Definitely worth reading for all homebuyers, novices and repeat buyers alike.

So basically, you buy this rail car and then tug it around the country depending where you want to vacation. Done and done–a home and a means of transit all in one.

And even better, if you have crazy friends who ALSO own rail cars, you can link them together and travel across the country caravan style. How amazing does that sound?

Ok, now let’s get down to business. What will this awesome acquisition cost you? The car was originally listed a couple years ago at $225,000 but now it’s down to $89,900–not bad! The cost of moving it is less than you’d think, too, at $1.50/mile.

Given that you avoid real estate taxes (a house on wheels isn’t considered real estate), the monthly “parking” cost is very reasonable at $150/month. The car itself is approximately 85 feet long and 9 1/2 feet wide with 10 foot doomed ceiling.

Sources: Laurie Holland, Tiny House Blog

Here’s how my little brain traveled from the hell-in-a-handbasket news from the US government to me trying my hand at refinancing my condo:

• Clearly, US government is in crazy debt, with few options for getting out
• In the past, governments have used inflation to get out of debt, and this may be our country’s best bet over the next few years
• Inflation is great for people who OWE money, but not so great for people who’ve SAVED money
• Therefore, given my particular financial situation (and yours may be different) it is not crazy to pull equity out of my Portland condo, which has about $60,000 in equity based on the sale price in 2008

Think about it: you know how your parents brag about paying $12 for their house back in the 1970s, and today it’s worth $500,000? That’s inflation at work (and sometimes, also appreciation). In an inflationary environment, everyone’s mortgage payments become much more manageable as overall prices and wages rise.

I wanted to explore my options. What if I pulled some equity out, and at the same time refinanced into a lower interest rate?

Seemed reasonable at first, but it wasn’t long before my bubble burst.  After pulling some “comps” (sales from comparable properties nearby) my mortgage broker had some bad news: my condo was underwater. The balance on my mortgage was more than the condo appeared to be worth.

WHAT?!?!

Despite my high and mighty sense of compassion, I never thought that I would be counted among the ranks of oxygen-deprived homeowners. I thought I’d bought my place in the trough of the market. I knew the place hadn’t appreciated, but to depreciate by so much?! Unthinkable!

I shuddered.

I would never be able to refinance, and I certainly couldn’t pull equity out of the condo, since my $60,000 of hard-earned equity had vanished into thin air. People, I’m not lying when I tell you it was painful. Even though I’m in a relatively good position–I’m not planning to sell the place, and it pays for itself as a vacation rental–this was nauseating news.

But! Ericka, my determined mortgage broker, had a plan: let’s see if I qualify for a HARP Loan.

Negligent real estate blogger that I am, I wasn’t sure what a HARP loan was. But after some research, I’m now a big fan.

HARP (Home Affordable Refinance Program) is an Obama program aimed at homeowners who are current on their payments, but who’ve ended up underwater. The idea is that these responsible buyers shouldn’t be prevented from refinancing into a lower interest rate–and boy howdy, they sure are low these days!

So HARP lets you borrow up to 125% of the home’s value. There are tons of restrictions–for example, the home must be a primary residence (so I would’ve had to move into the condo for a while), the loan must be held with Frannie or Freddie, etc.

We ran through all the numbers, and ultimately I decided not to go through with the refinance. The payback term was a bit long at 3 years (that is, it would’ve taken 3 years for me to recoup the cost of refinancing), so the savings weren’t enormous given my already-low interest rate. My very responsible broker advised me to do the refi if I planned to hold the condo for at least 3 years, and not to do it if I thought I might sell within 3 years.

While I have no immediate plans to sell, I wanted to keep my options open. So while I appreciated HARP opening its arms to me, I ultimately declined.

But the moral of the story is this: If you’ve been a diligent homeowner making all your payments and feel snubbed that you aren’t getting a piece of the bailout action, HARP is here to help (at least until June 30, 2012, when the program expires).

[photo credit]

On to the post. There have been a few changes around here, which I’ll announce with this:

No, I don’t live here. My point is, this is a damn fine house. Gorgeous Victorian architecture, excellent condition, and in a central, upscale neighborhood (I’ll just vouch for that). 4 bedrooms, 3 bathrooms, 2,600 sq ft. So how much do you think it costs? $1 million? $1.4 million? $2 million?

This home just went into contract for a mere $585,000. And that, my friends, is because it is located in Portland, Oregon – land of reasonable prices.

