Priorities, degree vs condo

Discussion in 'General Distance Learning Discussions' started by rickyjo, Feb 23, 2010.

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  1. rickyjo

    rickyjo Guest

    Anyone who knows anything about me on this forum knows that I am cheap, frugal as they come. The reason is that I have a low income and recently got married; however, between my wife and myself our thriftiness has paid off. We have about 28 grand between the two of us. Thanks to the real estate bust condos that were worth 50 to 70 grand just a few years ago are now worth between 30 and 40 grand. That's great news because we can maybe afford a very cheap condo. Home ownership would be nice, rent sucks, we could save up money so much faster without rent. Also our apartment is just over 500 sq feet and my living room is filled with computers and junk from being self employed. We need a bigger place with two bedrooms.

    The problem is I'm self employed, I cannot get a home loan because I'm too good at riding stuff off on my taxes (and they don't lend under about 50,000 anyway). An acceptably low income turns into barely a profit (just on paper, I drive a little four cylinder car with good mileage) even though my credit score is great no loan for me; however, because of my credit score I have a low interest credit line ($8,000 at 7.5 APR) with no penalties for prepayment and no charge to use. That makes up the difference, but we go into debt for at least a year. So do we take advantage of the market and the tax credit or go back to school? My wife has 71 credits, I have only to take just over a semester for my 2 year degree if I go to Red Rocks online. I think we could both get through school debt free if we worked even very part time.

    We don't have the money for both the condo and the schooling right now. She at least (because she is getting a 4 year degree and classes are more expensive) will have to wait if we buy this condo. I'm afraid if we don't buy it now the market will rebound the tax credit will be gone and it will be too late for at least a few years.

    We have been waiting on going back to school for too long but this chance may be too good to miss....

    Any thoughts? I'm losing my mind! :confused:
    You all should have seen my melt down yesterday.

    Incidentally, the FAFSA will help a good bit, may even pay for my schooling but hers is too expensive (also I would have to shut down the business to go full time and take full advantage of the FAFSA). We would have to take some heavy loans in addition to the condo debt if we tried to do both. I have never been in debt over six months. I don't know what to do.
     
  2. bazonkers

    bazonkers New Member

    What is your goal for finishing your degrees? To switch jobs and make more money or simply because it's been a long term goal? You said that "we could save up money so much faster without rent" so maybe it's worth putting education on the back burner for a year or so until the condo is paid off and then you'll have even MORE money for school. Make sure it's something that you think you can sell easily in the future. Not having a rent payment is great but it's not much fun if you can't sell your condo when the time comes. With rent, you can walk away (more or less).

    Keep in mind too that when you own your own house, there are all sorts of other expenses. If something like the stove or hot water heater breaks, it's on your dime to get it fixed. In an apartment, you simply call the landlord.
     
    Last edited by a moderator: Feb 23, 2010
  3. rickyjo

    rickyjo Guest

    Yeah, that's true, and that's what the ARK and CRAIGSLIST are for. I can get any appliance there is for free (maybe not a water heater) if I'm patient. That's the plan anyway.

    I think that selling it will be fairly simple when the market rebounds because if we get it this cheap we will let it go for a good price if we have to. Plus there is the tax credit. It's instantly reimbursed 10%, so that's an immediate profit.

    As for my goals in getting a degree, it's mostly a long term goal. I do not immediately require it or have plans to switch careers any time soon. I doubt my wife will implement hers directly after getting it either.

    Honestly, not having one stresses me out. I just want to have something so that if I don't go back to school it will be OK. Also, it's been so long since I've been in high school, I'm really dreading going back to school. I hated it then, I bet I'll find it more inconvenient now. I want to complete something before my resolve melts away or I get a job that is "good enough" or the business takes off and I feel like I dont need one. .
     
  4. bazonkers

    bazonkers New Member

    I think you just answered your own question. The return on investment for getting the condo now is higher than getting a degree now. It's not like getting the condo squashes all hopes of ever getting a degree. You seem to think you can continue in a year or so when the condo is payed off. I'd buy the condo.
     
  5. rickyjo

    rickyjo Guest

    That's good advise. That's what I think too, intuitively. Maybe I can still take some CLEPs or something to keep on the ball. Do you agree that taking on student loans and several grand on the condo at the same time is probably not a great idea?
     
    Last edited by a moderator: Feb 23, 2010
  6. bazonkers

    bazonkers New Member

    Absolutely! Many of the CLEP/DANTES exams are very easy with a little bit of studying. If you can afford the condo and still have the money to take a few exams so your progress doesn't come to a complete halt, I think that is the way to go.
     
  7. Ian Anderson

    Ian Anderson Active Member

    I owned a condo in a decent development for ten years but I would not recommend it over a house. First there are homeowners fees which you have to pay with no tax relief. Then what can kill you are occasional, and out of the blue, assessment fees for condo maintenance. It took me over a year to sell my condo even though I sold it for less than I paid for it in an up market for homes.
    Perhaps you can take advantage of the $8,000 tac credit for new buyers.

    In the end you will just have to do a cost benefit analysis in deciding school or condo. Talk to a financial adviser if you can't do this yourself.
     
  8. rickyjo

    rickyjo Guest

    A house is out of the question because we do not have the cash for it. Otherwise I would completely go for it. Nothing has turned up in our price range for a while that did not involve an HOA. We have to take what we can get right now.

