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Cklein

New member
I am pretty made up my mind to buy a Mendocino house. This is the last try for you guys to talk me out of it.

1. I live in "The Village" apartment. Whoever lived there will love it. I love it even more. I can walk to work, Starbucks downstairs, and GYM is inside the building too. Bright, beautifully landscaped. Walk to Spectrum Shopping center and Theatre.  Moving to a "Mendocino HOUSE" seems a downgrade to my lifestyle.

2. I feel the "URGE" of owning my own place. Let my money work! Living in a house is like your money generates 2% TAX free interest! And this 2% is pretty much guaranteed.

I am single, my RENT is $1700, and a Mendocino house plan 2 will cost $900K to really complete the transaction include landscaping.

I guess the reason I am struggling is: I am really afraid that Irvine Housing will jump into another boom in next 5 years. Maybe double the price again in 10 years? It's kindof scary based on the speed of FED's money printing.

Even with the recent financial crisis, most houses in Irvine doubled their price between 2002 and 2012. Check out the data yourself! Turtle Ridge almost doubled its price between 2004 - 2012!

What will you do if you are in my shoes?
 
Not sure if it will be a BOOM in the next 5 years... although it's very hard to accurately guess housing because of the non-fundamental factors involved (yeah... that's right... I cited NON-fundamentals).

Like most will tell you, don't buy just because you are thinking of the money payout... buy because you need the space, it's a nice place to live, it's affordable, etc etc.

I remember when I was fresh out of college, my short-term goal was to buy (or as the old IHB snarkers like to say, "bank debt") myself a home and not rent. It was one of the best decisions I made (but unlike some, I was set in this area, was going to settle down so there were less question marks). I see nothing wrong with buying if you can make it work financially... at the same time... renting might be a better choice for those with different circumstances.

My only requirement, is make sure what you're buying you can live with for the next 5/10/15/forever years.
 
Sounds like you are more than happy with your current living situation (location, amenities etc.)  and that you are making this decision to buy a financial one.  You don't want to miss any potential upside in the RE market and you want your monthly outlay for living to "work for you."  However, I personally wouldn't be looking at buying a new 900K home if I'm trying to maximize my returns.  Maybe you can consider renting out rooms etc, but I would be more inclined to buy a smaller place for myself and another small place for investment.  My two cents.
 
I admire your goal of buying a place but I question your desire to buy a property the size of Mendocino as a single individual.  It seems like a lot to take on just to blunt the possibility of the OC market going up. 

Obviously this is a good time to buy with the interest rates being so low but even with 20% down, a 900K house will be about $3300 in monthly payments  plus another $1000 or so in property taxes.  In total, you're looking at about $5K in payments.  You stated that you pay about $1700 in rent right now, you would increase your payments by about $3K plus the use of the 20% you are putting down.

If you are worried about investment issues, I think you're better off buying a rental property, hiring a managing agency, and collect rental income.

 
You got my situation right.

But I am very skeptical to be a landlord. I have never been one, and I always feel it must be horrible to be a landlord.

Buying a $900K home will increase my cost $3K a month, that's not a big problem if I can enjoy the new home. But I enjoy my apartment more, that's my delima.

Who has ever owned a rental property? Any terrible stories? Is it pratical for me just to leave it to the agency, and they will take care of the repairment, rent collection .... everything, so I just collect the money? If that works, I will be happy with 2% return.


lovinLife said:
Sounds like you are more than happy with your current living situation (location, amenities etc.)  and that you are making this decision to buy a financial one.  You don't want to miss any potential upside in the RE market and you want your monthly outlay for living to "work for you."  However, I personally wouldn't be looking at buying a new 900K home if I'm trying to maximize my returns.  Maybe you can consider renting out rooms etc, but I would be more inclined to buy a smaller place for myself and another small place for investment.  My two cents.
Click to expand...
 
Cklein said:
You got my situation right.

But I am very skeptical to be a landlord. I have never been one, and I always feel it must be horrible to be a landlord.

Buying a $900K home will increase my cost $3K a month, that's not a big problem if I can enjoy the new home. But I enjoy my apartment more, that's my delima.

Who has ever owned a rental property? Any terrible stories? Is it pratical for me just to leave it to the agency, and they will take care of the repairment, rent collection .... everything, so I just collect the money? If that works, I will be happy with 2% return.


lovinLife said:
Sounds like you are more than happy with your current living situation (location, amenities etc.)  and that you are making this decision to buy a financial one.  You don't want to miss any potential upside in the RE market and you want your monthly outlay for living to "work for you."  However, I personally wouldn't be looking at buying a new 900K home if I'm trying to maximize my returns.  Maybe you can consider renting out rooms etc, but I would be more inclined to buy a smaller place for myself and another small place for investment.  My two cents.
Click to expand...
Click to expand...