Thus begins my reintroduction into Portland, where this crazy blog got its start. Yes, it’s true – I have left San Francisco. And far from the long, drawn-out saga of the move to SF, the move back to Portland was short and sweet. I (along with my S.O.) decided to move, signed a lease, and bam, here we are. We’re renting a lovely home not far from my furnished rental condo, which I’ll be managing full-time from now on. The best part is we’re paying the same rent we paid back in SF and are getting about 3 times the value in return.

Anyway, enough about me! On to the Portland real estate porn. This home was built in 1890 but appears to be fully updated. Interestingly, it sold for $489K in 2003, then for $720K in 2005 (nicely done, bubble!), and now it’s back down to $585K. Given the stellar location and large size, I’d say we’re back to a somewhat realistic price.

Check it out:

[Show as slideshow]

I love being back in an area where even fancy pants homes are vaguely, one day, attainable–I mean, if you squint really hard and it’s kinda dark. [View on Redfin]

I gush more fully about it on my vacation rental blog, but here’s a little appetizer:

This home is a true ode to history. Everything from the architecture, furnishings, and art pieces lining the walls pays homage to the people (Georgia O’Keefe, Ansel Adams and D.H. Lawrence, by the by) who once claimed this space.

I loved the place as a vacation rental, as a piece of real estate, and as a historical looking glass all at once.

How could you not?

Cleanly smoothing out the trio of units for sale/rent recently on my block, this unit is a Tenancy in Common (TIC). TICs are a fancy arrangement San Franciscans have devised to buy multi-unit buildings in San Francisco without calling them condos, since the city limits the number of condos that can come into being each year.

You can read the scoop on TICs, so I won’t bore you with the details here. Instead, let’s jump into some numbers. In a recent post, I ran through the monthly cost of buying a condo on my block, compared to the cost of renting a similar place.

This TIC is comparable to the condo and rental apartment–it has an extra bedroom and bathroom as well as parking, but it’s on a low floor, gets little light, and is small as all getout.

This unit is priced at $525,000. Great for a 2 bdrm / 2 bath in central San Francisco, right? Well, maybe.

The financing arrangement calls for 25% down, and the best possible interest rate offered is 6%. The HOA is a reasonable $175/month. What sayeth thee, mortgage calculator? (Click to enlarge)

Looks like we’re talking about a monthly payment of $3,212 with the HOA figured in. Compared with the condo’s monthly cost of $3,328, this definitely seems to be more bang for the buck on a cash flow basis. But don’t forget you’d have to put a huge chunk of cash down upfront, rather than the meager 5% in the case of the condo. To compare “apples to apples,” had you put 25% down on the $499,000 condo, your monthly costs would go down to $2,720.

And lest we forget, renting a similar apartment on the same block costs only $1,900.

The decision really is one of priorities. Do you want to:

• Reduce monthly costs? Then rent.
• Preserve cash? Then rent or go for the condo.
• Buy something you’ll live in for a long time and eventually sell? Consider the condo.
• Buy something you can live in for a loooong time, and you have lots of cash up front? Then the TIC might work for you.

For us, the low monthly cost and flexibility of renting is the priority. But I definitely see a major upside potential in buying a TIC if you’re going to stay put for a long time. The possible lottery win is an exciting component of this style of ownership, but for my blood it’s too risky to count on it.

All these firehouses for sale begs the question, what happens if there’s a fire? Are there any firehouses left? But no matter…

Former Engine #40, a firehouse sitting above Cole Valley, was chopped in half–lengthwise–and now its front half is on the market for $1.9 million. While most duplexes in San Francisco sit atop one another, for some reason the architect decided that these houses needed to be 5 levels. That’s right: 5 levels. On the bright side, you can always just use the fire pole!

wheeeeeeee!

The listing describes 3 bdrms / 3.5 bathrooms, original details, views, and (naturally) a fireplace. [View on Redfin]

No firemen in these photos, sadly, but I’ve got plenty of eye candy nonetheless:

[Show as slideshow]

• Part 1: Mad Dash Real Estate Hunt
  
• Part 2: A Diamond in the Rough
• Part 3: Making an Aggressive Offer
• Part 4: Back in My Arms Again, But Do We Want It?
• Part 5: Perfection Discovered

Where we last left off, we’d found what seemed to be the perfect condo, yet our gut was telling us to hold off. We decided we just weren’t ready to buy in San Francisco, and with that settled we launched our rental apartment hunt.