    I do hate HOAs but I try and look at it as insurance rather than a waste of money. I'm also going to try and find an HOA healthy enough not to levy random assessments. The condo we are looking at now is brick and that helps because the exterior requires so little maintenance.

    But I agree a house would be better, but there just aren't any in the price range.

    I'm trying to do a cost benefit analysis, but there are about a billion different ways things could play out.

    AND YES! I can take advantage of the tax credit, but NO it's only 10% up to 8,000 so I can only take advantage of 3-4 thousand of it. Still ten percent. That's the main reason I want to do this, 10% instant profit. Market is awful, and should go up. So I think it would wind up being profitable if we sold in, say, five years. But really, in the end, I think I'm just going to rent it when we move on.
     
  9. rickyjo

    rickyjo Guest

    And in response to bazonkers (love your username by the way): I could also just do more ALEKS. I planned to stop but I suppose if I'm still not in school that is a cheap way to progress. I could just do all of them. I could just pay for a year up front and just DO IT. Hmmmm. Maybe school isn't the best answer right now.

    I think a lot of this is that I feel like now that I'm married I really should get a degree. It seems a bit out of order (home 1st, degree 2nd), but I've always done things in an unusual way and order.
     
  10. AV8R

    AV8R Active Member

    I vote condo. If you don't foresee an immediate ROI from your investment in a college degree, postpone it.
     
  11. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    From your description of the situation, I say buy a condo and do some CLEPs. It sounds like the only real reason you're considering enrolling in a degree program at all is to conform to someone else's idea of what you're "supposed" to do in life.

    Besides, if you understand and like the idea of CLEPs, then I'd have said to do those over borrowing money for tuition even if you weren't getting a condo!

    -=Steve=-
     
  12. taylor

    taylor New Member

    rickyjo, I applaud you for being a saver and living within your means. I don't have advice on this one but I have a feeling you will make the right decision.
     
  13. sshuang

    sshuang New Member



    Hi rickyjo,

    Where do you live?
    30 and 40K for a condo is unheard of in California.
     
  14. Ian Anderson

    Ian Anderson Active Member

    Depends where you live - about 40 minutes South of my home brand new homes can be bought for under $50K (originally listed for $200K):
    http://www.trulia.com/CA/Salton_City/
    My barber just bought one and she is really happy with it.
     
  15. rickyjo

    rickyjo Guest

    I live in Colorado, our real estate isn't the cheapest but it's less than half of what I would expect in Cali! Don't forget, a 30,000 condo in livable condition was unheard of here just a couple short years ago as well. Like I said all these condos were worth almost double whenever they were purchased previously. One we almost bought for 30,000 was over 60,000 four years prior.


    But guess what! It looks like my car is going to cost almost 2,000 to repair! I'm horrified. And this is rich: the part is under 100, it's all in labor! They have to remove the engine to replace a water pump. I'm going to try fix-a-leak first, but if it doesn't work I'm in trouble. We aren't even 100% sure it's the water pump soooo here's to hoping. Any of you marvelous fellows a mechanic? I have a slow coolant leak, it's been there for a couple months.

    And Taylor, thank you for the kind words. I take a lot of lip for being disgustingly cheap! Also my wife did great! she had help from parents, but she saved any extra and lived frugally, she contributed more than half! I'm so proud of her.

    Finally we are putting in an offer tomorrow, probably. It's a low offer but if it works that would be really exciting. Our apartment is too small and too expensive.

    I think I can go to a community college and get my 2 year if we do this, but my wife will just have to wait. I think she is happy at her job for the time being anyway.
     
    Last edited by a moderator: Feb 24, 2010
  16. taylor

    taylor New Member

    I'm not a mechanic but I can tell you that you should get several estimates. I've had a water pump replaced in the past and I can't remember how much I paid but it was nowhere near that amount. It was definitely less than $1000 for sure, I want to say a lot less. If coolant is leaking from your radiator that's probably a cheaper fix since a lot of times they can seal the hole with a blow torch without replacing the radiator.
     
  17. Home prices will not be this low again for a long time. Buying a home a huge benefit to your long-term financial well-being. I agree with the others who say that the degree can wait for a few years. You have time to do that, you may not have another opportunity to buy a home.
     
  18. AV8R

    AV8R Active Member

    California has some of the most expensive real estate in the nation due largely in part to building restrictions. I live on the east coast and was in SoCal only two weeks ago and was shocked at the real estate prices I was seeing. A person can literally buy 3-4 times more house on the east coast than what someone in California can buy. Sad.
     
    Last edited by a moderator: Feb 24, 2010
  19. bazonkers

    bazonkers New Member

    I moved from San Francisco to Seattle for that very reason. Well, that and also because Washington doesn't have a state tax.
     
  20. John Bear

    John Bear Senior Member

    Yeah, but nothing beats the feeling of leaving the office after a grueling day, and curling up on your diploma, putting your tired feet up on that shiny gold seal, sipping your pina colada, with the dulcet tones of your school song wafting from your Bose (here's a taste: http://tinyurl.com/SchoolSong) . . . and rejoicing that you don't have to worry about fixing the leaky toilet of your condo, listening to your neighbors through those paper thin walls, or being laughed at in your Spandex at the community health club.
     

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