The Historic Brick Bungalow That Looks Like New: 5327 W. Waveland in Portage Park
Portage Park is known for its many historic brick bungalows like this 4-bedroom one at 5327 W. Waveland that was built in 1918.
This bungalow was bought from the bank in late 2008, renovated, and now is back on the market for $164,900 more than the 2008 purchase price.
The listing says that just about everything is new: electric, copper plumbing and windows.
It has a new maple kitchen with stainless steel appliances and granite counter tops along with renovated bathrooms.
The basement has been finished with a family room, a bathroom, and the fourth bedroom.
It has an unfinished attic.
The house has central air and a 1 car garage.
It is also on a slightly larger than normal Chicago lot of 30×125.
Michael Parish at Baird & Warner has the listing. See the pictures here.
5327 W. Waveland: 4 bedrooms, 2 baths, 1 car garage, 1485 square feet
- Sold in September 1999 for $120,000
- Bank owned in April 2008
- Sold in September 2008 for $135,000
- Currently listed for $299,900
- Taxes of $4987
- Bedroom #1: 12×10
- Bedroom #2: 12×9
- Bedroom #3: 12×14 (lower level)
- Bedroom #4: 7×10
- Family room: 23×12 (lower level)
The link to baird & warner is not working
Thanks. I put a couple of new links in. These should work.
you feeling better sabrina?
Oh GOSH they renovated the place but i see PVC piping in the attic 🙁 i cringe when i see PVC.
for the price and the are its not bad at all, Brick bungalows have been selling around the 250k and the foreclosures listing at 199k.
“i see PVC piping in the attic”
You using ductile steel for your waste lines? And vent lines, too? Really?
As to the rehab cost, $75k? Less? Can’t imagine they spent much more than that, right?
Redfin link:
http://www.redfin.com/IL/Chicago/5327-W-Waveland-Ave-60641/home/13462445
Flipper bought in an all cash sale in September 2008.
Nearby Similar Listings and Nearby Similar Sales feature show this as the most expensive house in the vicinity.
Even with 20% down the monthly payment is still $1,700 a month which would give this owner the damn near the most expensive mortgage payment on the block.
Unless the demographics of the neighborhood change and an influx of newer residents making significantly more money decide to take over the Portage Park; well, you can make your own conclusions.
This was a $120,000 home at the start of the boom and now it’s a $300,000 bungalow. A $300,000 bungalow! Come on.
Oh wait, this is cribchatter. Everyone makes $100k a year, SFH are in short supply and living in the city near so many cultural amenities costs a premium, and bunglows are desirable and expensive and the fact that I’m not willing to devote a significant portion of my income to housing makes me the loser. This has nothing to do with a flipper trying to make a quick $70k off a naive FHA 3.5% down buyer but is rather a reflection of the desirability and high demand of SFH on the northside of Chicago. That’s it.
“You using ductile steel for your waste lines? And vent lines, too? Really?”
i have PVC running from my kitchen down to my utility sink in the basement which was PVC also, and guess which of all the old pipes have the most problems. yep the new PVC ones.
and if i wasnt moving, this summer i was planning to gut the kitchen replaces all the PVC and rock the sea-foam green distressed cabinets 🙂
“Even with 20% down the monthly payment is still $1,700 a month which would give this owner the damn near the most expensive mortgage payment on the block.”
I have an old friend who bought a brick bungalow last october around belmont and central for 265k turned the basement into a 1 br apartment (illegally) and rents it for 800 a month their mortgage is 1800 so now they only pay 1000. he makes only 40k a year and her 30k and they can swing 1000 easily
“Oh wait, this is cribchatter. Everyone makes $100k a year, SFH are in short supply and living in the city near so many cultural amenities costs a premium, and bunglows are desirable and expensive and the fact that I’m not willing to devote a significant portion of my income to housing makes me the loser. ”
Half of cribchatter doesn’t realize the city goes this far west and 3/4 of cc wouldn’t consider living in this location for *free*, so your sarc-argument has limited impact.
By renting out the basement they’re essentially ‘doubling up’ and getting a little help with the mortgage. It doesn’t matter if they rent to a friend or a stranger or a family member, they’re getting help with the mortgage – and they have people living in their basement.
