The house
About a year or so ago I went through a certain degree of soul searching and quiet desperation over the fact that my parents are selling the house I grew up in and moving to Whyoming. The issue is, should I try to buy my parents out and keep the home for myself and my posterity? There are a lot of details and I'll save you most of them but I spent a little time on the fence over the whole issue, eventually climbed down and thought, as should be the case, that that was the end of it - house shmouse. Nothing has really changed since. All of the reasons why I shouldn't buy this house are still as valid as ever.
Fast forward to B-Day 2008. My mom called me to wish me happy birthday. In the course of the conversation, I asked her about the house, more out of curiosity than anything else, and eventually caught on that there really aren't any buyers. I'm surprised and I'm not. I'm surprised because they've passed up several generous offers in the not too distant past. I'm not surprised because the housing crisis, recession, or whatever you want to call it, perceived or real, has created a buyer's market apparently even in luxury areas like Lake Tahoe. I'm also not surprised because unlike most of you, I've seen the house. More on this later. This wasn't really that apparent to me, living on the other side of the Atlantic, in spite of the headlines on Yahoo news every day. Either way, I'm thinking that my father, to the extent that he's ever admitted he's been wrong about anything, is kicking his own 200lb. ass right now. The part of me that's genuinely mean (not a very big part of me) relishes that image with sadistic glee.
Now I find myself at the biggest quandary of my life so far. I climbed back up on that fence. Remember the labor pains I went through deciding if I could justify buying a macbook? Now we're talking about hundreds of thousands of dollars and the money isn't even the hard part! I'm making myself crazy over this thing. No one can really tell me what to do. The MSU and I are both riding the fence now and the stakes are high either way.
Some of this I've already covered in past posts:
My Dad and his loan:
To say that my dad can't handle money is a little like saying that the surface of the sun is uncomfortably warm. He made one, tremendous, accidental investment in his life when he bought an old house in Tahoe when I was still shittin' yellah. Unlike most of our neighbors, he let entropy take its course on the old house. I'll even wager to say that he helped it along a little. I should be fair, he did a few things. I can think of one anyway: he changed the roof. But even in spite of an irresistible force like my father, the value of the property increased 10 to 20 fold in 30 years. It was enough for them to take out one of the worst kind of mortgages on the place, buy a decent house in Whyoming, and have a hundred grand or so to blow. And I guess that's exactly what they did with it, they blew it. The stipulation, of course, was that they needed to sell the house in Tahoe fairly quickly afterward to pay off the mortgage and the presumption was that they'd get another couple hundred thousand out of the deal to, well, blow. That hasn't happened. Times have changed. Sometimes times change rapidly.
You can usually trust a duck to be a duck. I can usually trust my dad to be my dad. True enough to form, he got what he wanted, his eutopia-sicle near broke-dick ridge or whatever and all he wants from North Lake Tahoe is North Lake Tahoe in the rear view mirror of his F-350. I know him well enough to know that every mortgage payment he makes is, in his eyes, ammunition and beany weenie money down the tubes. As amazing as this would seem to most people with a room temperature I.Q, I think my dad would just as soon let the bank foreclose on the hovel in Tahoe, his credit record be damned, turn tail and head north and never look back again.
Me:
So this is where I come in. I could, in theory, bail them out. The tentative deal, not yet cleared through my father, is I bail them out plus 25 grand. Then, I take out a loan and begin paying for the rest of my natural born life. The house in which I learned to weld, experimented with gunpowder, ate lead fishing sinkers, probably had a least some exposure to asbestos, and yoinked my dad's Marlboro's becomes mine. From a distance. I live in France and will for the foreseeable future. That, in itself, creates most of the real complications.
The house:
Should probably be torn down. The siding is made of asbestos. I don't know about the ceilings. They stopped making the kind of wood paneling that adorns the ground floor walls because it's a fire hazard. I don't know about the insulation. I think the floor may be rotting out in places, especially the bathrooms which needed to be completely redone when I was a child, it's plain frightening now. I could go on an on, but I'll just summarize thusly: At a minimum, all of the siding on the main house must be changed. Both bathrooms and the kitchen must be totally redone. The ceiling may need to come out and be replaced. All flooring materials must be replaced and in some cases the floors are in need of repair. All vertical surfaces must be replaced and / or painted. That's just the minimum to make it livable, that's not even making improvements, and that's only if there isn't some other major problem that I'm not even aware of! I could go on and on about what's going through my head on this line of thinking but I won't. That just gives you an idea. I think you'd have to look hard to find a crack house in worse shape.
