Author Topic: Pulled equity out of house for a  (Read 4928 times)

BTDretire

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Pulled equity out of house for a
« on: September 26, 2017, 01:18:47 PM »
I have a friend that does legwork for his neighborhoods HOA. Has one neighbor that is always late with
his fees. While at the county office filing a lien on the title, he noticed they had taken a second mortgage on their home to pay for the $80,000 motor home that has been setting in the driveway for months. 30 years to pay for a depreciating asset that gets little use, any wonder they are always late with their HOA fee.

slugline

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Re: Pulled equity out of house for a
« Reply #1 on: September 26, 2017, 02:34:52 PM »
I guess they have a place to stay after the future foreclosure of the main house?

crispy

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Re: Pulled equity out of house for a
« Reply #2 on: September 26, 2017, 02:50:00 PM »
I guess they have a place to stay after the future foreclosure of the main house?

There is always a silver lining!

paddedhat

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Re: Pulled equity out of house for a
« Reply #3 on: September 26, 2017, 04:03:18 PM »
Motorhomes are an amazing financial disaster for many who get involved. We have a used one that was in nearly new condition, and used very little by the original owner. It was seven years old when we bought it, and the seller lost roughly 65% of his initial investment. It's common for folks to stroll into a dealership, buy a $140K motorhome and walk out with a 20 year, $120K loan at 5% and an $800/month payment. What they don't understand is the RVs have horrendous depreciation issues, and they will be upside down on the loan for the first 12-14 years of the loan. They are expensive to maintain and repair (Camping World gets $150/hr for most of their service and repair work) and if they develop a water leak, typically involving rain penetrating the roof or sidewalls, it can quickly create a massively expensive repair problem, or even make the thing essentially worthless. Unless you can buy a used one cheaply, pay cash, and handle most of the repairs and maintenance as a DIY effort, they are nothing but a really ugly drain on your finances.

Travis

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Re: Pulled equity out of house for a
« Reply #4 on: September 26, 2017, 04:58:59 PM »
Motorhomes are an amazing financial disaster for many who get involved. We have a used one that was in nearly new condition, and used very little by the original owner. It was seven years old when we bought it, and the seller lost roughly 65% of his initial investment. It's common for folks to stroll into a dealership, buy a $140K motorhome and walk out with a 20 year, $120K loan at 5% and an $800/month payment. What they don't understand is the RVs have horrendous depreciation issues, and they will be upside down on the loan for the first 12-14 years of the loan. They are expensive to maintain and repair (Camping World gets $150/hr for most of their service and repair work) and if they develop a water leak, typically involving rain penetrating the roof or sidewalls, it can quickly create a massively expensive repair problem, or even make the thing essentially worthless. Unless you can buy a used one cheaply, pay cash, and handle most of the repairs and maintenance as a DIY effort, they are nothing but a really ugly drain on your finances.

It's the worst combination of automotive depreciation and domicile upgrades/furnishing problems.  There was an early episode of Pawn Stars (back before I completely gave up on History Channel) where a guy tried to sell his RV. There were vehicular and home-related maintenance problems in addition to it being old enough that the décor looked horrible.  Rick (the Pawn store owner) pretty much told the guy "it's a car that needs too much work and a house that needs too much work."  I can't remember it all, but I seem to recall the RV owner wanting something close to what you might pay for a near-new used RV and he still owed quite a bit on it.

Travis

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Re: Pulled equity out of house for a
« Reply #5 on: September 26, 2017, 04:59:44 PM »
I have a friend that does legwork for his neighborhoods HOA. Has one neighbor that is always late with
his fees. While at the county office filing a lien on the title, he noticed they had taken a second mortgage on their home to pay for the $80,000 motor home that has been setting in the driveway for months. 30 years to pay for a depreciating asset that gets little use, any wonder they are always late with their HOA fee.

How much was the HOA fee?  I'm taking a guess less than a Starbucks habit?

paddedhat

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Re: Pulled equity out of house for a
« Reply #6 on: September 26, 2017, 06:18:03 PM »

It's the worst combination of automotive depreciation and domicile upgrades/furnishing problems.  There was an early episode of Pawn Stars (back before I completely gave up on History Channel) where a guy tried to sell his RV. There were vehicular and home-related maintenance problems in addition to it being old enough that the décor looked horrible.  Rick (the Pawn store owner) pretty much told the guy "it's a car that needs too much work and a house that needs too much work."  I can't remember it all, but I seem to recall the RV owner wanting something close to what you might pay for a near-new used RV and he still owed quite a bit on it.