Not exactly what I would call an ideal situation or even sustainable.
“I have an old friend who bought a brick bungalow last october around belmont and central for 265k turned the basement into a 1 br apartment (illegally) and rents it for 800 a month their mortgage is 1800 so now they only pay 1000. he makes only 40k a year and her 30k and they can swing 1000 easily”
“replaces all the PVC”
With? Ductile steel? Bamboo? McDonald’s straws? What, Groove, what?
“Not exactly what I would call an ideal situation or even sustainable. ”
its not bad either if you do it right
would you rather have rats live rent free?
sound like grooves friends prove you wrong: they live within their means and own a house; their ‘rent’ is equivalent of yours.
Prior owner had ~$200k in mortgages on the place, refi’ing the 1st a few times.
No, they don’t prove me wrong.
It’s like my parents moving into my second bedroom and then collecting rent to make the mortgage more affordable.
Now change the ‘second bedroom’ for ‘basement’. Same thing.
Again, illegally renting out a basement sounds like ‘doubling up’ to me.
Crazy, the prior owner couldn’t afford $200k in mortgages yet the seller expects the current owner to service mortgages ever larger than the foreclosed owner.
Oh that’s right, houses are intrinsically expensive. The new buyer better suck it up an pay it. And he will, probably with a FHA mortgage. And then he’ll try to rent out the basement, illegally.
Here’s the FHA hockey stick graph of dq’s.
http://4.bp.blogspot.com/_pMscxxELHEg/S4wrowASr6I/AAAAAAAAHpE/CZFqH25Wx94/s1600-h/FannieMaeDelinquencyQ42009.jpg
do the taxes seem high ?
“do the taxes seem high ?”
2008 AV was $33,100
2009 AV is $30,968
No H-O exemption in either year.
A buyer can expect to have *realtively* lower taxes, tho I wouldn’t promise any actual decrease.
“Not exactly what I would call an ideal situation or even sustainable”
hey not saying its perfect but their salary is small and limited so to get into a some what decent area with four bedrooms and a house that was turn key and brick without over extending them selves that is the option they took.
the basement already had a “in-law” kitchen and a full bath so turning it into a full kitchen and adding a bedroom was easy cost them i think 7k.
A turn key updated brick bungalow for 299k (it will sell at 260k) is a good price. in 2007 bungalow i looked at needed some updating and was 500k.
“With? Ductile steel? Bamboo? McDonald’s straws? What, Groove, what?”
I would use duct tape it works for everything 🙂 no seriously i never touch sewage/waste lines i will always hire out for that. (same for electric). I dont know what kind of steel runs in the rest of the house but thats what i would like to go with
You can’t compare 2007 pricing to 2010 pricing and think it’s a deal. You have to compare your friend’s $70k household salary (which is above the Chicago median BTW) and think is $265k too much for that salary or is it OK. There’s no shortage of bungalows at belmont/central (and lots of foreclosures as members of the trades have decimated by the real estate bust).
“A turn key updated brick bungalow for 299k (it will sell at 260k) is a good price. in 2007 bungalow i looked at needed some updating and was 500k.”
“You can’t compare 2007 pricing to 2010 pricing and think it’s a deal.”
never said its a deal. saying its getting close to what many would think is fair pricing.
“There’s no shortage of bungalows at belmont/central (and lots of foreclosures as members of the trades have decimated by the real estate bust)”
oh gosh when i help them move in i saw many boarded up windows but your comparing a beat up foreclosure to a turn key its not relevant.
“You have to compare your friend’s $70k household salary and think is $265k too much for that salary or is it OK.”
Is it really to much? after the illegal rental your talking 1200 a month (200 is for maintenance/repair reserve) even if they had to car notes and 10k in cc debit its still easy to swing
btw they dont have car notes he is a good mechanic and get good used cars cheap and keeps it going for years. You need to see he 80’s jag he rolls in its mint
” You have to compare your friend’s $70k household salary (which is above the Chicago median BTW)”
And the median Chicagoan is a renter. So, is $70k below the median for homeowners in 606xx? I’d wager not.
