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      12-13-2017, 03:06 PM   #133
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I headd about the mandatory law stating that you must not rent out the house in the first few years of ownership. A lot of people buy homes and leave them empty for a few years before renting them out. Itís happening all over the Bay Area.
I've never heard of that law. Typically if you obtain a mortgage to buy a home as a primary residence, the lender will make you sign an "Affidavit of Occupancy" (i.e. stipulating that you must move in within 60 days, and reside in the property for at least 12 months).

If you purchase a home and finance it as an investment property, there would be no issue renting it out right away. Financing the home as a "primary residence" comes with a lower interest rate (less risk) than buying it as an "investment" property (higher risk).
2 scenarios

1. Foreign investors buying a property as investment and leave it empty for however long they choose because they don't care about the income.

2. Buyers are buying their first or second home as primary residence when in fact they are investment properties. In the short run they don't care about losing a year or two of rent since they are saving more in the long run. There is a requirement of how long one must live on the property before renting it out. People can leave it empty or pretend like they live there for a period of time before renting it out. They don't want to risk getting caught renting it right away.
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      12-13-2017, 03:20 PM   #134
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Yep. Will take effect with the new tax plan unless it is taken out, which I doubt since it was in both the House and Senate plans. And from what little I've been able to find on this, there will be no grandfathering. Really blows because we were thinking about moving out of the Bay area sometime soon but now we have to wait a lot longer.
I was waiting to sell this property because I didn't want to sell during the holidays. Great......
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      12-13-2017, 03:23 PM   #135
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2 scenarios

2. Buyers are buying their first or second home as primary residence when in fact they are investment properties. In the short run they don't care about losing a year or two of rent since they are saving more in the long run. There is a requirement of how long one must live on the property before renting it out. People can leave it empty or pretend like they live there for a period of time before renting it out. They don't want to risk getting caught renting it right away.
I bet the latter is what my neighbor is doing. Lived in the house for a few months & did a bunch of remodeling & just moved out. I never saw a for rent or for sale sign out front or in a window. Yet he left his broken down old Z car in the garage.
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      12-13-2017, 03:33 PM   #136
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Originally Posted by BMW F22 View Post
2. Buyers are buying their first or second home as primary residence when in fact they are investment properties. In the short run they don't care about losing a year or two of rent since they are saving more in the long run. There is a requirement of how long one must live on the property before renting it out. People can leave it empty or pretend like they live there for a period of time before renting it out. They don't want to risk getting caught renting it right away.
Yes, that happens as occupancy misrepresentation/fraud. If the lender finds out, the loan can be recalled in full (and prosecution could lead to jail time/fines).

There are also down payment benefits (less of it required) to finance as a primary residence vs. second home/investment property.
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      12-13-2017, 03:35 PM   #137
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I was waiting to sell this property because I didn't want to sell during the holidays. Great......
Sorry to be the bearer of bad news. It hasn't been publicized much. Between this, losing my state income tax deduction, and some other changes, CA homeowners like me are really getting dicked.
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      12-13-2017, 03:39 PM   #138
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So a realtor friend of mine just listed a 1273 square foot house on a 6100 square foot lot in Palo Alto, CA. for $2,499,000. The funny thing is that it will probably get multiple offers and sell for over asking. Pretty crazy. Its three blocks from Mark Zuckerberg's home.
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      12-13-2017, 03:41 PM   #139
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Sorry to be the bearer of bad news. It hasn't been publicized much. Between this, losing my state income tax deduction, and some other changes, CA homeowners like me are really getting dicked.
Yes we are. I pay over $20K on property taxes alone. I don't even what to think about the SALT deductions I am losing as well.
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      12-13-2017, 04:28 PM   #140
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Originally Posted by -BEASTMW- View Post
Sorry to be the bearer of bad news. It hasn't been publicized much. Between this, losing my state income tax deduction, and some other changes, CA homeowners like me are really getting dicked.
Thanks for letting me know. I don't want to keep it another two years. Who knows if the correction or crash might happen before that time.

Something is coming though, a lot of people are overextended.

Last edited by someguywithanm3; 12-13-2017 at 04:34 PM.
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      12-14-2017, 02:02 AM   #141
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      12-14-2017, 05:05 PM   #142
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Originally Posted by BMW F22 View Post
As we are aware, the real estate market has gone up like crazy in the last few years. Homes are being snatched up within days of hitting the market- many sold for over asking price. New, cookie cutter homes are being built every day to satisfy demand.

As a prospective home buyer, one should, IMO, think about how much those homes will be worth in the coming years. With prices being at an all time high, the danger of overpaying is real.

So, will the RE market stabilize or crash in the next few years or will the trend continue? What are your thoughts? An example is that a home in a good area was $170k in 1995. That same home was about $800-900k in the early 2000s. Now it is going for $1.2M+. These are homes built in the 50-60's.

PS- I live in NorCal so this trend may not apply to other parts of the country.
Yes. As soon as the stock market pops there won't be any stock options to sell for down payments for Bay Area properties.

Of course interest rates in general have been so low that any increase will put pressure on prices.
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      12-14-2017, 05:54 PM   #143
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Quote:
Originally Posted by NicoleLusts4BMW View Post
So a realtor friend of mine just listed a 1273 square foot house on a 6100 square foot lot in Palo Alto, CA. for $2,499,000. The funny thing is that it will probably get multiple offers and sell for over asking. Pretty crazy. Its three blocks from Mark Zuckerberg's home.
These are those btc boomers
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      12-18-2017, 01:39 AM   #144
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Thanks for letting me know. I don't want to keep it another two years. Who knows if the correction or crash might happen before that time.

Something is coming though, a lot of people are overextended.
Well thankfully, the final tax bill does NOT have any change included, despite both House and Senate versions having it, so we keep the two years out of five rule. Hallelujah!
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      12-18-2017, 01:53 AM   #145
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Well thankfully, the final tax bill does NOT have any change included, despite both House and Senate versions having it, so we keep the two years out of five rule. Hallelujah!
That goodness!!!!! I could kiss you. (No homo)
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