Disaster Planning and Debt...

[Mij]

Your county auditor does not have to see your home sell, he/she can use what realtors use….Comps. Or comparable homes in that neighborhood. Indianas tax values are capped by law, so they can only rise so much in a given tax year.

Things are going to go bust I agree, but it won’t be only the housing mrkt.

 

[Ingomike]

I think the housing market bubble will pop, but what gives me pause about that is where are all the buyers coming from to generate 10, 20, and even 30 offers on a single house? The economists say we are in a housing shortage for both rentals and owner occupied and the number of applicants for rentals and offers for homes for sale is unreal.

 

[dudley0]

The crazy buying is starting to slow down in my area a bit. People are still paying way more than the house is worth, but the bidding wars have almost stopped. More places are staying on the market now. Especially the low end and high end houses.

People are starting to get scared, I think, about the rising interest rates, the high gas prices and the shortages they are seeing. I am even seeing slowdowns in the rental market. I used to get four or five calls a week easily just seeing if I had anything open. That has dwindled down to maybe one. Lots more spam calls tho.

One young couple bought a house and moved out. They are good kids, but they jumped too soon. Bought a junk house for way more than it is worth. Already complaining about stuff and they hadn't moved in yet. Popped out their first kid and just ran for any house they could get. It is sad really. I have rented to four generations of this family so far. I tried to help, but they just wouldn't listen to common sense.

Not to be a vulture, but I did a cash out refi on some places and will keep some of that for good deals that will come around in maybe a year.

 

[BehindBlueI's]

I think the housing market bubble will pop, but what gives me pause about that is where are all the buyers coming from to generate 10, 20, and even 30 offers on a single house? The economists say we are in a housing shortage for both rentals and owner occupied and the number of applicants for rentals and offers for homes for sale is unreal.

REITs and corporate buyers, maybe?

 

[dudley0]

Corporate buyers are a big thing, but not usually hitting the small towns. Not enough margin because the competition is lower. (Opinion)

I do think that the corporate buyers will ruin it for mom and pop operations like mine. They come in with typically higher rents and ala carte add-ons that are just ridiculous to me. But they get them in the big cities.

It just takes one person or entity to get something started and then they make it the norm.

 

[Ingomike]

REITs and corporate buyers, maybe?

I have heard directly from local title companies that near 20% of all closings are some corporate entity. Some SFH neighborhoods are 75% rentals,..

 

[doddg]

Enjoyed reading this thread about a subject dear to my heart: being debt free!
When I taught Economics in H.S. I always hammered away about living debt free.
I emphasized that 2 places that are a need where most people make a mistake is buying what they can "afford" instead of buying less:
- car
- house
I taught them never to let the salesman tell you how much car or house you can afford.
I've found that most never do this.

I was forced to learn this early on b/c I had to live frugally b/c I spent the 1st 10 yrs out of college working at a Christian School out of state & finally after 10 yrs had to leave b/c the salary was not sustainable even with working weekends & summers after the children came.

I remember when we finally got the house paid off during my 50s & feeling rich!
Even now, with a small teacher's pension & SS, b/c of being debt free, I feel rich!

I found out early in the marriage that I'd rather:
- have "nothing" but owe nothing
than to
- have "everything" but owe everything.

The wife was onboard so it made the journey tolerable.
We both came from parents who were raised during the depression & were taught accordingly.
My son is more extreme than I am & has a better income & will have his house paid off in his mid 30s.
The daughter, not so much, haha!

 

[Mij]

doddg; I can’t begin to state how much growing up with parents and grandparents that lived through the Great Depression has influenced my life. The young folks today need some of that practicality.

In my old guy stuff I still have some rationing chips, and booklets of stamps. WW II stuff from dad n gramps. Gas….Even at 5 bucks a gallon at least you can still buy it.

 

[spencer rifle]

The wife was onboard so it made the journey tolerable.
We both came from parents who were raised during the depression & were taught accordingly.
My son is more extreme than I am & has a better income & will have his house paid off in his mid 30s.
The daughter, not so much, haha!

Same here. The oldest owns his own house outright, and has improved it enough to double it's value. Has a big garden, a well-paying profession he enjoys, and an IRA.
Second oldest is making more than she can spend in online education and supplements with hand-made pottery. Lives very close to the oldest and they help each other out. Also has an IRA already. They live inexpensively and the biggest problem at present is getting all that money out of the checking account into something that pays interest/dividends.
The third oldest is in CA, so has more trouble saving, but has learned to do her own car repair, and has been trained to live frugally. Raises plants and vegetables on her apartment porch, drives a moped.
The youngest has a large 529, but has no plans for it at present, since he's working a various scout camps, and has his precision machining/CNC certificates, so he could work about anywhere. But sailing is his first love.
SWMBO is often sad that they don't live closer, but when you train them to be independent and go for their best life, you shouldn't be surprised when they do just that.
It is a double relief to be debt-free and not have to worry about the kids' welfare.

 

[nprecon]

Same here. The oldest owns his own house outright, and has improved it enough to double it's value. Has a big garden, a well-paying profession he enjoys, and an IRA.
Second oldest is making more than she can spend in online education and supplements with hand-made pottery. Lives very close to the oldest and they help each other out. Also has an IRA already. They live inexpensively and the biggest problem at present is getting all that money out of the checking account into something that pays interest/dividends.
The third oldest is in CA, so has more trouble saving, but has learned to do her own car repair, and has been trained to live frugally. Raises plants and vegetables on her apartment porch, drives a moped.
The youngest has a large 529, but has no plans for it at present, since he's working a various scout camps, and has his precision machining/CNC certificates, so he could work about anywhere. But sailing is his first love.
SWMBO is often sad that they don't live closer, but when you train them to be independent and go for their best life, you shouldn't be surprised when they do just that.
It is a double relief to be debt-free and not have to worry about the kids' welfare.