This one is good for a laugh, too. Talk about priced too high for the neighborhood.
http://www.redfin.com/IL/Chicago/2540-N-Ridgeway-Ave-60647/home/13447764
Seriously? Half a million in this no man’s land and no central A/C?
I just can’t imagine anyone offering anywhere near the ask.
Ok i live in a different world and mindset than most on CC i guess.
when its come to criticizing a mechanic and his wife in customer service with two kids making 70k a year getting a 265k 4br house which they will probably retire in and doing it without over extending themselves.
but yet we are lumping them in with a 150k idiot couple buying a 750k 2/2 condo in SoPo or LP and sprouting a kind then trying to move in 3 years of buying.
AHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!
This isn’t a “flipper,” HD. This is a rehabber. This person is adding value; he/she is not sitting on the couch for a year and expecting to get paid for it. I’m not saying the ask will be the final price–but you treat everyone who purchases and then relists for a higher price as though they were all the same. They are monumentally not.
“when its come to criticizing a mechanic and his wife in customer service with two kids making 70k a year getting a 265k 4br house which they will probably retire in and doing it without over extending themselves. ”
But Groove, they’re reaching for a better life and spending ~30% of gross (before the renter) on their house and that keeps the entry price to liveable Chicago homes too high to permit HD to buy a nicer, larger house in his preferred ‘hood for 15% of his gross. Until everyone is not willing to stretch, HD can’t have his choice of houses in his choice of ‘hoods for what he’s willing to pay and it’s just.not.fair.
It also does make for a housing price market that will not be sustainable when (not if) mortgage rates are 8%+. I hope your friends got a 30-year fixed, otherwise they may prove HD right in 3/5/7 years.
lol, yup
groove, I’m not convinced that paying $265k for a bungalow in polish town and then illegally renting out the basement to help with the mortgage is a sensible thing to do.
What did that bungalow sell for 10 years ago? The only thing that’s changed in 10 years at Belmont/Central is the new A&G. $265k is still a lot of money. Even in this thread, the property sold in the 100’s, once in 1999 and once in 2008, and now here we are, even at $260k, the price has doubled because it has granite countertops.
There’s still a lot of bubble and bubble thinking to deflate.
“Is it really to much? after the illegal rental your talking 1200 a month (200 is for maintenance/repair reserve) even if they had to car notes and 10k in cc debit its still easy to swing”
I don’t see anything intrinsically wrong with PVC that would cause problems with sewage/waste lines. What kind of problems are you having Groove? Are the pipes just not large enough?
My plumbing experience is working in an Ace Hardware for all 4 years of high school so I am by no means an expert but I can’t see what specifically in PVC would cause an issue for sewage/waste.
“Groove77 on March 10th, 2010 at 10:00 am
“With? Ductile steel? Bamboo? McDonald’s straws? What, Groove, what?”
I would use duct tape it works for everything no seriously i never touch sewage/waste lines i will always hire out for that. (same for electric). I dont know what kind of steel runs in the rest of the house but thats what i would like to go with”
“My plumbing experience is working in an Ace Hardware for all 4 years of high school so I am by no means an expert but I can’t see what specifically in PVC would cause an issue for sewage/waste.”
Minus the Ace experience, I had the same thought and don’t really see steel as a practical substitute.
On the one hand anon(tfo) you’re mocking me, then on the other hand, you say that what these people did will not be sustainable when interest rates rise to 8%. I’m confused.
I’m just saying that historical defaults were less than 1%. This concept of ‘stretching’ to buy real estate came into vogue during the bubble (and persists today) and now defaults are upwards of 12/14%. Buyers will be getting a reeducation whether they like it or not.
“#
anon (tfo) on March 10th, 2010 at 10:40 am
“when its come to criticizing a mechanic and his wife in customer service with two kids making 70k a year getting a 265k 4br house which they will probably retire in and doing it without over extending themselves. ”
But Groove, they’re reaching for a better life and spending ~30% of gross (before the renter) on their house and that keeps the entry price to liveable Chicago homes too high to permit HD to buy a nicer, larger house in his preferred ‘hood for 15% of his gross. Until everyone is not willing to stretch, HD can’t have his choice of houses in his choice of ‘hoods for what he’s willing to pay and it’s just.not.fair.