You can just hire a management company for all that stuff...they usually charge a flat percentage fee.  You will have to pay for upkeep but you can get insurance for the big stuff.

Owning a house sounds really nice but there is a ton of upkeep and issues you have to deal with even with a new home. 
 
Real estate investment is a big topic. The best way to get started in your situation is to purchase a multi-unit property, live in one and rent out the rest. There are several benefits doing so:

1. Owner-occupied financing
2. Diversified risk against vacancy
3. Better cash flow

I currently manage two properties owned by my family (one large house and one townhouse) in San Diego. I haven't had any problems with the tenants even without hiring a professional property manager. The key is not to get too greedy. By setting a slightly below-market rent, You will have a lot more freedom to pick and choose who you want to rent to based on credit and reference.

The above mentioned approach is very hard to achieve in Southern Cal, mainly due to the low inventory and large number of sophisticated investors. In addition, multi-unit properties tend to be older and don't come with all the amenities. If you really enjoy the lux lifestyle, then keep on renting at the same place and invest you money somewhere else (Apple Valley, Florida, Phoenix, etc.)

Being a fellow FOB Chinese, I understand your pride of home ownership. Having a lush property so that you can entertain family and friends is priceless. If that's your desire, buying a Mendocino Plan 2 is not a bad idea at all.
 
If you want to be a landlord, buying brand new SFRs in Irvine is the worst return on money. I would buy a couple of 3 BR condos outside of Irvine from investment point of view.

If you like to buy a brand new/newer SFR to live and enjoy in Irvine, then I would suggest buying in one of the top neighborhoods such as Turtle Ridge, Quail Hill and Northwood Pointe. If you insist on brand new, or cannot afford these top neighborhoods, I would suggest Willow Bend if the price is right as the value will hold better for no other reason than University High. The location is also quite convenient as it is close to 405 and has a shopping center nearby.

It is very likely WL would price Willow Bend "too low" initially and all the Chinese/Asian FCBs who insist new homes with the best schools would bid up the price. You may want to get onto the interest list early so you have priority on the first couple phases. It is worth waiting for Willow Bend as Mendocino is nothing special to jump on early.

 
If you want return on investment you should buy Chinese stocks.

z

 
Cklein said:
I am pretty made up my mind to buy a Mendocino house. This is the last try for you guys to talk me out of it.

1. I live in "The Village" apartment. Whoever lived there will love it. I love it even more. I can walk to work, Starbucks downstairs, and GYM is inside the building too. Bright, beautifully landscaped. Walk to Spectrum Shopping center and Theatre.  Moving to a "Mendocino HOUSE" seems a downgrade to my lifestyle.

2. I feel the "URGE" of owning my own place. Let my money work! Living in a house is like your money generates 2% TAX free interest! And this 2% is pretty much guaranteed.

I am single, my RENT is $1700, and a Mendocino house plan 2 will cost $900K to really complete the transaction include landscaping.

I guess the reason I am struggling is: I am really afraid that Irvine Housing will jump into another boom in next 5 years. Maybe double the price again in 10 years? It's kindof scary based on the speed of FED's money printing.

Even with the recent financial crisis, most houses in Irvine doubled their price between 2002 and 2012. Check out the data yourself! Turtle Ridge almost doubled its price between 2004 - 2012!

What will you do if you are in my shoes?
Click to expand...

Well, haven't you heard?  It's a great time to buy a house.  Interest rates are at an all time low so the banks are practically giving money away.  With the Mendocino plan, we sell out every week.  Our homes are built with quality unlike those other builders who I cannot mention.  Come in a look at our miniature of the community.  Doesn't those little "SELL" buttons on the little houses compel you to buy?  All we need is a modest down payment and we will set you up with our Design Center.

It's like you are getting an Interior Designer for free.  Come and take a look at the models and you will see that you can put a ping pong table in your garage.  Make sure you pre-qualify with our preferred lender first.

You can do the paperwork directly in our office.  Buy direct.  No need for a real estate agent.  It saves us from paying the co-op and we don't share that with you.  Your home will be done in six months and we will call you back many times to sign a piece of paper but you can look at our models when you come in.
 
test said:
If you want return on investment you should buy Chinese stocks.

z
Click to expand...
Test, that's the Hong Kong stock market chart....the Chinese stock market chart looks as ugly as this one looks pretty.
 
jilala said:
Real estate investment is a big topic. The best way to get started in your situation is to purchase a multi-unit property, live in one and rent out the rest. There are several benefits doing so:

1. Owner-occupied financing
2. Diversified risk against vacancy
3. Better cash flow

I currently manage two properties owned by my family (one large house and one townhouse) in San Diego. I haven't had any problems with the tenants even without hiring a professional property manager. The key is not to get too greedy. By setting a slightly below-market rent, You will have a lot more freedom to pick and choose who you want to rent to based on credit and reference.

