to look at it knowing the offer could be rescinded if it did not meet objectives.  We were more than pleased and the deal continued buy not without the expected multiple offers, renegotiation's, and haggling over the details.  The offer was almost pulled and just when it looked like it wasn't going through there was another turn around and all parties were able to come to an agreement.

The timing was absolutely perfect because the buyer was able to come and see the place in person before final papers were signed and he absolutely LOVED the place.

Making the deal even sweeter the renters who had been taking care of the place so well are staying on until he returns and are very happy that they don't have to relocate yet so they are able to meet their own house hunting goals in the future.

The pictures from Realtor.com have already been deleted but here are a couple to give a feel for the place:

Yes, the carpet is Berber.  It also includes four bedrooms, 3 baths.  Even after all the haggling that was done the price was probably less than half of what it what it would have been five years ago.  For those who have been waiting for a time to buy or refinance the fed also just announced that interest rates are the lowest since the 50s.

Self-Sufficiency on 5 acres

The conversation started about food.  I mentioned that since moving to the city I could tell that the food I was eating was making me feel horrible and I'm putting on weight.  Remember, for years I lived in a rural community and was able to raise some of our own meat supply and had some locally grown produce.  All meals were cooked from scratch with the basics of meat and potatoes.  Now my meals are often fast food or processed food.  It meets the budget and the schedule but I often have cravings for good pot roast with gravy and mashed pototoes.  As we continued with the conversation it came back to my desire to get back to "living off the land".  I had not reached my goals yet but miss so many things about the lifestyle I loved and take each step forward hoping it will lead me back.

In 1988 when I first moved to the rural community I would take walks and everywhere I went people would wave at me.  It was so strange after living in the Seattle area all my life.  Seattle is also a very friendly city but not nearly as outgoing as what I was now experiencing.  I would smile and wave back all the while a little puzzled.  Grocery shopping was also a bit strange.  Whenever I shopped people were stepping aside moving out of my way.  It took me a while to realize it and then of course I wondered why.  After consideration I laughed when I realized that I approached my grocery shopping like a mad woman on busy mission.  Others sensing my hurry would give me room to zip down the isles.  I slowed down after that and started to move with the flow of shopping cart traffic.

Many had moved to the community around the same time I did.  There was a new emphasis on self-sufficiency, homeschooling, and everything country which I didn't know was happening as my move had been made purely for economic necessity.  More on this story in previous posts and the In The Trenches book.

After the food conversation and my recent trip back to the area my mental engine and longing has been revved up.  Everything in the news indicates that that there are very good reasons why one might want to be out of the cities now or in the near future.  Just out of curiosity I checked realtor.com to see what a five acres and a home would run.  Notice that I like most country people list the acres or barns first and the house is a bonus to the deal.  In many rural communities the homes are 100 years old.  Of course they have the new homes and even mansions but they are far from the track homes of America suburbia. 

My search only had 2 criteria:  Over 5 acres and under $150,000.  The reason 5 acres was chosen is that this is the typical amount needed to be self-sufficient in being zoned for and raising ones own food including beef.  Some get by with less if they raise pigs but as I am not a pork eater for many reasons this is not a consideration for me.  I have raised beef for meat and dairy, goats, sheep, and poultry.  Horses were also on the top of my dream life list so pasture was an important priority.

I choose $150,000 because although there may be places much less expensive they typically may need much more sweat equity even to basic systems which may be more than most would want to take on.  My own place was $43,000 years ago but that was my no running water story.  Most would not consider it.  By now some of you may have visions of the homestead act and be familiar with the phrase "40 acres and a mule" solution of yesteryear and that is exactly the idea but geared toward modern know how. Most of us would be dumbfounded at the idea of hitching up a plow to begin a self sufficiency lifestyle though I for one would definately apply if the opportunity came up in certain parts of the country.

A couple things about my quick search that should be mentioned:
I have not seen or inspected any of the properties so cannot warrant their condition in any way.
Personally I would not buy a manufactured home since it is a depreciating asset but they are very popular because many are more concerned about newer than long term appreciation.  Financing is also very different.

Prices can vary much up or down depending on location in the country and all the features
Typically months have been involved in any property search I have been part of to compare prices, features, and benefits of the specific piece and the area.