Just to review what we would’ve paid had we proceeded with the “perfect” condo, here’s the rundown using our handy mortgage calculator (click to enlarge):

The asking price (and the price at which the place ultimately sold) was $499,000. We would have put down 5% with the 30 year FHA loan. With a down payment of less than 20%, we would owe PMI. Factoring in taxes and insurance, this brings our total monthly cost to $3,233–not including HOA, which would add another $95 to the monthly cost. Our fixed monthly living costs (not including utilities, TV, etc) would have been $3,328.

For two people used to paying much, much less than that, this was a scary number. We just weren’t sure we needed to own a home badly enough to justify tying up so much money. So we were happy to keep renting. And what do you know, our apartment hunt led us right back to this condo. Well, the same block.

A month after shutting down our real estate hunt, we came across a Craigslist posting for a “condo quality” apartment for rent just a few doors down from our rejected little nest. We immediately knew it was The One. The building was old, but the apartments had all been renovated with brand new bathrooms, kitchens, and floors. The landlord himself used to live in our unit, so it had nice extra touches like HDMI wiring and ceiling speakers in every room. 

It was similar in style and layout to the condo down the block, though the little details weren’t quite as nicely done. But who were we kidding, we were lucky to find this nice a place at this good a price: $1,895. Now that’s a number we’re much more comfortable seeing!

While it’s true we won’t be building equity with our monthly rental payments, we get to enjoy much more freedom in our everyday life. M can save a nice chunk of money each month, and I can have the freedom to start my own business. For us, the right choice was one of flexibility and agility over equity.

We spurned a condo that would have cost $3,328 each month, in favor of a nearly identical rental apartment going for $1,895.

By the way, all these photos are comparisons between the actual condo and our rental apartment (a few months post-move in).

So, readers, what do you think? Did we make the right choice? Were we right to keep our costs down and rent, or should we have taken the plunge and bought a place?

But then you realize that this house is literally built into a CLIFF.

That's right.

The 1,900 sq ft home sits on 40 acres along California’s Big Sur coast. With 3 bdrms/2.5 baths, it’s not sprawling by any measure. And I wonder if the bedrooms feel like caves. But nonetheless, it’s an architectural gem. Dwell Magazine and the New York Times have both featured it. I came across it on Curbed’s new House of the Day feature, which is pure crack for someone like me. Originally on the market for $6 million, the price was recently reduced to $4,950,000. The house is cool, but I guess it’s not $6 million cool.

Maybe that’s because no one can find it?

“The idea was to let the terrain roll onto the structure so all one could see from the uphill side is the natural slope of the sod roof,” said principal architect Mary Ann Schicketanz of Carver & Schicketanz architects in Carmel (quoted on Curbed).

I like the idea of living under ground with a secret spectacular view. Nicely done, architects!

[view on Zillow]

[Show as slideshow]

In honor of my recent pro-renting rant, I thought I’d feature a rental for a change. No, it’s not exactly thrifty at $30,000/month, but hey, budgeting has to start somewhere.

Towering ceilings, a game room, wine storage, a library, a "fully staffed" building (whatever that means), it's got it all. I can barely stand to look at this place, it's so stunning.Here's where I'd cascade down the stairs each morning to report for my indentured servitude.

The full listing at Sotheby’s says this place is perfect for an art collector or someone who loves entertaining. Seems to be the right stereotype for this space.

You know how I love my mixed-use, multi-family properties, so while this place's price tag makes me nauseous, I have to give it credit for being so industrious. There's a separate entrance for the downstairs area so you really can have live/work separation. I appreciate that.

I also love that Sotheby’s lists for rent this little sidekick loft – also in TriBeCa, with a similar vibe, only much smaller. Sotheby’s can slum it when times are tough!

The price tag on this little punkin’ is a mere $4,500. Seems practically free compared to the $30,000 artist’s behemoth.

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One final note to my dear readers: I realize posting has been a tad slim of late. I assure you it’s for a good cause–I’m building a new business, one that I think you’ll all really dig. I’m spending my days scouting out exceptional vacation rental properties that I can recommend on my new site, Inhabit Vacations. So the next time you curse fate that there’s not a witty, insightful Real Savvy post before you, know that I’m out in the trenches, finding super cool houses that you–yes you!–can visit. Real Savvy Real Estate isn’t going anywhere, so don’t lose faith, but posts may slow down a little while I get Inhabit up and running.  I’ve got a ton of real estate stories and inside scoops in the pipeline, so stay tuned!

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