The housing game in Gainesville Virginia, let alone all other areas in Virginia, has become something to smirk at. I mean its obvious that during the real estate boom everyone made money except those that were watching from the sideline and jumped on the train as it was inching away only to slip and get crushed on the tracks. Well welcome to my world.
I am a 26 year old unemployed young man who is in a little over his head but at least has the gall to spit his experience online so that others can benefit from it. When all else fails vent out and let the world feel your pain. I live in Gainesville Virginia (yes theres another Gainesville other than Florida) with my wife, beautiful little girl, and brother-in-law and you might ask what the heck are we doing in a 5 bedroom, 5 bathroom, 4 level, 3800 sq. ft .25 acre property when we can hardly afford it? Ill tell you what trying to make a buck but boy did that hit us square in the jaw.
We bought our home from NV naïve as can be hoping to flip this burger and cook it on the other side but were the ones that got flipped and as far as making a buck we are definitely losing a buck or three. How can I be so chipper about the whole thing, well life is hardly over for me, my wife, my daughter and my brother-in-law so I really have no reason to complain, especially because Im in good health and in a good state of mind. But has it hurt our family, yes, more financially than anything and I would advise young home buyers to slow your breaks down when jumping into getting a new home.
Not to blame NV homes but the used their own appraisers based on the sale of their overpriced homes and even speculated further that our home was worth 100k more than what we paid for it. We were even at the point of putting 20% down of other equity borrowed from our parents-in-law to make the deal even better.
HEY EVERYONE lets get one thing straight here ok, first of all never and I mean NEVER go by the builders word when they say that the property is worth more than what it really is, theyre shoveling that hot garbage down your throat all day, if you really want to buy that nice new home get an independent appraisal always, ALWAYS! Because Ill tell you what you may just lose more than your appraisal money, you may be in way over your head, especially if you want to flip the property thinking you already have equity in the property. For one thing you will waste a lot of TIME and ladies and gentlemen time is not money for the records you cant earn it, multiply it, lend it or get it back like you can with money so please factor time into any investment relating to real estate and heck anything else in life.
So we got that one part straight new home builders will give you the heavens and earth to make a sale, do you have a decision in all of this? Of course I certainly did and I mucked up and am paying for it dearly I mean my mortgage is 5 times more than I make 5 TIMES! I thought by now I wouldve flipped this cash hog that is literally eating my capital alive (what little I have left).
You may say hey MR. 5 times more than you make what are you smoking? But the truth is thats the whole point. Young people are buying to flip and make a buck and thats what theyre really trying to do is flip so what do they care if they cant afford the property 6 or 7 months down the road they think it will be someone elses problem by then and thats where you need to realize that you should never buy out of your means because nothing is a sure bet, but then again you get great returns with minor risk investments (but thats neither here nor there, but certainly more here than there).
We have now become a society that can get loans without having enough income to afford them. You can flip burgers at McArches (and theres nothing wrong with that) and own 3 houses trust me I do taxes and Ive seen it a lot this year. Is there some level of residential fraud? Yep sure is but Im not the arbitrator (or arbi-traitor) in this game and wont sell anybody out thats for sure.
But think for a minute why this is an important lesson in life for you young and old people who dont have a clue (the rest of you probably know this) banks give out no income loans with decent credit for large amounts (more than the average person can afford) and honestly expect to have a low-default level (default meaning people who can no longer afford their mortgage and give up on it literally "foreclose") thats crazy.
These banks drove up the market because if you can buy outside of your means then you aim to buy higher without fear (initially) and that means people will up the prices of the houses that they are selling because the banks are giving out cheap money (thats when the interest rates are low) and suddenly the appraisals will cover these exorbitant amounts because houses are selling for these high prices so essentially are "worth" that much but really theyre not, its all speculation. And once the buying frenzy begins prices go up and up and up and up until finally people stop buying because they say hey "Im not paying 500,000 dollars for a 1 bedroom apartment in Washington DC" and then the laws of gravity begin to come into play. Its cliché but hey "what goes up must come down" and the market will come down it must because if it doesnt the next generation wont be able to buy anything.
The point Im trying to make is that when these markets get out of control, because it is all cyclical although this particular boom of 2003-2005 was like no other ever seen in history, you dont want to be buying houses like I did. You want to be waiting like a patient little bee or looking into to other markets that people are moving their money to wherever it may be North, East, South and West or in the stock market (although its so volatile that I dont see people in the foreseeable future investing in it because of the crash in 01 but this generation will eventually forget to inform the next and the cycle of life will once again commence).
So in a nutshell that was my experience do I blame NV homes or the Banks, no way after all builders keep an economy moving and the banks (although they always win) help you leverage your investment for after all if I were buying when the market goes up (again this is hard to do dont let the get rich quick real estate gurus tell you otherwise because it is all based on speculation) then banks would be particularly useful to me for I could use their 100% financing and buy me a property that was certain to go up in value because I did the necessary research and realized it was an emerging economy in that particular area and their was substantial job growth, and developments, etc. But the most important factor would have been that I bought at the right price not some over inflated value. And remember that fact if you buy something that is really only worth half of that value watch out because as you may have noticed incomes have not skyrocketed like real estate values have so careful when you bite the cheese in the trap for it just might be rotten and youll still get snapped.
If you know of anyone that would buy my house go to: www.newgainesvillehome.com