It also does make for a housing price market that will not be sustainable when (not if) mortgage rates are 8%+. I hope your friends got a 30-year fixed, otherwise they may prove HD right in 3/5/7 years.”
“I hope your friends got a 30-year fixed, otherwise they may prove HD right in 3/5/7 years.”
I hope so too. he is a smart man but its very easy to be strayed by a certain type of RE professional pushing the lower monthly nut option saying in 5 or 7 years you will be making more and “it will be easy to cove the adjustment amount”.
“I’m not convinced that paying $265k for a bungalow in polish town and then illegally renting out the basement to help with the mortgage is a sensible thing to do”
I cant say its sensible, but its not crazy or WTF type. There are better options and he could have waited too. I would have went a different than he but he is a different person than I. I know he chose that area for being real close to family (his mother in law is two streets over) and closer to work.
His example it close to the border of “well you could of got a better deal but hey its not that bad” compared to most we see on CC the “wtf you doing”
“I don’t see anything intrinsically wrong with PVC that would cause problems with sewage/waste lines. What kind of problems are you having Groove? Are the pipes just not large enough?
I can’t see what specifically in PVC would cause an issue for sewage/waste.”
PVC connections i found fail more than others. Maybe its my house and a few friends houses that are a small odd percentages. or we randomly by strange cosmic reasons got the same lazy pipe fitter that did our work.
I think there is a push by plumbers to destory PVC. Because anyone who played with legos and owns a hacksaw can work with PVC, but when need steel pipe cut-and-threaded it gets scary and you call a plumber.
“Minus the Ace experience, I had the same thought and don’t really
see steel as a practical substitute.”
“I’m just saying that historical defaults were less than 1%. This concept of ’stretching’ to buy real estate came into vogue during the bubble ”
Dude, it’s like you think nothing ever changed b/t 1885 and when you first became aware of adult finances in practical application. People have stretched to buy forever–not everyone, but lots, and not at all times, but often.
Did the stretching get worse during the bubble? Yeah, b/c normal questionably-rational behavior gets amplified in bubbles all.the.time. It’s a big part of why bubbles happen.
“what these people did will not be sustainable when interest rates rise to 8%”
Yeah, bc at 8% rates, you can’t finance 3.5x gross for 30% of gross payments. So the price changes, but not the behavior. I’m *certain* that most people doing this don’t adequately consider the consequences for their equity-capital this will have, but I’m also *certain* that most of them would shrug their shoulders and say “what are we going to do, live in an apartment with our 3 kids and our 2 dogs for the next 20 years to avoid something that *might* happen? And that I might be able to afford if it does? I’d rather be happy ’til then and deal with the problem *if* it happens.”
You think that’s foolish, I agree that it’s not really “rational” (neither am I, much of the time), but so what? Ain’t your life, and if it makes it harder for you to live where you want for what you want to pay, ain’t their problem, is it?
Wait a minute here, I thought that rising interest rates were not related to lower housing prices?
But like you said, rising interest rates make it harder to finance at their income.
So basically groove’s friends bought now so that they wouldn’t be priced out forever!
But seriously, it’s not my problem that they overpaid, we need knifecatchers on the way down. I didn’t make the real estate bubble, I’m just living through the bust. I’m not waiting for ‘the bottom’ i’m just don’t want to pay $2,700 a month to buy one of the crappiest house on my block. I know there will be more ‘deals’ coming because there aren’t enough buyers to pay $2,700 a month as there are $2,700 a month houses.
““what these people did will not be sustainable when interest rates rise to 8%””
“don’t want to pay $2,700 a month to buy one of the crappiest house on my block”
Get your credit score up, HD, and you’ll be able to get a better rate. Or save a little more for a DP. cuz I’m pretty sure that the “crappiest house on the block” in OIP isn’t costing $2700/mo at 5% interest and $600/mo Taxes+Ins given the number of places you’ve shown us that you think are *nice* that are selling for under $400k unless you have shite credit.
ps:
“Wait a minute here, I thought that rising interest rates were not related to lower housing prices? ”
I’ve *never* (ever, never, ever) said that. I recognize that there is not a 1:1 relationship, b/c of lots of things, but firmly believe that significant increases in financing expense lead to a lower price for House X than would would be possible with cheaper financing.