I say all that only to say that I did this for fun and information not to present my best pick for an area.  Readers of this blog live all across the country and even the world and are in different financial situations so no one piece of property would be relevant to all.  You can use the realtor.com link to play around with this yourself.

One thing right off the bat I need to say about almost all rural property.  It does not have city water or sewer.  To some that might be obvious but to me it was a complete shock.  Wells and septic systems are the norm here and the first thing to learn about.  It's fun to study the incubation of chickens but quite another to spend thousands of dollars to replace a well or septic that does not function properly.  It is especially a headache if one has never heard of such a thing.

So just for a time of playing around on the internet here are a couple of starting points.  Be sure and click them to look at the land.  An acre is quite different than a back yard.  All rural properties are completely individual.
Property Listings:

Lewis County WA

Lodi, CA

Carbondale, IL


Another thing to consider about moving to a rural area is income.  Many do not have any sources.  They are going through an economic downturn just like the cities.  Most people CANNOT make a living off of a farm of small size despite ideas, books, and dreams to the contrary.  So would might have the easiest transition to a rural life?

• Those willing to commute to employment.  This could be up to 1 - 2 hours depending on location.
• Those whose business is independent of a job such as computer based options.
• Those with retirement or disability income but still able to do manual labor to some degree. 
• Those with equity in a current home of investment that would allow a cash purchase of property leaving only minimal monthly expenses.
• Truck drivers
• Athletes or other traveling professions that just need a home base for their families
• Investors wanting to buy land now and build a home later.
• Flat broke and willing to live off the land in more primitive conditions.
• RV dwellers who get land with power, water, and septic while they travel at will.
• Those who have a good paying job but want their family home outside the city.  I have a friend whose husband had a high paying job in the city and maintained a very minimal apartment for the work week and came home to the family each weekend.
• Those with skills that would be used in a very small town like teachers, bankers, some medical professionals, and grocery store workers.   I have seen many small businesses fail over the years not because they were not good but because the town did not have the population or disposable income to support it.

In summary I guess it would be accurate to say that it would NOT work for the AVERAGE person.  Though there is nothing wrong with being average most are very dependant on the regular paycheck which is not always available in small towns.  At one job I applied for the owner responded "No, no one has died lately" of course meaning that was the only way they had job openings.

If one is looking for cheap housing but doesn't want the fuss of a small farm small rural communities also provide a home that might fit the bill.  Use the website to find some in your desired area.

Book and Blog links you may enjoy:

Simply Self Sufficiency

5 Acres & A Dream

Books on Self-Sufficiency on Amazon.  If you see a title that interests you check your local library for availability.

Michael Orbino - A Rising Star

Like other mothers I cannot help but share my kid's accomplishments so when he made the front cover of a magazine I could not help but pass it along.  Being the computer illerate that I am I could not figure out how to reprint the article.  For direct access connect to the link at WA Realtor.  The article is on page 14 if it does not take you directly there.

 Summary:

Short Sale Soapbox

It has been a while since I have been on my soapbox but a recent conversation revealed a dark side that I was unaware of.  I will do my best to recount the gist and welcome any corrections others might provide regarding my facts.

I have often spoke of the underhanded and in my opinion diabolical plan against the American public regarding the bubble created in the housing market.  professional financial experts created mortgage products that were promoted to the population which enticed and allowed people to obtain loans far and above their ability to pay and with terms that almost certainly would result in a high level of defaults.  Short term gains were put above long term economic prudence and many trusting and unsuspecting people lost their jobs, homes, retirement funds,and confidence in both the financial systems and politicians for good reason.  The perpetrators of this pillage of the American people have now moved on to foreign investors to work the same plan.  (Just in case you were unclear of my opinion).

Throughout this blog I have attempted to try and expose this only to find out that the underdog in the story is often just as guilty of the greed and lack of righteous behaviour as the financial industries. 

 When I first heard of the short sale my understanding was that the person who had obtained a mortgage and later found that the value of the home had dropped far below the loan amount who petition the bank to reassess the value and allow the home to be resold for that amount.  This would enable the borrower to sell for a lower amount than what they negotiated the loan for.  This made sense to me because having worked in banking most funds are all on paper and not real money and at times adjustments need to be made for accuracy.  Simple example:  I get an appraisal on a ring that says it is worth $1,000,  You agree to make payments to me for that amount over a period of months.  You later find the ring is really only worth $500.  You come back to me and say that you want it adjusted to the real value of $500 or you are going to give me back the ring.  I all along knew or should have known what the real value was so I know choose the new repayment amount or decide to take back the ring and resell it to someone else. That is really all that happened in the housing market yet on a vastly larger scale. This was the basic concept of the short sale and was designed to bring things into balance in a way that should be fair to both parties.