That is no accident either. Raise and teach your children well and they have better tools to navigate through life. One of the root causes of the problems within our nation, particulalry the larger cities is the disolution of the American family with two caring parents to raise their children. Far too many kids grow up without a solid family unit. They are easilky and quickly suaded by the media and sparklies dangled in front of them.

 

[nprecon]

Entering into massive debt is, in reality, enslaving ourselves to others.

 

[doddg]

Entering into massive debt is, in reality, enslaving ourselves to others.

I've already responded to this thread, but it is so dear to my heart!
Short version to my too long & chatty post:
Interest is EVIL!!!

Personally, operating debt-free (or mostly), is singularly at the top of the list of life's rules to live by, only surpassed by pursuing God like your life depends on it.
Sorry, Sunday am & can't help "plugging" God, haha!

I can't believe how simple, but difficult, it is to live financially free by simply ALMOST NEVER buying anything on credit but pay for whatever on the spot.
But hardly anyone does it.
Interest is so sneaky & devastating & can become a significant amount of one's monthly living expense.
Everyone has finally learned that when you buy a $200,000 house, you pay $600,000 back with interest rates I grew up with.
Paying $100/month interest in your payment on a loan of 6% is not uncommon (been there just 12 yrs ago & paid car off in a year b/c of that).
Buying a house is an exception & car early on.
But, the generation of buying a fixer-upper & having sweat equity in it is not on most young people's radar, unless they are flipping it.
Remember the days when we all drove a car/truck with some rust on it b/c it worked just fine, haha!

Using a credit card & paying it off when you get the monthly bill is fine, if you are disciplined enough not to get sucked in to paying interest, of course.

I now can barely remember the pain in my 20s (late 1970s, early 1980s) of carrying cash all the time & using it to pay for everything.
I was the last person on Earth to buy a new b/w TV (Zenith $119 in late 1970s) to save money when first married b/c a color TV was $400, haha!
Taking money out of your billfold & paying upfront is a reality check & brake to keep spending $$ under check.

A lesson early on:
In the late 1980s, I was getting ready to buy a washer & dryer with a down payment for 10% interest.
I asked if I could just finance the whole thing w/o a down payment & they said, yes.
I had enough sense to ask to see the paperwork before I signed & saw the interest rate had gone from 10% to a 26% per annum interest rate, which they tried to hide using the lower "monthly" interest rate.
I got up & walked out, totally shocked at the cost of borrowing money, as I was learning this process.

 

[Magyars]

I believe every family has a few of these in its group.
We were talking about those beautiful kids just yesterday. It makes us very sad that a parent can weaponize a child for their personal gain.

I feel for you. Due to circumstances beyond our control our oldest son, his wife and three grandchildren are not a part of our life. It's a sad situation....

 

[churchmouse]

I feel for you. Due to circumstances beyond our control our oldest son, his wife and three grandchildren are not a part of our life. It's a sad situation....

And the pain is a daily thing. Not only for the children who do not understand but for the son/daughter that thinks this way.

 

[Mij]

doddg, plug away, if the rules allow. It’s Sunday. My day of rest.

 

[MatthewH]

This will probably be long winded.. but this is one of those things that I keep coming back to as I grow my preps.
We're lucky to not have any debt besides our home but I really struggle with how much cash I should keep in the banks and ready to pay bills etc.. when tomorrow we could be in full blown SHTF and the last thing on our minds is owing Best Buy or Aaron's or some ****.
It sounds like your already budgeting clearly so I would extrapolate that to be able to afford monthly prep purchases. Wether that's food or ammo or chickens or whatever. But I would not necessarily make an over exerted effort towards paying off a car or something. Maybe I am looking at it from a bad lense but if everybody is strugglimg for food or if grids go down I doubt they'll be knocking on our doors.

 

[snapping turtle]

But I would not necessarily make an over exerted effort towards paying off a car or something. Maybe I am looking at it from a bad lense but if everybody is strugglimg for food or if grids go down I doubt they'll be knocking on our doors.

I have been stocking things up for the future where normally I would be paying down debt. The interest rates are modest (no credit card debt) house payment and two car loans).

With what I have put back since Covid hitand am now using I have more than made up for it in intrest. Example : I bought a firman 9400 watt gas/propane/nat gas generator at Costco in 2020. 499 on sale shipped to the house. Current Costco price tag same generator was 799. I have never even taken it out of the box. (This was maybe a bad example) example two: I bought all the parts I can think of for our daily drivers and when I went to get a new air filter (cabin I forgot that one) all are 30 precent higher than when I bought them. I see this on everything and the wife encouraged me to get the stuff we would need to thrive in the future not just survive.

Put away stuff you are going to use (it might be late now to get the returns on investment I got)

If we are just dealing with inflation like the 1970’s 1980’s then I will be paying for what I got cheaper now with inflated money. We will not be making major purchases. I have replaced the windows a new HVAC system crawl space French drain outside French drain.

My phone I am typing this on is 4 years old. My daily driver (paid off since 2017) is a 2009 my SUV (my one Un needed expense man toy) is a 2008 and will be paid for Dec 2023.

Job looks steady. 25-30k in savings for a slush fund. I need a garage but I will built that myself.

Good luck with you plan. Make one and stick to it.adjust your ooda loop as needed. If you observe prices will be declining oriente to save up or pay down decide what needs to be done and act on it.