The above mentioned approach is very hard to achieve in Southern Cal, mainly due to the low inventory and large number of sophisticated investors. In addition, multi-unit properties tend to be older and don't come with all the amenities. If you really enjoy the lux lifestyle, then keep on renting at the same place and invest you money somewhere else (Apple Valley, Florida, Phoenix, etc.)

Being a fellow FOB Chinese, I understand your pride of home ownership. Having a lush property so that you can entertain family and friends is priceless. If that's your desire, buying a Mendocino Plan 2 is not a bad idea at all.
Click to expand...
Very well said.  I'm also a landlord and can tell you that a good tenant is worth their weight in gold.  Having a good tenant can make being a landlord painless.  If you don't want to actively manage the property, you can hire a property management firm to do the dirty work for you (at a price, of course).  A home is is a hard asset (real estate) that is both a commodity and an investment (can be a good way to diversify your investment portfolio).  There is intangible value that many buyers find in owning their own home (me included) beyond the fundamental/tangible value.  I'm not sure if Irvine home prices will double in 10 years, but real estate can be a good inflation hedge. 
 
Before you buy a house, seriously consider the amount of time and expense that goes into maintaining the property, also.

Even if you buy new, you will have to spend time gardening and cleaning.  Or you can reduce (but not eliminate) the time you need to spend doing that by hiring people, but that is more expense and management.

Is this how you want to spend your weekend?
 
USCTrojanCPA said:
test said:
If you want return on investment you should buy Chinese stocks.

z
Click to expand...
Test, that's the Hong Kong stock market chart....the Chinese stock market chart looks as ugly as this one looks pretty.
Click to expand...

Hong Kong is part of China.  Besides, many Chinese stocks are listed on there.

z

 
snut100 said:
Cklein said:
I am pretty made up my mind to buy a Mendocino house. This is the last try for you guys to talk me out of it.

1. I live in "The Village" apartment. Whoever lived there will love it. I love it even more. I can walk to work, Starbucks downstairs, and GYM is inside the building too. Bright, beautifully landscaped. Walk to Spectrum Shopping center and Theatre.  Moving to a "Mendocino HOUSE" seems a downgrade to my lifestyle.

2. I feel the "URGE" of owning my own place. Let my money work! Living in a house is like your money generates 2% TAX free interest! And this 2% is pretty much guaranteed.

I am single, my RENT is $1700, and a Mendocino house plan 2 will cost $900K to really complete the transaction include landscaping.

I guess the reason I am struggling is: I am really afraid that Irvine Housing will jump into another boom in next 5 years. Maybe double the price again in 10 years? It's kindof scary based on the speed of FED's money printing.

Even with the recent financial crisis, most houses in Irvine doubled their price between 2002 and 2012. Check out the data yourself! Turtle Ridge almost doubled its price between 2004 - 2012!

What will you do if you are in my shoes?
Click to expand...

Well, haven't you heard?  It's a great time to buy a house.  Interest rates are at an all time low so the banks are practically giving money away.  With the Mendocino plan, we sell out every week.  Our homes are built with quality unlike those other builders who I cannot mention.  Come in a look at our miniature of the community.  Doesn't those little "SELL" buttons on the little houses compel you to buy?  All we need is a modest down payment and we will set you up with our Design Center.

It's like you are getting an Interior Designer for free.  Come and take a look at the models and you will see that you can put a ping pong table in your garage.  Make sure you pre-qualify with our preferred lender first.

You can do the paperwork directly in our office.  Buy direct.  No need for a real estate agent.  It saves us from paying the co-op and we don't share that with you.  Your home will be done in six months and we will call you back many times to sign a piece of paper but you can look at our models when you come in.
Click to expand...

You can fit a ping pong table in the garage?  Wow!  That settles it.  You should definitely buy here.
 
test said:
USCTrojanCPA said:
test said:
If you want return on investment you should buy Chinese stocks.

z
Click to expand...
Test, that's the Hong Kong stock market chart....the Chinese stock market chart looks as ugly as this one looks pretty.
Click to expand...

Hong Kong is part of China.  Besides, many Chinese stocks are listed on there.

z
Click to expand...
I guess in my mind Hong Kong is different from China (kinda like how Irvine is different from most neighboring cities in Orange County).  The Chinese stock market has been stuck with many accounting fraud scandels over the past few years so there isn't much trust in that market.  The Hang Seng trades more in-line with the US stock market than any other Asian stock market (very thinly traded compared to the US market). 
 
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