“So basically groove’s friends bought now so that they wouldn’t be priced out forever!”
i kind of think he bought now so he could have a roof over his head and a yard for his kids.
“i kind of think he bought now so he could have a roof over his head and a yard for his kids.”
I don’t even know the guy, and I more than kind of think that.
As someone here said (sorry I can’t remember, cuz it’s great), he’s letting future-groove’s-friend worry about what happens 10 (20/30) years from now when (maybe) he can’t sell the house for more than $165k. And for now he’s got a house for his kids close to his family and a life that works for him–>so groove’s-friend (the one that actually exists, today) is happy.
It was DZ that lets future DZ handle the muck.
The future person scenario is also the basis for a book titled “Stumbling on Happiness”. Interesting semi-pop pysch book in my opinion.
“It was DZ that lets future DZ handle the muck.”
To give credit (or blame) where it’s due, it’s really my wife who came up with that when I troubled her with plans for our future. Me, I’ve got backup plans for backup plans etc.
“There’s still a lot of bubble and bubble thinking to deflate.
“Is it really to much? after the illegal rental your talking 1200 a month (200 is for maintenance/repair reserve) even if they had to car notes and 10k in cc debit its still easy to swing””
unless, of course, one of them loses a job, the wife gets pregnant again, there’s a longterm illness or disability, or the city shuts down the illegal conversion. Have I told you guys about the legal secy who borrowed $400k for a house, then lost her job?
“unless, of course, one of them loses a job, the wife gets pregnant again, there’s a longterm illness or disabilit.Have I told you guys about the legal secy who borrowed $400k for a house, then lost her job?”
if thats the case NOBODY should buy a house or anything. in reality no ones job is truely secure.
No you need to have a payment that’s sustainable and sufficient savings to withstand a short to medium bout against unemployment. Your friends are starting out of the gate with some strikes against them and things might have the serious potential to get rough in the future.
“#Groove77 on March 11th, 2010 at 8:25 am
“unless, of course, one of them loses a job, the wife gets pregnant again, there’s a longterm illness or disabilit.Have I told you guys about the legal secy who borrowed $400k for a house, then lost her job?”
if thats the case NOBODY should buy a house or anything. in reality no ones job is truely secure.”
“No you need to have a payment that’s sustainable and sufficient savings to withstand a short to medium bout against unemployment. Your friends are starting out of the gate with some strikes against them and things might have the serious potential to get rough in the future”
I still agree with you HD that they didnt do it in the ideal way. but its really not egregious (like the lawyer word?) what they are doing.
and yes it can or may get rough in the future, but also may get better. rememeber when there kids get to school age there will be no more daycare payments which can range from 200-300 a week. and that will easily cover the basement income.
“200-300 a week”
that 200-300 per week for ONE CHILD, i think the second gets some discount so lets say 375-600 per week for two kids.
Groove: It’s reckless negligence!
“if thats the case NOBODY should buy a house or anything. in reality no ones job is truely secure.”
Yep.
Hahahaha
The road to financial ruin began with the best of intentions. The depression turned me into a bankruptcy attorney. Everyday I see people who ‘stretched’ or entered into a financial transaction hoping for the best. If we’ve learned anything this crisis, it’s best that you have your ducks lined up before making the largest purchase of most people’s lives or else when shit hits the fan you won’t be the one to survive.
“when shit hits the fan you won’t be the one to survive.”
Yep, cuz everyone who didn’t have their ducks lined up in 1929 *died*.
I’m pretty pessimistic and cynical and risk-averse, but I couldn’t live my life with that amount of caution/fear.
et tu wicker? et tu?
“Groove: It’s reckless negligence!”
Theres nothing wrong with a healthy amount of caution/fear. It’s called prudence. Ever heard of it?
“anon (tfo) on March 11th, 2010 at 9:39 am
“when shit hits the fan you won’t be the one to survive.”
Yep, cuz everyone who didn’t have their ducks lined up in 1929 *died*.
I’m pretty pessimistic and cynical and risk-averse, but I couldn’t live my life with that amount of caution/fear.”
