Best place to park 75-100 K these days?
Honestly. ... buy a house in rural flyover...Ohio, Iowa, Missouri, Tennessee,(the midwest).
Worst case is you have a house.
You could also rent it.
Or fix it up like a studio.
Or You could borrow money against the house title,
basically all your options are open. You get the point.
Do this. trust me. There is no better place right now to park the money.
March 17th, 2017 1:00pm
And when the house has a 50k repair bill?
March 17th, 2017 1:03pm
What are the odds of that happening?
March 17th, 2017 1:03pm
Grumpy Old Man
March 17th, 2017 1:06pm
Two or three things could go wrong in a short space of time: roof ($3-12K), septic ($6-20K), hvac ($4-12K). At the high end, there you have $40K+ in repairs.
Plus watch out for real estate taxes!!! Many of these rotting worthless shithole cities in the interior like Dayton punish the stupid middle class types who remain within the city limits with RE taxes that are very high compared to the absurdly low quality services and ghetto school systems they harbor.
March 17th, 2017 1:08pm
Depends on what you're looking at. If the septic has been replaced recently and roof maybe 15 years ago, you shouldn't have to worry about either for awhile.
HVAC can be expensive but issues are rare.
Of course there's a chance that anything can happen.
Taxes are low in rural areas. That's one reason I suggested rural and not cities. The more populated, the higher the taxes.
March 17th, 2017 1:24pm
Do you accidentally sell such property, Tom?
Your originally stated worse case scenario was incorrect, you are now adding extra criteria to correct it.
March 17th, 2017 1:27pm
I missed the rural. Some people here think anything in a state like Ohio or Indiana is rural. Yeah, that's probably OK. Rural areas in the midwest usually have shitty school systems and are culturally resistant to big tax hikes.
So you should be ok. The biggest problem will be your unloading the property at the back end. Highly available housing usually spells a buyer's market. So buy right, at an auction or under some extreme seller duress, which in this region is easy to find.
And appreciation in the interior of these states is extremely low. So, again, lock in your profits when you buy.
March 17th, 2017 1:40pm
I think Lotti's 2% per year is a pretty good (probably low) probability for a high expense event.
Also look for the right insurance policy. Most homeowner policies are void if you don't occupy the property continuously or if you rent it out for long periods.
March 17th, 2017 1:44pm
What final age do you generally aim for with houses in America?
Here in the Netherlands we now demolish only the very worst quality houses from the 1960's, but maybe half of the houses built in the 1920's are still being maintained for long term future usage.
Houses built today are expected to last at least a century, but that is beyond the scope of financial considerations.
My bank account.
March 17th, 2017 2:07pm
I've bought houses in this area in the past. Most of the houses on the market were built between 1800 and 1980 during which almost the entire midwest had no building codes of any kind.
No kidding about the termites. There are ways to build a house that will keep it safe from termites. Ways known for hundreds of years. No one builds their houses with these techniques.
Then you have the shoddy electrical and water work.
And if you buy a house with a basement, god help you.
Sure you can buy but you better know what you are doing.
March 17th, 2017 2:39pm
Don't remind me!
"Oh, this drainage field is shot, the only place that passes the perc test is over on that hill so we'll have to install the pump system for $20k, a new tank for $10k, and remove all those big trees, which shouldn't run more than $2k each, lets see there's about 20 of them..."
March 17th, 2017 2:41pm
And when you're done paying for that you have a house appraised at $80k.
March 17th, 2017 2:42pm
"The biggest problem will be your unloading the property at the back end."
"buy right, at an auction or under some extreme seller duress, which in this region is easy to find."
This is true. However, auction buying you really better know exactly what you are doing. It's cash, as-is, all sales final. If you are the winning bidder and it's a steal and the other bidders are the local real estate agents, you can bet they know things you don't, but you'll soon enough find what they are.
There definitely are properties that are worth much less than $0 at auction.
For example, are you aware that if the previous owner has a toxic waste disposal site on the property and you buy it, under federal law you will be responsible for the full clean up, no matter how much it costs, even if that is $50 million?
March 17th, 2017 2:47pm
Septic systems on the east coast are a much worse deal.