Absolutely. I have mentioned it on other related threads, but one thing still amazes me. While shopping for a severely depreciated motorhomes, I repeatedly found worthy rigs that were for sale by owner, or on consignment, and overpriced by $25-50%. Typically, any attempt at negotiation was shot down by the seller based on, "that's what I owe on it, and I can't take any less". This is a fascinating mess on so many levels. First, the seller owns something that they cannot afford to keep, and cannot afford to liquidate at current market value. Second, they have spent years being upside down on the loan, and will continue to be upside down until the situation is resolved. Third, in the price range I was shopping, the value guides typically dropped $5-7K in retail value on January 1st, every year. So, the seller is dumping $8-12K a year in insurance, maintenance, and payments, owes $10-20K over market value, and is loosing another $4-600 a month in depreciation. Finally, for many of these dolts, they were fully expecting somebody to be willing to overpay by 25-50% of the true value of a depreciating RV based on the fact that that's what they need to clean up the mess. Many were very matter of fact, and totally unaware of how freakin' lost they were, when it comes to how the real world works.  I've heard, "yea, it needs new tires and a few other things (tires can be $600 each) and yea, the dealer has one just like it for $37,500, but If nobody is willing to pay me $48,000, I'm going to have to hold on to it".  In other cases, folks develop an unreasonable attachment to the things, or think that they deserve top retail for what they have, based on the highest ad price they could find in a national online search. The fact that it was bought by a dealer for 50% of that number, took thousands in repairs and reconditioning, comes with a warranty and new tires, and is overpriced by a lot, to leave room for negotiation, is not something they are willing to even think about.  Yea, there were a lot of WTF?  moments while hunting for this one.
« Last Edit: September 26, 2017, 06:21:15 PM by paddedhat »

MrsPete

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Re: Pulled equity out of house for a
« Reply #7 on: September 26, 2017, 06:26:39 PM »
Typically, any attempt at negotiation was shot down by the seller based on, "that's what I owe on it, and I can't take any less". This is a fascinating mess on so many levels.
I like to watch home shows, and this is a common theme: 

- We are desperate to move to a bigger place /place nearer family /place in a new school district.
- Our house has been on the market for two years, and we've had no offers. 
- Other houses similar to ours are selling for $400,000, but we need to get $500,000 for the house we plan to buy, so we will wait 'til someone is willing to pay $500,000. 

I am constantly amazed at how little some people understand about business and /or how self-obsessed /emotional people are about finances. 

Travis

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Re: Pulled equity out of house for a
« Reply #8 on: September 26, 2017, 11:08:34 PM »
Typically, any attempt at negotiation was shot down by the seller based on, "that's what I owe on it, and I can't take any less". This is a fascinating mess on so many levels.
I like to watch home shows, and this is a common theme: 

- We are desperate to move to a bigger place /place nearer family /place in a new school district.
- Our house has been on the market for two years, and we've had no offers. 
- Other houses similar to ours are selling for $400,000, but we need to get $500,000 for the house we plan to buy, so we will wait 'til someone is willing to pay $500,000. 

I am constantly amazed at how little some people understand about business and /or how self-obsessed /emotional people are about finances.

I want to smack those folks and ask "Do you even know how the market/supply & demand works?"  Your need for a particular price does not affect me as a potential buyer, especially if I have other options.  There are the occasional times where holding out for the right buyer to get back your investment is prudent and legitimate, but those are usually times when you have something rare on your hands.  You have a car that is no-kidding a classic, or your home is in a location and condition that the right buyer for it exists and you just need patience.  A used vehicle is such a common thing that websites can predict the selling point of your car based on a few variables and come up with a pretty accurate answer.

I moved recently, and one of the homes we looked at for rent was in a good but old neighborhood (1950s). Half the homes on the street had been torn down and rebuilt literally from the foundation up.  The one shown to us was not one of the rebuilds.  Except for a new fridge it looked like it was 60 years old.  The house next door was being rebuilt and since the owners owned both homes they were running a power cord into the kitchen for their tools. Of the house being shown for rent. The front yard was being used to stage building materials. Of the house being shown for rent.  They also painted a strip down the edge of the rental's yard as if they were planning on moving the property line in favor of the rebuild house.  The after-market garage on the rental looked like they slapped three sheets of plywood over the carport and rigged a door to it.  I mention all of this because they were asking for the exact same rent as the 5-bedroom rebuild across the street that looked like a palace in comparison.  The agent was a friend of the family and tried selling us on this place with a completely straight face.  I just checked and this embarrassment of a house has been pulled from the market.  Strangely they bought the house just this spring and paid top dollar for it. Overpaying for a shitty house doesn't mean you can get away with charging top rent for it.

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Re: Pulled equity out of house for a
« Reply #9 on: September 27, 2017, 08:18:07 AM »
Typically, any attempt at negotiation was shot down by the seller based on, "that's what I owe on it, and I can't take any less". This is a fascinating mess on so many levels.
I like to watch home shows, and this is a common theme: 

- We are desperate to move to a bigger place /place nearer family /place in a new school district.
- Our house has been on the market for two years, and we've had no offers. 
- Other houses similar to ours are selling for $400,000, but we need to get $500,000 for the house we plan to buy, so we will wait 'til someone is willing to pay $500,000. 

I am constantly amazed at how little some people understand about business and /or how self-obsessed /emotional people are about finances.

