Does it make sense to invest in a house in Delaware

I am a homeowner on Long Island. I am barely getting by, but I am getting by. A friend of mine is
moving to Delaware. He went down and bought a huge house (4 bedroom, basement, upstairs ) for
$230,000. Thing is, it wont be built til next May. He needs $7K down and $8K at closing. So, I had
an idea....

What if I did the same thing? I dont have much desire to move there. But, if I did the same thing, I
would own the house in 2006 for $15K out of my pocket. Assuming houses appreciate like they have
been, wouldnt it fairly safe to say that the house should be worth an additional $30-$50K by the
closing? If so, I would sell it at that point. It would be like buying next year's house at today's
price. Of course, if there is a bubble burst this year, I will be SOOL.

Does this sound good to anyone? It could be the same situation in any state really. Plus, if someone
needs a house in May and start looking in March, they would have to wait another year, so the house
that is ready to move in may be appealing to them. Of course, I could always sell my house and move
there. Are there any jobs down there? I am going this weekend to scope it out.

Tony

Re: Does it make sense to invest in a house in Delaware

"Jim" <> wrote in message
news:

> What if I did the same thing? I dont have much desire to move there. But,
> if I did the same thing, I
> would own the house in 2006 for $15K out of my pocket. Assuming houses
> appreciate like they have
> been, wouldnt it fairly safe to say that the house should be worth an
> additional $30-$50K by the
> closing? If so, I would sell it at that point. It would be like buying
> next year's house at today's
> price. Of course, if there is a bubble burst this year, I will be SOOL.

There is nothing wrong with this plan if you enjoy gambling. Planning on a
30-50K appreciation has about the same risk as buying the latest dot com
stock. Some people win big in things like this, and some lose big.

Re: Does it make sense to invest in a house in Delaware

"Jim" <> wrote in message
news:

> I am a homeowner on Long Island. I am barely getting by, but I am
> getting by. A friend of mine is moving to Delaware. He went down and
> bought a huge house (4 bedroom, basement, upstairs ) for $230,000.
> Thing is, it wont be built til next May. He needs $7K down and $8K at
> closing. So, I had an idea....
>
> What if I did the same thing? I dont have much desire to move there.
> But, if I did the same thing, I would own the house in 2006 for $15K
> out of my pocket.

And if you are "barely getting by", how do you expect to make the payments
on the remaining $215,000?

Re: Does it make sense to invest in a house in Delaware

On Fri, 22 Jul 2005 17:34:34 -0700, "lugnuts" <> wrote:

>"Jim" <> wrote in message
>news:
>
>> I am a homeowner on Long Island. I am barely getting by, but I am
>> getting by. A friend of mine is moving to Delaware. He went down and
>> bought a huge house (4 bedroom, basement, upstairs ) for $230,000.
>> Thing is, it wont be built til next May. He needs $7K down and $8K at
>> closing. So, I had an idea....
>>
>> What if I did the same thing? I dont have much desire to move there.
>> But, if I did the same thing, I would own the house in 2006 for $15K
>> out of my pocket.
>
>And if you are "barely getting by", how do you expect to make the payments
>on the remaining $215,000?

I went to Delaware this weekend. I had a few numbers wrong. The house I was interested in was
$275,000 before upgrades. I could have what I want for $300,000. That said, I signed the contract,
gave $1000 and have to pay $6000 next week. I have to pay $8000 more at closing. That is $15000.

If I moved into the house, I would be paying around $1900/mo for the mortage. That is $800 less a
month than here in NY and I would have a house that is 3 times the size.

If things go half as good as they have been the past year, the house that I am buying should be
worth $340,000 by closing date. I could sell at that point and make nearly $40000. On the other
hand, after spending the weekend in DE, we realized that we may actually move there. It is building
up so fast. There are so many developments and houses being built. I am a computer consultant and my
fiance is a teacher. People in the area seem to think that we would both have no problem getting
jobs there. We are both way more qualified than most of the professionals in our fields that live
there. I know that making $75,000 a year here in NY makes it nearly impossible to live in my simple
ranch that I just paid $350,000 for 8 monts back.

So, if the DE house goes up a lot this coming year, I will sell and apply all the profit to my
current mortage. If it doesnt increase in value, I can always sell my house here and move there. I
do not need to live there forever. I do enjoy the area and my fiance and I have nearly a year to
find jobs there.

So, to move to DE, it would mean we would need $500/ month plus utitlites and all that. I think we
can handle that, even in DE. BTW, I live in my house alone. We do not live together but we will be
married by next year. So, I could stay here but I can live so much better for so much less money
over there. On the other hand, there is nothing like NY

T




I am a computer consultant and my fiance' is a teacher. Of course we would have to get

Re: Does it make sense to invest in a house in Delaware

"Jim" <> wrote in message
news:

> If things go half as good as they have been the past year, the house that
> I am buying should be
> worth $340,000 by closing date. I could sell at that point and make nearly
> $40000.

What you say sounds O.K. up to this point. This is a big assumption. Make
plans for what you will do if this does not happen.

Re: Does it make sense to invest in a house in Delaware

On Mon, 25 Jul 2005 20:38:33 -0400, Jim <> wrote:

Whatever you do, make sure you do not sell before 2 years is up on
your current home or you will get hit with capital gain tax. That is
assuming your current home went up in value.