Rough Housing Math

Since I last posted (yesterday), a few more promising houses have been listed and received offers. Oh well. The question at hand: how can Frugal Son--even with help from Mom and Dad--pay for a house? Here's my rough math: tell me what I'm neglecting to take into account.

Frugal Son is ALREADY paying $600/month for a tiny, shared apartment. He had to find an apartment PRONTO when he got a job. Still, he's in a nice neighborhood, so he wouldn't save much by moving to another apartment.

The realtor suggested that Mr FS and I--with our good credit--take out a mortgage and then SELL THE HOUSE to Frugal Son. We can get a lower rate.

Let's say the house is $300,000. Forget the downpayment. At current rates, the cost for a 30 year mortgage would be around $1200/month. Add about $400 for property tax and insurance...and we are up to $1600.

Frugal Son is currently paying $600 for half of a 600 square foot apartment. If he rented a bedroom in his house to a friend for the same $600, he would be on the hook for $1000.

1. Frugal Son said he could swing that, if necessary.
2. Frugal Son will be making more money soon, probably. He is working on his teaching certification.
3. We're committed to gifting Frugal Son the amount we saved for his education, which we didn't use, owing to massive scholarships. So, if we gifted him the $400/month difference between his current rent and the mortgage on his new abode, we could help him for AT LEAST 100 months.

Now people had these fantasy scenarios during the housing bubble with disastrous results. So to consider possible disasters.
1. Does Frugal Son need a roommate? Yes, but it's not absolutely essential, especially if his house is under $300,000 in the example.
2. Can we help out if roommie doesn't appear or work out? Yes.
3. What if Mr FS and I lose our jobs? We ARE tenured, but I've run some firecalc* scenarios, and we can survive a frugal retirement even if we were both fired.
4. What if Frugal Son loses HIS job? Well, he can make just as much by being a substitute teacher.

What is ALL OF THE ABOVE OCCUR SIMULTANEOUSLY? We have that education fund safety net.

*Firecalc: the best retirement simulator I've ever seen. Check it out!

Am I missing anything here?

Further Housing Bubble Notes: Open Houses

We went to two hastily-called Open Houses yesterday. Hastily-called because a house listed two days ago already had offers THE NEXT DAY. That was the little skinny shotgun house we liked. It looked just as nice in person. The neighborhood is--as they say--in transition.

Then, to make the unexpected drive right after work (car trunk loaded with papers to grade) worthwhile, we looked at another house, very very nicely renovated, also in an up-and-coming neighborhood. (See? I am learning the lingo). The house inside is nicer than in the pictures. Note the lovely garden behind. And see if you can figure out the layout. This was a classic New Orleans double shotgun that was made into a single. Our realtor thinks this will get competing offers and go higher than the asking price. Actually, he thinks the same of the first one.

I, of course, was totally enamored of both houses, even though they are very different. I think I have the thrift store buy-it-now mentality, which says, there's only ONE of this item! The broker told me to calm down (don't worry--it takes a lot to make the pathologically frugal sign on the dotted line. Not to mention Mr FS was there, smiling in an understanding way. When the broker tells you to calm down, you know you're getting a little crazy.)

Now we know--a teeny bit better--what is out there. You may ask: how can two English teachers think to help their in-transition son buy such $$$$$ houses? I ask too. I like numbers, but even I can hardly believe in this possibility. But the math works out. I will do some rough math tomorrow.

Beautiful New Orleans

Where even a young fellow, with a little backing from Mom and Dad, can consider a house like this.

Real Estate Bubble Part 2: Seems to be a Bubble

Duchesse wisely counseled in a comment: go to open houses. That would be great. So far, though, the houses that look intriguing are UNDER CONTRACT within a few days. Seriously. What open houses? For those of you who've been through a housing bubble: is this what a bubble looks like?

I can feel the bubble metabolism: HURRY! HURRY! BEFORE IT'S TOOOOOO LATE.

A New Housing Bubble? Or Is It Just Here?

I wrote a little while ago about helping Frugal Son buy a house. We are not experts on the process, having bought just one house. We still love the house, but--neophytes that we were--we were manipulated by everyone involved. A horrible experience, with many shady operators.

An acquaintance--the former head of the public library here--brought over her friend and neighbor, a very nice guy. I guess he will do as well as anyone. We haven't actually looked at anything. That is because the houses we are interested in seem to be selling in a matter of days. DAYS. So the agent calls the listing agent--and the house is already under contract.

Is this a new bubble brewing? Any advice on how to keep our heads would be much appreciated.

Declutter Progress

This is probably the first and last time I'm doing this, but....I packed away a bunch of Frugal Son's stuff. His apartment is tiny and has no storage space, so I don't mind doing this for a while. I now have a shelf on which to to "stage" things.

What I staged: stuff for Buffalo Exchange, stuff for fancy on-line consignment store, books for Amazon credit.

Buffalo Exchange: This is a bit of a game for Miss Em and me. She loves getting credit.
Rodeo Drive Resale: Where I send a few pieces of St John stuff I never got around to wearing.
Amazon: Hey, even $2-$3 adds up when you have a bunch!

I also donated three more bags to the Food Bank Thrift. According to Feng Shui--at least the popularized version whose popularity seems to have faded somewhat--getting rid of stuff will unleash energy through your home. I haven't felt it yet, so I suppose that means I need to get rid of MORE. Off to mail the boxes to Rodeo and to Amazon. Uh oh: I mail from Office Depot, which is right across the street from Goodwill. Wish me strength.

Don't Be Jealous!: Appeasing the Thrift Store Gods

A few readers expressed a wee bit of jealousy over my thrift store finds of last Thursday. It was--as they say in the blog shopping world--quite a haul. One day, I might muse on WHY the thrift store pickings are so good in my little town (pop 8500), not to mention cheap. But, believe me, readers it is a mixed blessing. HAUL is the operative word, especially for one who lives in a smallish house, circa 1910, with little closet space.

Three of our four family members are disorganized clutterbugs. I realized this anew when I was trying to clean out Frugal Son's former closet (now general use, though with some of his stuff remaining). I won't go into the not-too-safe item I found or the family memento I thought I lost--at least not now. But I made a panicky call to Miss Em (the organized one) and she said "I am really getting sick of these constant emergencies. I will help you when I get home."

SO the clutter: that is why good and cheap thrift stores are a mixed blessing. There is always something else...and it is always cheap enough to buy.

SO I will appease the thrift store gods. After all, I have to admit I still want to find nice stuff. But the outgo basket needs to be a lot bigger than it has been.

SO yesterday, before the emergency that precipitated my call to Miss Em, I donated several biggish bags to the Food Bank Thrift--called All Saints. Today, I will make a return visit with some more bags.

If I were an organized blogger-type, I would make a vow to declutter and post my progress. That's not going to happen: wish me luck anyway. Facing the scorn of Miss Em is a scary prospect. Ask me how I know.