Saturday, April 23, 2022

Economy - Good News or Bad?

This post was originally from 2008. We had just bought our first house to renovate. I was beyond pissed when Tim decided he wanted this one too. He pushed hard. He wanted it. Our agreement was that we would fix up a place, and then use the money to buy our next place, get that on line, and on and on. Yet there was Tim, pushing and pushing. 

The day that we were to sign the final papers, I had just discovered I had cancer. I was sick about it. Whatever were we going to do? Tim was laid off for the first time. We did not realize that this was the first layoff in a long string of layoffs, due to the NAFTA agreement. Good paying machinist jobs left the country as companies could now get the work done for cheaper using foreign labor. 

As it turned out, this house saved our bacon. It was already divided into three apartments, one efficiency and two regular apartments. It was in good shape (as opposed to the first house we bought, which took two years to get up and running). We got a call from a woman who wanted to rent the evening that very first evening we had it. He went down to see what would be involved in getting it ready for her to take. As he was unlocking the door, he heard a cheerful, "Hey, Tim. I didn't know you lived here." It was someone he'd gone to school with years back. Tim explained that this was a rental. The man said that HE was looking for a rental. He came in and looked and took the upstairs apartment on the spot. It was an unbelievable happening. The rents from those tenants paid for the repairs to the other house and generated an income during a pretty grim time. 

Anyways, the post from 2008:

You know, all this talk about the economy, and the trouble that the banks are having. Really, they've brought it on themselves. Now that they've gotten themselves into this mess, we're going to have to save them. That provokes me to no end. Our bank called us a couple days ago to see if we wanted more credit. No, we told them. Isn't that what got us all into this pickle? Too much credit? But I'm starting to rant.

This is our latest acquistion. It's old.Big.

It has three very cool bathrooms. Ignore the green stickers. That just indicates that the place has been winterized, so that water will not freeze in the pipes and explode if the place stood empty and unheated over the winter.

The place has all sorts of built in cupboards and cubbies, and neat things, as old historic homes are wont to have. We even found a secret compartment behind the fireplace.

It was empty. No treasure.

Damn.

Unlike most repos, someone loved this house a lot. It is very well cared for, but dated. It needs new appliances, and it needs some updating, new wallpaper, kitchen countertops, etc, but all in all, this is a beautiful home, and is two separate rental units. Each apartment has one bedroom and an office/den, as well as the bathrooms, kitchen, living room, and dining room, so they are spacious units.
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Tim thinks that the fact that you can buy homes like this for $20,000 is just excellent. I think that the fact that you can buy homes like this for $20,000 is kind of scary.

19 comments:

  1. That place is just gorgeous. I love old homes. Many Congrats. I'm sure that whoever the place belonged would appreciate knowing that the owners it has now will take as good a care of it as they did.

    The tragic story of the mortgage melt-down is personal. Two of my brothers lost their homes last year (in part) because the mortgage companies set them up with high interest loans, huge payments, and grossly over-valued their homes (this meant that even with good credit, when they needed to refinance for lower payments, no one else would touch them with a ten foot pole). One brother should have known better, the other was a twenty-three year old kid. The first was four years into home ownership when he went belly up. The second was just over a year when his factory job went (literally) south.

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  2. I basically got a double-major in college in International Business and Economics, then went on to get an MBA with much more econ training. So I've been following the news with much interest.

    Yet your succinct points summarize the current "crisis" better than most expert articles.

    And you and Tim will take the opportunity and turn it into something positive, because you're in a position to do so. Because you've been smart with your resources to this point. I like that in free markets that gets rewarded.

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  3. Deb, I'm with you. Greedy money lenders created the problem that the rest of us are going to have to pay them out of. Where's the responsbility that should be attached to those brilliant folks who created the problem in the first place?

    Hey, 'nuff 'bout that. I love this house, too! Have fun fixing it the way you'd envision it.

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  4. $20,000 OMG! i hear you AND Tim...

    and no treasure in the secret compartment... darn it!!!!!

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  5. Did you say 20,000? I mean, DID YOU SAY $20,000? (Lavinia shouting and eyes bugging out....).

    Pardon me while I pick my jaw up off the floor!

    Unbelievable!!!!!!!!!!!!!!!!!!!!!

    I would have snapped it up too. That is a fantastic deal. THis is a very nice house. You'll be in very good shape once the market picks up again.

    Congratulations!

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  6. That is a way cool house. You've done a really nice job fixing it up.

    Mic says that right now it's a great time to invest in family rental real estate. He said that with mortgages tightening up and reposessions, people will be needing to rent.

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  7. I think it looks gorgeous. Gotta agree though, I think we're all in trouble because of too much lending/credit. That sure is a nice place for $20K!!

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  8. What a gorgeous house - but yes, there is a sour feeling that it is so cheap yet was so loved.

    We live in interesting times - thankfully there are people like you and Tim who are able to cough up the 20G and give a home to some people.

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  9. $20k!!!! You can't buy a shed for that over here! I own a basic three bedroom semi-detached house with garage and it cost me around $700k. I am sooooooo envious!

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  10. THere hasn't been a house in Toronto selling for 20K in over thirty years!!!

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  11. find us one in Arizona and we are coming $20,000 jeez we could sell this place at a loss in the uk and retire.

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  12. I think you're both right. We've never had anything like those kind of house prices, except back in the '70's when most houses cost that much, or little.

    It was a beautiful house and the rental units make so much sense.

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    1. Those days are gone. We bought our last house a couple years ago. The value of that house went from $65,000 to $107,000 in less than two years.

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  13. Really cool interior. The bannister landing confuses my brain a bit. I guess I was looking for more bedrooms on that landing. Maybe it matches something on the other side of the wall? You could put a pipe organ or a church choir pew on that landing. Linda in Kansas

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    1. That landing: about 5 feet back, there was a door which led into an efficiency apartment. At the top of the stairs there was another apartment, a one bedroom. The first floor was one large apartment with two bedrooms.

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  14. The property looks very nice with excellent street appeal. Winterised is rather alien to us, as is doing things to your car for winter. I assumed most housing where it snows in the US would have central heating radiators. It seems not.

    I can't believe how cheap your housing is but I suppose it is all income related. As cheap as housing is, so many lost homes in the latter half of the 2000s. I laughed the first time I heard of the bank called Fanny May. I'm sure you know the word fanny has different meanings in other parts of the world.

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  15. During the stock market crash of 2007-8. bamls were tying to dump prperties, to get them off their books. When a bank repossesses a place, they are required to mow and to keep the utilities on, etc. It actually became a liability to them to have so many homes. It was a mess, and I was very glad that our own home was paid for. I never understood why a bank simply didn't renegotiate with the person they'd extended credit to.

    In any case, it is not like that now. The last house we bought was $65,000. We were a little shocked to discover, a year and a half later, that the property is valued at $107,000. We are done buying houses, I think.

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  16. It's beautiful! What? $20,000? Seriously? This is a wonderful home. Lucky you!

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    1. This is a house that was purchased in 2008. We sold it maybe 7 years ago.

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