Years ago I did some contracting for a startup in Princeton, NJ. One of the lead engineers who was having a new house built bitched incessantly about how he was being extorted by the local sanitation authority over his septic system.
Apparently, all building supplies dealers there immediately report all deliveries of building materials to the local building agencies. Even though you're paying them, their God given duty is to stab you in the back and rat you out.
He was having some septic work done, some component of the job wasn't yet certified by the county, so they were told about the materials being delivered, and they went out and slapped fine after fine and fees on the guy. I think he finally hired an attorney to help clear it up.
His septic on a $350K house build cost him $20-30K if I recall.
March 17th, 2017 3:42pm
Really common scenario too. Along with all the other common scenarios!
As an old hipster, "I don't watch TV. In fact I don't even own a TV!" True! But I'll not tell you about my HD monitor and all the stuff I watch over on line streaming. Cable's a racket.
At the hotel (contracted customer stuff) last week though they had cable. There was some home improvement channel show about people both buying a shit house and then fixing it up. I watched one of these each of the 5 nights I was in the hotel. What a nightmare. But very typical. I was surprised they were telling the truth. Fixing mold and rot and other serious problems in a 1930s bungalow was running $200,000! Yep.
March 17th, 2017 4:00pm
(Basically they have to gut the entire fucking house and rebuild it from the inside. You would be WAY better off doing a demolition and then building a replica. You'd get better quality and a lot cheaper.)
March 17th, 2017 4:01pm
Take a year off and see the world.
March 17th, 2017 4:03pm
All five nights I was shouting "Get Out!" at the TV, wishing I had some black brothers around me to support me in this (I'm referencing the EXCELLENT recent top grossing horror movie). These houses truly are a HORROR story that you will not soon extricate yourselves from and your decisions to stay and fix problem after problem are just as dumb as the busty college girls that decide to go towards the creepy abandoned cabin in the woods rather than run away.
March 17th, 2017 4:04pm
No-one on their death bed ever said 'gee, I wish I'd bought another house'.
March 17th, 2017 4:08pm
"all building supplies dealers there immediately report all deliveries of building materials to the local building agencies"
Very interesting. Reminds me of a situation where I had a cat and got a rabies shot. The next year I got a notice and citation from the city that my rabies was not up to date. Fucking hell. Currently I actually see an underground vet for the shot. She assures me she doesn't report. I feel like she is a mobster vet.
March 17th, 2017 4:10pm
The goddamned mafia runs New Jersey, including all government agencies. That's what I have been told.
You mentioned mold. That is a total wild card that we never thought about 20-30 years ago which is a big deal today. That could easily neutralize any profit or even much capital recovery from a real estate investment.
Foreclosures offer the opportunity to buy property for 2/3 of its appraised value, but you generally don't get to make any detailed inspection.
March 17th, 2017 4:18pm
People from NJ simply can not be trusted at all.
Dated a Jersey girl once. What a fucking trip THAT was.
Not saying I wouldn't do it again. I probably would, as a research project with experimental protocols. It's like dealing with some alien species.
March 17th, 2017 4:51pm
Hey, I sure wouldn't mind getting some more of that Arcturian poontang!
-- Private Frost
March 17th, 2017 5:34pm
> So you should be ok. The biggest problem will be your unloading the property at the back end. Highly available housing usually spells a buyer's market. So buy right, at an auction or under some extreme seller duress, which in this region is easy to find.
I would be looking to hold long term.
> And appreciation in the interior of these states is extremely low. So, again, lock in your profits when you buy.
I was looking at regular listings, might have to look into HUD for the best deal but I hear those are more difficult to buy as realtors have first dibs.
March 18th, 2017 11:20am
There's shitloads of HUD foreclosure auctions. I don't thing real estate agents have dibs, but they certainly know more about the property than you do and are better at bidding.
March 18th, 2017 12:05pm
I am considering putting near that amount in a CD returning 1%. It's going to have to be like 60-month CD.
Option 2 is a 19-month CD at 0.5%. sux either way.
March 18th, 2017 2:45pm
Hoyza, how about a stock like Verizon that pays dividends?
March 18th, 2017 7:19pm