Oh HD you’re such a drama queen
I’m going to agree with HD in some respects. Prudence is key. I think people buying a home should have at least 1 year of mortgage payments and real estate taxes, and 1 year of living expenses saved up, in addition to the down payment or closing costs. This will allow you to weather the storm and survive when all goes wrong in your world.
“Theres nothing wrong with a healthy amount of caution/fear”
you needed to put healthy in quote marks and that statement!
” think people buying a home should have at least 1 year of mortgage payments and real estate taxes, and 1 year of living expenses saved up, in addition to the down payment or closing costs.”
So, to buy a $200k house (average metro area house, easily supportably on an average metro HH income), one should have $70k+ saved before buying? That’s *really* conservative.
“Theres nothing wrong with a healthy amount of caution/fear. It’s called prudence. Ever heard of it?”
Yes. See http://query.nytimes.com/mem/archive-free/pdf?_r=1&res=9F0CE5DB133AE63BBC4A52DFB467838D669FDE (may take a while to load)
I’m not saying you shouldn’t take risks, it’s just that buying a home used to be such a huge ordeal, and it required a down payment and reserves and 2 years w-2s and you couldn’t qualify for a mortgage even a penny more than the guidelines. And consequently the default rate was less than 1%, of which most of those were from illness, death or divorce.
During the boom the zero down created the exact opposite. Somebody’s car would break down and they had to choose between fixing the car or paying the mortgage. Or the dog got sick and required a large vet bill and that meant missing half a month’s mortgage payment. If you’re buying something so expensive and so valuable, you should at least have the capabilities to make payments for a short period of time when life strikes (unemployment, pregnancy, illness, etc). SO many people are on the edge, and then when something happens (it inevitably does), they come into my office. For every 20 something internet millionaire in LP there’s 10 families struggling on the edge in Portgage Park or Mt. Prospect, just trying to make it day by day. it’s very cultural for some people to wait until the very last minute to even consider BK as an option and that just makes things worse for them.
“I’m not saying you shouldn’t take risks, it’s just that buying a home used to be such a huge ordeal
…
During the boom the zero down created the exact opposite.”
So, Groove’s friends who bought recently were not somewhere in between? Just b/c they are allocating more to housing than you would, living in a situation you would not and in a neighborhood you would not? So, bascially, anyone who is not at least as prudent as HD is reckless. Got it.*
*actually, got that a loooong time ago.
I never once used the word reckless. I said I would raise an eyebrow.
“So, bascially, anyone who is not at least as prudent as HD is reckless”
You won’t build wealth in real estate these days as an average homeowner. You build wealth by saving, especially in 401k and Roth IRA’s. So many people thought you could get rich on buying a home, that it became similar to a ponzi scheme in some areas, and then there was an incredible fall. Wow. At least if you have saved, you won’t lose everything.
Um… home buying is still a big deal…
And back in my day I had to tredge through 3 feet of snow uphill both ways to get to work
“And back in my day I had to tredge through 3 feet of snow uphill both ways to get to work”
And that was July. You should have seen January!
If it was the choice between renting and contributing the max $16,500 to your 401k and $5,000 to your Roth IRA, and not being able to contribute much at all to your retirement accounts due to the spread between renting and buying (high monthly cost of buying), I’d rather rent for a while longer. Not saving enough now will cause more than enough headaches in 25-30 years when it’s time to retire for most of the current first time buyers. I don’t want to be working when I’m 70 like most of my peers will be.
Or you could save for retirement and have a house…
how are you saving that much into your 401k AND qualifying for a ROTH? do you have zero fun?
It’s pretty easy. Also your pre-tax 401k reduces your income that goes into the Roth IRA maximum income calculation. In addition, you can contribute to a regular IRA this year and then convert it immediately to a Roth.
“how are you saving that much into your 401k AND qualifying for a ROTH? do you have zero fun?”
$100k – $21,500 = $78.5 taxable = ~$4600/month, after withholding, but before insurance, etc. for a single.
Seems like enough money to have more than zero fun.
I heard someone say that the thing that will be so devastating about this depression isn’t the depth of it all, but the length.
“I heard someone say that the thing that will be so devastating about this depression isn’t the depth of it all, but the length.”
I heard someone say the world is going to end in 2012, too.
