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sandra bernal

Freshman Member
Joined
Jul 4, 2003
:eyecrazy:
Hello,

I currently live in the southern california area. I will be gointo veterinary school in the fall to ucdavis. I decided i would like to purchase a home instead of renting for for years. Because of the market i cannot afford to buy in Davis but i have found 2 properties in the Woodland area. My question is this.

There is a typical (nice) halfplex available and i have negotiated with the seller with no help from my agent from 240k to 229k since the roof needs repairs, carpet, fencing. The property has a small pool and a nice size yard. Living space is 1484 lot size .13acres. 3 bed 2 bath and an enclosed patio. Built in 1980. It is located in an ok area (a street with all halfplexes). Kind of a main street.
The second property is was originally listed as a halfplex because one side of the house( the side where the garage is located) is in contact with the neighboring house. It is not attached (does not share the same roof). Now the listing agent has placed in for sale as a single house on lot but included in the comments that it has a zero lot line. This home has 4 bedrooms 2 bath (no master with bath). Sq footage 1786 lot size .11 acres in a well established neighborhood. The price is 240K Most are owners in area as opposed to renters and no halfplexes nearby.
My question is this: i will be renting out rooms while in school to make the payments and mostly wanting to make this an investment property. im thinking of reselling (the market allowing ) in about 4- years. Although i would love to have a pool (and it may make it more appealing to renters, i am willing to sacrafice the pool to make a better investment. So i was thinking of condensing the garage from a 2 car unit to a 1car unit to seperate the house from the neigboring house and give it more of a single house on lot appearance. But i dont know how much value i would lose going from a 2car garage to a 1 car garage. I was thinking of adding the pool later to at least enjoy it. i know i may not get any value for the pool it would just be for my enjoyment. Im just not sure if my idea is crazy. ANy feedback would be greatly appreciated. :D
 

Walter Kirk

Senior Member
Joined
Jun 24, 2003
Professional Status
Licensed Appraiser
State
New Jersey
You need to call an appraiser! The answers to all of your questions depend on local market conditions. Since the appraisers fee will be approximately 1/4 of 1% of the purchase price it is cheap insurance. I would be careful with a pool in an investment property. The possibility of tenants being injured in your pool must be considered.
 

Ghost Rider

Senior Member
Joined
Apr 27, 2003
Professional Status
Banking/Mortgage Industry
State
Connecticut
If you are planning on renting out rooms and having roomates, I'd stay away from the pool due to the insurance issues - last thing you need is a tenant to get hurt, and file a homeowner claim against you - As far as the other questions, you need to talk to someone more familar with your market to answer them - either an appraiser who is local, or even ::shuddering:: a realtor who is knowlageable......
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
I agree with MH. Wanna sticker shock, mention to the insurance agent that you will be renting it out with a pool. :eek:
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
The property (almost certainly) will not become more valuable just because it no longer shares a common wall at the garage. Besides, the city probably has parking requirements and they probably won't allow you to remove a garage space. Besides that, your neighboring house shares that section of roof and foundation with you, and possibly some electrical and plumbing stub-ins as well. They might also have enough say in this to prevent you from doing this. My advice to you is to leave it alone.

As for adding pools and such, let me say this: most additions you can make will not return sufficient value in the market to justify their construction costs. This doesn' t take into consideration the hassle factors of dealing with the city for permits, dealing with contractors, facing a new tax assessment (it's a big deal in California), or any one of several other issues. From an appraisal and value standpoint, the only 'good' reason to consider additions or big-ticket extras is because you intend to stick around long enough to get your use out of them. In other words, for your own enjoyment. Veterinary school will be tough enough without having to deal with these other issues.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
While my esteemed fellow appraisers have given you some advice, please seek out a local appraiser who is familiar with that type of property. I am sure there are rental properties in California that have pools and the insurance issue might not be as big as made out here. Lots of things need to be checked out including the legallity of renting out rooms. I wish you well.
 

sandra bernal

Freshman Member
Joined
Jul 4, 2003
:p Thanks for the advice i will definitely take all the info into consideration. It turns out that while i was thinking the property in the nice area that i was considering altering the garage to was sold over the weekend. So if i still want the pool property B) i have to act fast. I will call insurance companies to get a feel for the pool / renting situation. Thank you for bringing it to my attention; i hadn't even considered the issue. It is much better to plan for the worst so i will add that to my list of cons. The market is certainly not helping (well in the california area anyway). Properties are insane. the property i am considering had an asking price of 240k totally overpriced and i got the seller down to 229K. Still about 10K more than a similar halfplex sold a couple of weeks ago. It would seem that the properties are at the max value. I cant imagine them increasing anymore. It has me spinning in circles as to wether to purchase or not. Ive been looking at a couple of stats here and there but can anyone rec. stats on home values, interest rates and possible predictions of what the market may do in 5 years? (j/k about the last question im just realy frustrated with the market right now.) Well im trying to keep optimistic while mantaining my sanity and my intuitive logical reasoning but its challenging. I admire all of you for having the ability to deal with this bussiness. I dont think i could do it; it would drive me crazy. :beer:
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Sandra:

I went to Davis and lived west of 113 because despite the 'commute' it was waaay cheaper than housing in Davis... guess some things never change about University towns...

My crystal ball is a little foggy today: the Ca housing market is so totally nuts that if you stay out you can get priced right out of the market - and if you have the where-with-all to purchase WHILE doing vet school then you might get your foot solidly in a door that would be a tighter squeeze later... and more power to ya!...

It is however a slightly higher risk to purchase in outlying communities... consider what would happen if the economy continues to take a turn for the worse, fuel prices soar and folks no longer desire homes in communities lacking employment opportunity... I have friends who were quite 'upside down' on their Central Valley home - commuters to Livermore during the last oil crisis they couldn't GIVE their home away and there were foreclosures all around town in nice new little subdivisions.

On the other hand: I was astounded at how many folks are presently commuting from homes in and around Sac to the Bay Area :blink: . I-80 is chock-a-block commuters afterhours heading home... skipping the causeway might be an attractive alternative to some of them if things go bad...

If population in CA continues to rise (a near certainty) then folks need a place to live no matter what.

What I am saying is there is no telling what the future will bring:

In a worst case scenario where the CA housing market totally tanks...
you would still have several options:
1. selling at a loss,
2. dropping the keys behind the door and defaulting on the loan.
3. holding on to the property as a rental until the tide turns again?

One of my best friends graduated form Davis and bought high and sold low 3 times running in her moves from CA to CO and back again... she was not a happy camper... Finally got the buy low and sell high right and is much happier thereby!

Who KNOWS what the future will bring? Throw the dice and take your chances! And don't agonize if you toss snakeyes, next toss may be a winner, winner winner!
 
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