Tue 29 Aug 2006
Well, I bought another house today! I wanted to be done buying houses so I could get back to focusing on multi-units again, but there are just so many deals to be had right now! Yesterday we found out about a few homes that had come back to a builder. This builder was offering a great incentive to get them resold as soon as possible. They’re taking $75k off and paying $6,500 toward closing costs. After looking at comps, there appears to be about $50k to $65k in equity comfortably, with possibly more due to the great location of the lot. It backs up to a huge grassy park with mature trees. These are the very last of 600 homes that have gone in over the last two years. The builder is also paying 10% commission to the Realtor, which is great for us because my husband has his license.
The house is in Goodyear, AZ which is about 10 minutes west of the new Cardinals stadium and the highest dollar development project ever undertaken in Arizona and about 10 minutes east of Buckeye, which is projected to grow to two million people over the next fifteen years or so. There’s also a big Westcor mall going in about three miles away from the house, with Harkins theatres and Dillards already on board as anchors. And, there is a proposed spring training baseball facility possibly going in nearby as well. There’s a lot positive going on, not the least of which is the widening of the freeway to four lanes + carpool lane each way. After stop and go traffic today at 2:00 pm, I quickly realized I’ll be using side streets until that project is done. We have mountain views from the back of the house. These mountains are three miles away and its my favorite hiking spot that I have to drive much further to get to now.
We’ve decided we’ll move into the house. That way we can get in with zero down and the commission we get back from the purchase will be enough to cover backyard landscaping, window treatments, paint, and mortgage payments for a year. Since we have enough equity right away, we’ll re-fi into a better loan shortly after closing.
We’re just coming up on two years in our current house, and we were just getting comfortable. But the plan is to move every two years for a while so intellectually we always knew this was the plan. For each of our primary residences, we’re planning to live in them for two years then rent them out for three, then sell. We’ll take the capital gains tax free since we lived there two out of the last five years each time. Now I just need to psyche myself up to pack everything up and settle in once again!
10 Responses to “Next Rung Of Our Primary Residence Ladder”
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August 29th, 2006 at 9:01 pm
Now we’ll really be neighbors! Can’t wait to hear more!
August 30th, 2006 at 2:48 pm
Would you mind sharing the subdivision name? Sounds like you’ll be by me also! My friend was also telling me about some new construction up north. $100k off does sound tempting!
http://www.afterreadingrichdadpoordad.com
August 31st, 2006 at 10:43 am
[…] My friend who runs TheLandLordBlog.com purchased a new construction a few days ago which you can read about here. Builders are now offering incredible incentives to buy homes. […]
September 2nd, 2006 at 10:20 am
Just a note to say I really like your blog, and you’re doing a great job. I’ve also been using Seeking Alpha’s write ups of the housing market, and thought you might also find them useful.
http://usmarket.seekingalpha.com/by/type/housing
September 2nd, 2006 at 10:33 am
Thanks for sharing Daniel!
September 4th, 2006 at 9:57 am
“We’ve decided we’ll move into the house. That way we can get in with zero down and the commission we get back from the purchase will be enough to cover backyard landscaping, window treatments, paint, and mortgage payments for a year. Since we have enough equity right away, we’ll re-fi into a better loan shortly after closing.”
That’s a really smart plan! Congrats! Now, I realize you haven’t had long to plan, but did you decide to sell your current primary residence on the MLS, L/O, Rent-to-own, or rent it out?
September 4th, 2006 at 10:39 am
We’re planning to rent out our current primary for 3 years then sell. We’ll have to put it on the market early to make sure it sells before the 5 year mark. That way we’ll still satisfy the requirement of living in it 2 out of the last 5 years and we’ll be able to take the gains tax free.
September 12th, 2006 at 5:31 am
How do you find homes that have come back to builders in various neighborhoods?
September 12th, 2006 at 9:30 am
We stay in touch with the sales people in the model home sales offices. They say they will let you know when something comes back, but realistically they become swamped at closeout time and you need to call or email them regularly to get status. When deals come up they don’t last long.
October 3rd, 2006 at 12:08 pm
I just stumbled on your blog today. Funny, we bought new construction in a very similiar situation as yours.
My story is at: www.mind2money.com
We’re buying it for 261k which is approximately a 40k reduction.
Take care.