Wikipedia defines a short sale in the following manner:
"A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property and the property owner cannot afford to repay the liens' full amounts, whereby the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt.^[1] Any unpaid balance owed to the creditors is known as a deficiency.^[2][3] Short sale agreements do not necessarily release borrowers from their obligations to repay any deficiencies of the loans, unless specifically agreed to between the parties.
A short sale is often used as an alternative to foreclosure because it mitigates additional fees and costs to both the creditor and borrower. While credit is also typically damaged much less than from a foreclosure, both often result in a negative credit report against the property owner.


Most creditors require the borrower to prove they have an economic or financial hardship preventing them from being able to pay the deficiency.^[4]
Creditors holding liens against real estate can include primary mortgages, junior lien holders—such as second mortgages, home equity lines of credit (HELOC) lenders, home owners association HOA (special assessment liens)—all of whom will need to approve individual applications for a short sale, should they be asked to take less than what is owed."

In our housing search for a friend I had the opportunity to ask all my questions of a very knowledgeable informed agent.  In our search in realtor.com a search reveals that almost 90% of the houses listed show a status of "contingent",  which indicates that a transaction is at some stage of being processed and is waiting for inspections, financing, title clarifications, etc.  Another site we visit further breaks down those that are "Active"  by showing those which are "Short Sales".

When I asked for further information on this category I was told that it is not even worth bothering with these.  Homeowners have applied for short sales and the homes were locked in a holding pattern awaiting foreclosure and it may take years for them to be available.

My puzzled look must have appeared for she explained that many homeowners have applied for this status and a requirement is that they list the home with an agent to qualify.  Then, they proceed to quit making payments, refuse to allow showings, and continue to live in the house for free until they are legally removed from it.  This may take from six months to six years. Often they quit maintaining the home and go even further and trash it.  When the day finally comes that they must leave they leave whatever they want behind including garbage, damage, and sometimes stripping appliances, fixtures, cabinets, and other vandalism.  My stomach turns as I think of this behavior for I actually have known people that have done such things but didn't realize that this was a common practice. 

Two Wrongs don't make a Right.

Remember our mothers telling us this during the battle with our brothers and sisters? Apparently the actions of countless numbers of those who have gotten short sales is the equivalent.  Yes, I find and have spoken about the actions of the financial industry as being deplorable.  Because of this many have lost much and I grieve with them and hope that this blog and other tools will assist in making the decisions that are needed to keep going.  There is a time where one must walk away but it is important that we maintain the dignity of our actions or else we are no better than those who have wronged us whether it be an industry or an individual.  This is indeed difficult but again as our mother's used to teach us:

Cheaters never prosper.

Our actions will find us out now or in the future for we will reap what we sow.

Other related posts:
Keep your Integrity
Animal Farm 2011 Version

The PEARL in the COWPIE

Who would imagine that the disposal of garbage could cost so much?  Recently the people living in my turn of the century (that's 1885) house vacated and clean-up of the property began.  It's a long story... 

I was warned in advance that garbage was going to be a major issue so I had mentally prepared myself for the worst.  Having been a property manager and having worked in a real estate office I knew what the worst could look like.  Few can bear the sights, smells, and touch of a clean up project so I long since have learned that not everyone is cut out for it.  Somehow, for me, under all the abuse a grand old house may exist so I am able to put on my sensual blinders and go for it.

I cannot help but mention that I had prayed much before hand and read the book of Nehemiah to prepare for the project. I was extremely grateful that some people I had never even met felt bad about the situation and gone before me to get the work started. When I got to my home friends from this town I love came to my aid and provided a place for me to stay during the work, food to eat, and a vehicle to drive.  That all in addition to people who joined in the work, loaned lawn mowers, a tractor, and brought lunch to those who were working.  While we worked on this most miserable of projects we moaned, talked, laughed, planned and I for one had a wonderful time.  I was reminded again of why I love small towns and especially this one which has provided a home to generations of my family for over 150 years based on the markers I find at the cemetery.