Without any context for the speaker’s track-record on predictions, it’s akin to taking investment advice from knuckleheads who post in comment threads on the internet.
Groove: actually I’m ok with your friend’s decision. I’d find it tough to rent w/ kids and have no problems with an inlaw apartment rented out.
To be fair to HD, I was the one who introduced the term reckless into the conversation, mainly as a way to poke fun. “Reckless negligence” is a phrase that drives certain legal friends of mine nuts.
“Groove: actually I’m ok with your friend’s decision”
secretly i am unhappy with it, cause i know that hood has been declining (not value wise but quality and living wise) before the bubble and after it is just continuing
I wish HGTV would stop rebroadcasting their older shows where first time buyers put nothing down, get their closing costs paid for by the seller, or get 80/20 mortgages.
“To be fair to HD, I was the one who introduced the term reckless into the conversation”
Oh, I know. But that’s my takeaway independent of you.
“secretly i am unhappy with it, cause i know that hood has been declining ”
Yeah, that’s a separate issue from what I’ve been focused on.
“$100k – $21,500 = $78.5 taxable = ~$4600/month, after withholding, but before insurance, etc. for a single.”
Yay anon(tfo) made a mistake! Roth contribution is after tax dollars, so its more like [100k – 16.5k – (5k/(1-t)]. Still easily doable at 100k, even doable at 80k.
“Yay anon(tfo) made a mistake!”
as Sonies would say, I’m not some tax accountant. And that ~ makes the extra $100 okay–hell, it’s a lot less difference than the $265/month even HD thinks is no big deal.
its always a big deal!
“its always a big deal!”
Nah. It’s basically the same thing and isn’t going to break anyone’s budget.
And because it’s no big deal, I’ll expect to start seeing checks from Dan and HD, bc I clearly need that money more than they do.
OH yeah I forgot your AGI is lowered by traditional 401k contributions. I use my company’s Roth 401k
“I use my company’s Roth 401k”
You don’t know how lucky you are to have that. Not only does it mean you can contribute more than others (16.5k after tax plus 5k Roth after tax = 21.5k after tax), but you’re money is a LOT safer than regular 401ks which middle class Americans don’t seem to realize their marginal tax rates are going to have to go up in the future.
“Americans don’t seem to realize their marginal tax rates are going to have to go up in the future”
And what–exactly–will stop the Feds from taxing Roth gains? Easy enough to change the gain from excluded to included in income.
“Easy enough to change the gain from excluded to included in income.”
They have never done this before and this would be hitting a hornets nest with a stick with regard to these retirement plans.
Can they change the rules mid-stream? It might be possible but their adoption is so widespread its my guess that any politician that does this will be voted out.
“They have never done this before and this would be hitting a hornets nest with a stick with regard to these retirement plans.”
They’ve never changed the defintion of “income” before? Are you sure?
They’ve also never cut Social Security or Medicare before. Do you really expect that that will not happen, either?
“And what–exactly–will stop the Feds from taxing Roth gains? Easy enough to change the gain from excluded to included in income.”
the money has been taxed already, isn’t there some rule about double taxation in the constitution?
“the money has been taxed already, isn’t there some rule about double taxation in the constitution?”
Short Answer: no.
And if there was they could always amend the constitution.
My strategy is to go 50/50 is to use my companies 401k and I have a Roth on my own.
I split my 401k contribution between the Roth 401k and pre-tax 401k for tax diversification.
It’s amazing the lack of retirement savings that people in the 25-35 crowd are doing. Maybe because they all got the housing bug and bought a place they could barely afford, and now the value has dropped below their mortgage balance. They didn’t contribute much at all to their 401k and have no Roth IRA. Brilliant way to get rich, truly brilliant.
I barely pay any taxes as it is so i’m doing as much roth as I can, while I still can…
And I read somewhere that 90% of people have unsuccessful retirements? Damn that sucks… I sure as hell don’t want to be working at some crappy job when i’m 70+
just a tid bit before i leave,
I have noticed at our company (plus our subsid’s and other ownerships) once we stopped the matching due to budget constraints that overall contributions dropped dramatically. also when bonuses were cut and furlough days added we saw a huge spike in 401k loans.
take what you will from that but the trend from where i am at shows a lot about avreage Joe’s thought process.