I shouldn't buy and here's why:
It's a dump. It's a dump that will cost a small fortune. I can afford to buy it; barely, but that's all I can afford as a responsible human being. I can't afford to put any money into fixing it up at least not much, at least not right away. Even if I could afford to fix it up, I'm in a position where I can't do any of the work myself and I can't even be there to supervise any work I have done by contractor. I would have to have total confidence in anyone who represents me. As if I knew nothing of human nature. I'm a trusting soul, but I'm not an idiot and I'm not rich enough to take chances. I actually have no idea what any of this work is going to cost. Except the asbestos siding. I made a few calls and I've got and idea of what that liability will set me back. I can only even be there one month every two years. As it is right now, I can't even see staying in it much less renting it out. People who have enough money to rent a place in Tahoe to spend their vacations wouldn't set foot in this house the way it is. It's a 13 hour, minimum $1000 flight from France. There are five of us. We won't be coming to visit very often. On the flip-side, the east coast is only eight hours away from France and tickets sometimes run as little as $600. The housing shlump is taking effect on the east coast too and places like the Carolinas or D.C. or Virginia beach may be as nice, in many ways, as Tahoe. Lastly, it's California. The land of fruits and nuts. I hate the CHP. I hate the franchise tax board. California has, what, 8% sales tax? Plus one of the highest state income taxes, the most draconian automobile registration regulations and fees, and Tahoites are divided evenly between irresponsible, maggot-infested dope-smoking neo-hippies and the most arrogant, ego-centric neo-aristocrats in America.
Why I should buy it (count the "if"s)
I know Tahoe, I love it there and I'm comfortable there. It's home. I know it intimately. I know the house intimately too Ifnothing major has changed. If I understand the tax laws under proposition 13, and If my parents, for legal purposes anyway, "give" me the house (sign over the title to me), I'll pay less than half of the property taxes that I'd pay If they weren't my parents. That's the main kicker. Were it not for that fact, I think I'd just forget it. If it were suitable for human habitation, I could rent it to vacationers, reserving one month every two years for myself. If I had the money to fix it up, it would probably be a good investment, If the U.S. economy recovers instead of getting worse. Renting it would help me make the payments in the months when it would rent (peak summer and peak winter in nice, snowy, years). This would also solve the problem of where I go when I'm on vacation in the U.S. It's the largest lot on the block and it's not beach front property but it's the next best thing. If you had a really good arm, you could almost throw a rock in the lake from their front porch. It could be a very very nice place If it were fixed up. I'll go as far as to say that government working slobs like me don't own houses in Lake Tahoe, certainly not in that kind of location, certainly not as nice as this one could be If I had my way with it.
Too be continued I'm sure....
Fast forward to B-Day 2008. My mom called me to wish me happy birthday. In the course of the conversation, I asked her about the house, more out of curiosity than anything else, and eventually caught on that there really aren't any buyers. I'm surprised and I'm not. I'm surprised because they've passed up several generous offers in the not too distant past. I'm not surprised because the housing crisis, recession, or whatever you want to call it, perceived or real, has created a buyer's market apparently even in luxury areas like Lake Tahoe. I'm also not surprised because unlike most of you, I've seen the house. More on this later. This wasn't really that apparent to me, living on the other side of the Atlantic, in spite of the headlines on Yahoo news every day. Either way, I'm thinking that my father, to the extent that he's ever admitted he's been wrong about anything, is kicking his own 200lb. ass right now. The part of me that's genuinely mean (not a very big part of me) relishes that image with sadistic glee.
Now I find myself at the biggest quandary of my life so far. I climbed back up on that fence. Remember the labor pains I went through deciding if I could justify buying a macbook? Now we're talking about hundreds of thousands of dollars and the money isn't even the hard part! I'm making myself crazy over this thing. No one can really tell me what to do. The MSU and I are both riding the fence now and the stakes are high either way.
Some of this I've already covered in past posts:
My Dad and his loan:
To say that my dad can't handle money is a little like saying that the surface of the sun is uncomfortably warm. He made one, tremendous, accidental investment in his life when he bought an old house in Tahoe when I was still shittin' yellah. Unlike most of our neighbors, he let entropy take its course on the old house. I'll even wager to say that he helped it along a little. I should be fair, he did a few things. I can think of one anyway: he changed the roof. But even in spite of an irresistible force like my father, the value of the property increased 10 to 20 fold in 30 years. It was enough for them to take out one of the worst kind of mortgages on the place, buy a decent house in Whyoming, and have a hundred grand or so to blow. And I guess that's exactly what they did with it, they blew it. The stipulation, of course, was that they needed to sell the house in Tahoe fairly quickly afterward to pay off the mortgage and the presumption was that they'd get another couple hundred thousand out of the deal to, well, blow. That hasn't happened. Times have changed. Sometimes times change rapidly.