Most of the time I try to keep my blog posts anonomous but a special thanks must be given to Mike, Nikki, Tamrick, Jimmy, Richie, Tammy, Danny, Keren, and others who participated and continue to be there in various ways.  I love you guys!

So how bad was it?

Two of these 20 yard dumpsters were taken out -

And, it will be about eight of these 4 yard dumpsters -

The cost of all that garbage removal looks like it will come in at about $2,000.  And that doesn't count the burn pile that was going for days or all the scrape metal and tires that were hauled off.

In the process two people puked, we went through almost a box of gloves, and oh my aching back.  But we kept the coffee going and rapid progress was being made.  Underneath it all was the wonderful surprise that there was very little damage except to the carpet and a couple of broken windows.

This old lady of a house is getting a new coat of  paint and a manicure to the outside lawns and trees.  And again she will provide a home just as she has for over 115 years.

One of my best friends Cleo used to say "Look for the pearl in the cowpie"  (for those who don't know what a cowpie is another translation is cow manure). 

My friends and family are the PEARL of all that is in my life.  It was wonderful to see everyone and God bless.

Residential Real Estate Inventing - Part 3

This home was purchased with the idea that it was going to be our first flip.  The home had originally been used as a small home church so the living room was exceptionally large with beautiful hardwood floors.  When the owner moved she took what she wanted and left the rest.  The inside was filled with stuff accumulated for years.  There was no telling what was underneath but also no indication that the owner had abused the home in any way.

From the time the offer had been made on the home the market was showing noticeable signs of slowing.  We decided that we would benefit from having a renter in the home in case it took longer than expected to sell.  It turned out to be an excellent decision as the home was not sold for almost two years.  

Residential Real Estate Investing - Part 2

My top keys for successful real estate investment in 2011.

1. Learn all you can.  The library is the best source for this information.  Yes, the Internet has good information but much of that is geared toward making money for the one providing the information and they often just tell you the good parts.  The time and money involved in real estate investment is enough to warrant extensive investigation and research.  In one year the value increase can be as much as any job so corresponding time should be allocated.
2. Pick houses you would be comfortable living in.  If you don't like the neighborhood, the schools in the area, or think the house is too dumpy than pass on it.  You want to attract quality tenants and in the future a good sale price so if you would not be willing to live in the place yourself many other people also would not.

Residential Real Estate Investing - Part 1

If you have thought about real estate investing now may be the time to do your home work and be ready.  Prices have continued to drop and interest rates are low.  We are just about to the bottom (hopefully) as the second dip hits (yes, it was coming).  There is an old axiom "Buy Low, Sell High".  If that is your goal then this is your time.

Rich Dad Poor Dad - Free Seminar Review

This week I had the opportunity to attend a two-hour free seminar sponsored by Rich Dad Poor Dad. I love financial seminars. It’s probably crazy but seminars have always been my #1 choice for learning something new. Books can get long and even the best books can be set aside in a busy schedule, classes require a big commitment, and infomercials seem contrived. Seminars can provide information, interaction with others with similar interests, and are usually just long enough to fill your brain without shifting it to autopilot or sleep mode. This two-hour seminar was no exception. The speakers gave just enough taste to spark the thoughts and the free gifts had people jumping out of their seats to get them.

Michael Orbino makes the Wall Street Journal

good-schools-bad-real-estate: Personal Finance News from Yahoo! Finance

Well you know that I try to share some housing articles and this one is especially fun as it is posted in the Wall Street Journal and Yahoo news.

And, it's my son who was interviewed for the article! Toward the middle of the page. Michael Orbino.

Am I happy for him? Yessiree.

Book Review - The Ultimate Depression Survival Guide by Martin D. Weiss

There is more that I don't know about the stock market and common forms of investments than I do know so it is not a subject that I plan to write much about on this blog.  I prefer my investments to be something I can feel, see, and touch such as small business, real estate, or metals.  And, I certainly would not turn over all my money to someone else to manage.  If someone were to lose my hard earned money it would be me.  However there are those out there who are experts in investing and I would certainly put Martin D Weiss in this catagory.  Between he and his father there are almost eighty years of professional and personal experience through the the first and second great depressions and everywhere in between.  Martin D Wiess has spoken before congressional leaders and provided answers to their own questions about the where and hows of the current economic crisis.