“It’s amazing the lack of retirement savings that people in the 25-35 crowd are doing.”
Well honestly people in this crowd really got the short end of the generational stick. The baby boomers got the posh jobs and aren’t really retiring and with companies cost cutting for every boomer retirement you can expect there won’t be a 1:1 ratio of high paying replacement jobs. Maybe 1:0.8.
And as evidenced by the financial crisis when every bank was seemingly holding hands to jump off the cliff together the government stepped in to bail them out.
So it stands to reason if the majority of Americans are unprepared for retirement the government will step in and bail them out too. No way are they going to let tens of millions of Americans in retirement eat cat food.
I guess I feel even better about contributing the maximum as others’ contributions are declining. My relative wealth when I retire will be more compared to these people.
“I sure as hell don’t want to be working at some crappy job when i’m 70+”
The current social security system makes it virtually impossible you’ll be working at a full time crappy job when you’re 70+. You’re going to either remain working in your high income job or be paid 75%+ of what you’d make at Wal-Mart to just stay home and watch the Price is Right.
The only reason you see elderly Wal-Mart greeters is I think the first 12k in income or some low threshold around there doesn’t take a penalty to their SS benefits.
“I think the first 12k in income or some low threshold around there doesn’t take a penalty to their SS benefits.”
It’s $14k and change, but only for those collective SS before full retirement age.
From the SS faqs: “If you work and are full retirement age [66 for those born in 43-55] or older, you may keep all of your benefits, no matter how much you earn.”
not only that, but in Illinois they get a free bus/train pass!
awesome, lets kill all the old people to solve our budget woes
What I was pointing out with Groove’s friends was more that I really HOPE they have something saved to cover an unpleasant surprise, and I agree with some others here that they’re really pushing the numbers. It’s just not sensible to count on having TWO incomes always being there, and living as if they always will be. I’d be curious how long they’d make it on one income given their current setup.
The Boyfriend and I both own a home. We’ve been thinking a bit about a merger. But there’s no way in hell we’d buy the most expensive home that our joined salaries could afford. We’ll probably go with one more bedroom than either of us have, maybe a little more room in a basement, and a 2 car garage instead of one. But it would be insane to simply double our expenses, and say “hell, if one of us can afford $X a month, TWO of us can afford $2X a month!”. Maybe that’s very old-school of me, but living paycheck to paycheck, or a job loss away from having it all fall apart is not how I could sleep soundly every night.
Every so often the subject of government takeover of IRAs and conversion into annuity contracts, gets some press. The comments section of this article show how controversial the idea is, but at this point I wouldn’t dismiss it out of hand.
http://www.investors.com/NewsAndAnalysis/Article.aspx?id=521423
“I guess I feel even better about contributing the maximum as others’ contributions are declining. My relative wealth when I retire will be more compared to these people.”
anon:
From the SS faqs: “If you work and are full retirement age [66 for those born in 43-55] or older, you may keep all of your benefits, no matter how much you earn.”
Anon, you are mixing up benefits with taxes. Before full retirement age you can lose one out of every two or three dollars if you earn above a certain amount. If you earn above a certain amount after full retirement age you can be taxed on part of your SS. up to 85%.
“awesome, lets kill all the old people to solve our budget woes”
sonies there is still some ice we can do like the eskimo’s do, drift them off 🙂
“What I was pointing out with Groove’s friends was more that I really HOPE they have something saved to cover an unpleasant surprise”
I hope they do too, i did know the DP was saved up, no “gift” or inheritance. and as of yet from the ccrd it looks like around a 25% DP with no second.
i do wonder if he used up all his reserves on the DP?
“Anon, you are mixing up benefits with taxes.”
No, I’m not. I was responding to this (as quoted in my response):
“I think the first 12k in income or some low threshold around there doesn’t take a penalty to their SS benefits.”
which sez “penalty”, which taxes are not.
CONTINGENT!
Just in time for the extended homebuyers tax credit.
“It doesn’t matter if they rent to a friend or a stranger or a family member, they’re getting help with the mortgage – and they have people living in their basement. ”
I have heard of such people: where I come from where real estate is more appropriately priced relative to incomes they call these people who live in these other rooms or basements relatives.