You can usually trust a duck to be a duck. I can usually trust my dad to be my dad. True enough to form, he got what he wanted, his eutopia-sicle near broke-dick ridge or whatever and all he wants from North Lake Tahoe is North Lake Tahoe in the rear view mirror of his F-350. I know him well enough to know that every mortgage payment he makes is, in his eyes, ammunition and beany weenie money down the tubes. As amazing as this would seem to most people with a room temperature I.Q, I think my dad would just as soon let the bank foreclose on the hovel in Tahoe, his credit record be damned, turn tail and head north and never look back again.
Me:
So this is where I come in. I could, in theory, bail them out. The tentative deal, not yet cleared through my father, is I bail them out plus 25 grand. Then, I take out a loan and begin paying for the rest of my natural born life. The house in which I learned to weld, experimented with gunpowder, ate lead fishing sinkers, probably had a least some exposure to asbestos, and yoinked my dad's Marlboro's becomes mine. From a distance. I live in France and will for the foreseeable future. That, in itself, creates most of the real complications.
The house:
Should probably be torn down. The siding is made of asbestos. I don't know about the ceilings. They stopped making the kind of wood paneling that adorns the ground floor walls because it's a fire hazard. I don't know about the insulation. I think the floor may be rotting out in places, especially the bathrooms which needed to be completely redone when I was a child, it's plain frightening now. I could go on an on, but I'll just summarize thusly: At a minimum, all of the siding on the main house must be changed. Both bathrooms and the kitchen must be totally redone. The ceiling may need to come out and be replaced. All flooring materials must be replaced and in some cases the floors are in need of repair. All vertical surfaces must be replaced and / or painted. That's just the minimum to make it livable, that's not even making improvements, and that's only if there isn't some other major problem that I'm not even aware of! I could go on and on about what's going through my head on this line of thinking but I won't. That just gives you an idea. I think you'd have to look hard to find a crack house in worse shape.
I shouldn't buy and here's why:
It's a dump. It's a dump that will cost a small fortune. I can afford to buy it; barely, but that's all I can afford as a responsible human being. I can't afford to put any money into fixing it up at least not much, at least not right away. Even if I could afford to fix it up, I'm in a position where I can't do any of the work myself and I can't even be there to supervise any work I have done by contractor. I would have to have total confidence in anyone who represents me. As if I knew nothing of human nature. I'm a trusting soul, but I'm not an idiot and I'm not rich enough to take chances. I actually have no idea what any of this work is going to cost. Except the asbestos siding. I made a few calls and I've got and idea of what that liability will set me back. I can only even be there one month every two years. As it is right now, I can't even see staying in it much less renting it out. People who have enough money to rent a place in Tahoe to spend their vacations wouldn't set foot in this house the way it is. It's a 13 hour, minimum $1000 flight from France. There are five of us. We won't be coming to visit very often. On the flip-side, the east coast is only eight hours away from France and tickets sometimes run as little as $600. The housing shlump is taking effect on the east coast too and places like the Carolinas or D.C. or Virginia beach may be as nice, in many ways, as Tahoe. Lastly, it's California. The land of fruits and nuts. I hate the CHP. I hate the franchise tax board. California has, what, 8% sales tax? Plus one of the highest state income taxes, the most draconian automobile registration regulations and fees, and Tahoites are divided evenly between irresponsible, maggot-infested dope-smoking neo-hippies and the most arrogant, ego-centric neo-aristocrats in America.
Why I should buy it (count the "if"s)
I know Tahoe, I love it there and I'm comfortable there. It's home. I know it intimately. I know the house intimately too Ifnothing major has changed. If I understand the tax laws under proposition 13, and If my parents, for legal purposes anyway, "give" me the house (sign over the title to me), I'll pay less than half of the property taxes that I'd pay If they weren't my parents. That's the main kicker. Were it not for that fact, I think I'd just forget it. If it were suitable for human habitation, I could rent it to vacationers, reserving one month every two years for myself. If I had the money to fix it up, it would probably be a good investment, If the U.S. economy recovers instead of getting worse. Renting it would help me make the payments in the months when it would rent (peak summer and peak winter in nice, snowy, years). This would also solve the problem of where I go when I'm on vacation in the U.S. It's the largest lot on the block and it's not beach front property but it's the next best thing. If you had a really good arm, you could almost throw a rock in the lake from their front porch. It could be a very very nice place If it were fixed up. I'll go as far as to say that government working slobs like me don't own houses in Lake Tahoe, certainly not in that kind of location, certainly not as nice as this one could be If I had my way with it.
Too be continued I'm sure....