This book and the cd may be more detailed than many In The Trenches readers may want to pursue but for those who do it will be a tremendous learning experience.  By understanding the basic concepts he presents it will help you to have a much greater knowledge of the big picture of what's going on so that you can make sound decisions about what you should do in your current situations.  I think this is especially true if you are nearing retirement and have lost your first investments.  Don't be convinced that the crisis was just a fluke and it will all get better.  This book does not promise miracles but it does outline a basic strategy that can help you be years ahead of the pack in the recovery process.

I believe that the information in this book is important enough that I may write more in the future or do a series on it. And, I hope and plan to implement some of the strategies myself.  In the meantime, I recommend that you get the book or cd's at the library and familiarize yourself at your earliest convenience.  There is a lot to chew on in these ideas. 

The author has written a number of other books as well as his website.  Would love to hear any comments you have on any of them.  To some, his writings may even seem somewhat controversial.  Being right often is.

Money and Markets Website:  http://www.moneyandmarkets.com/

Amazon book link  :http://www.amazon.com/Ultimate-Depression-Survival-Guide-Protect/dp/0470393777/ref=sr_1_1?ie=UTF8&s=books&qid=1273448094&sr=8-1-spell

Real Estate Investment - Land

 When most people think about real estate investing they think of residential real estate, vacation property, or, if they want to make a business out of it rentals in single family residences or multiple unit complexes. These can all be very good investments if you research and plan carefully. All of them to some degree or another require money, time, and work.

On of the least discussed real estate investments is land. Just land. Generally land would be a long-term investment and therefore a possible option for retirement savings and investment. The value of land generally would not go up and down as radically with the market conditions, as would residential property. In addition, taxes would be much lower.

They call it a bubble.

If you have been following this blog or read the older listings on June 3 I wrote about what I thought was the next steps in the American economy. Sounds like the professionals are starting to agree as evidenced in the linked story.

http://finance.yahoo.com/tech-ticker/article/325783/Ten-Bubbles-in-the-Making?tickers=^gspc,^dji,xlf

The story is more scholastic than what I normally like to read and much to complicated for me but the point is: once the gov't boost to the economy runs out if we have not taken personal responsibility to prepare ourselves for the next wave we could be in another wave of the storm. I sound like such a radical but I do believe these are radical times.

Is this a gloom and doom message? No, not at all. It is a move to higher ground message. Gather what is important like family, friends, and values, and be prepared to shore up or let go of what can be replaced.

Save money, don't spend irresponsibly, and cut expenses where you can before you are forced to give up things you need. Basically, get In The Trenches and don't expect the gov't to do it all for us. They are doing what they can with the new credit card laws, home mortgage modifications, and extention of unemployment benefits. They can't do it all and we will be disappointed and angry if we expect them to. Many already are and are marching the streets.

We are not victims, we are participants and we need to participate in the recovery just like we participated in spending spree. It's our homes, our neighborhoods, and our country. Anything we can do to prepare ourselves, our families, and our community is a good thing. If our neighbor is out of food we will need to help feed them one way or another so let's get to higher ground and help our neighbor to get there also.

A word to renters

Landlords like everybody else have taken it in the shorts in this economic crisis. Why? Because it is the housing industry that is at the heart of the problem, specifically the banking practices that effect the housing industry. The landlord is a person who not only has one property but because it is his business probably has multiple properties. Compounded by that, they have also been affected by all the residents that live in the properties they own. Layoffs, garnishments, and weather expenses all bundle up and the landlord has to manage the reduced income with the increased expenses of the business.

Sometimes they get behind on the mortgage payments. If this has occurred the property may be going into foreclosure. This is not a good situation for anybody, however, as renters the government has put some protections and help in place for you!

The attached article indicates that you will be allowed to continue living in your residence all through the forclosure process and then 90 DAYS AFTER THE FORECLOSURE or until your lease has expired as long as you continue to pay your rent.

Take a copy of this article and then go talk to a lawyer to find out actually what your rights are.

http://money.cnn.com/2010/02/18/real_estate/keep_kicking_out_tenants/index.htm?icid=main|hp-desktop|dl3|link6|http%3A%2F%2Fmoney.cnn.com%2F2010%2F02%2F18%2Freal_estate%2Fkeep_kicking_out_tenants%2Findex.htm

It is not the intent of this article to give legal advice. I am not qualified to do so, however, I can point you in the direction of those who can help.