I had a business partner who used a similar rationale to reject a perfectly good offer on a 5-plex we owned. He wasn't willing to take a loss, no matter what, and without his signature we couldn't move ahead. The property was making money, we'd spent a fair bit of money on upgrades and repairs, but it was only cash flow positive when I managed it. When he managed it his way (delegated it to a paid property manager) we had too many vacancies and a commission to pay on top of it, so the property was cash flow negative. We had increasing equity of course, but it gradually nibbled away at our cash reserves. I wanted to offload the property at the top of the market back in '08 because I believed it was a bubble. He refused, and dragged his feet, and required the broker to list the property at more than the market could bear. Result: no sale. Then, when the bubble burst, the property became impossible to sell for a few years and we were stuck with it for quite some time. When we finally did sell, we got substantially less for the property. He ended up taking a far bigger loss than he expected. The biggest irony: this guy had a MBA in finance.

Laura33

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Re: Pulled equity out of house for a
« Reply #10 on: September 27, 2017, 08:38:42 AM »
When we finally did sell, we got substantially less for the property. He ended up taking a far bigger loss than he expected. The biggest irony: this guy had a MBA in finance.

One of life's most significant and dangerous risks:  assuming you are smarter than the average bear.

TheGrimSqueaker

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Re: Pulled equity out of house for a
« Reply #11 on: September 27, 2017, 09:24:21 AM »
When we finally did sell, we got substantially less for the property. He ended up taking a far bigger loss than he expected. The biggest irony: this guy had a MBA in finance.

One of life's most significant and dangerous risks:  assuming you are smarter than the average bear.

I think that knowing your limits and being honest about what they are is a very rare thing.

MgoSam

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Re: Pulled equity out of house for a
« Reply #12 on: September 27, 2017, 09:31:57 AM »
When we finally did sell, we got substantially less for the property. He ended up taking a far bigger loss than he expected. The biggest irony: this guy had a MBA in finance.

One of life's most significant and dangerous risks:  assuming you are smarter than the average bear.

I think that knowing your limits and being honest about what they are is a very rare thing.

Agreed, that's why I try to hang out to people that have these qualities. The customers I have that possess these are the ones I fight for.

homestead neohio

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Re: Pulled equity out of house for a
« Reply #13 on: September 27, 2017, 10:04:45 AM »
Absolutely. I have mentioned it on other related threads, but one thing still amazes me. While shopping for a severely depreciated motorhomes, I repeatedly found worthy rigs that were for sale by owner, or on consignment, and overpriced by $25-50%. Typically, any attempt at negotiation was shot down by the seller based on, "that's what I owe on it, and I can't take any less". This is a fascinating mess on so many levels. First, the seller owns something that they cannot afford to keep, and cannot afford to liquidate at current market value. Second, they have spent years being upside down on the loan, and will continue to be upside down until the situation is resolved. Third, in the price range I was shopping, the value guides typically dropped $5-7K in retail value on January 1st, every year. So, the seller is dumping $8-12K a year in insurance, maintenance, and payments, owes $10-20K over market value, and is loosing another $4-600 a month in depreciation. Finally, for many of these dolts, they were fully expecting somebody to be willing to overpay by 25-50% of the true value of a depreciating RV based on the fact that that's what they need to clean up the mess. Many were very matter of fact, and totally unaware of how freakin' lost they were, when it comes to how the real world works.  I've heard, "yea, it needs new tires and a few other things (tires can be $600 each) and yea, the dealer has one just like it for $37,500, but If nobody is willing to pay me $48,000, I'm going to have to hold on to it".  In other cases, folks develop an unreasonable attachment to the things, or think that they deserve top retail for what they have, based on the highest ad price they could find in a national online search. The fact that it was bought by a dealer for 50% of that number, took thousands in repairs and reconditioning, comes with a warranty and new tires, and is overpriced by a lot, to leave room for negotiation, is not something they are willing to even think about.  Yea, there were a lot of WTF?  moments while hunting for this one.

The RV rental business approach to dealing with all that depreciation and maintenance is to charge very high nightly rates with additional costs for mileage and generator use. 

I'm looking at an RV purchase to take a cross-country trip starting April 2018.  Paddedhat, any tips for sourcing a lightly used rig at a good price, avoiding the above owner delusions?  I prefer not to pay the dealer markup, and still get something lightly used but already much depreciated.  I may simply re-sell after the trip.  If you can point me to other treads on this, or PM me to not go too far off topic, that would be awesome.  I'm thinking I'll just have to go look at a LOT of RVs.

I guess they have a place to stay after the future foreclosure of the main house?

My first thought was they would probably sell this at a loss to prevent the foreclosure, but honestly, with people making such bad financial decisions, I cannot accurately predict what they'll do.

Dave1442397

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Re: Pulled equity out of house for a
« Reply #14 on: September 27, 2017, 01:03:53 PM »
I just had to watch a few minutes of this guy regretting his RV purchase...no research up front, apparently.

https://www.youtube.com/watch?v=4DUz0OO1T2g&t=576s

As for homes, my neighbor let her mother's house sit for almost 18 months while she cleared it out and fixed it up (mostly just painting inside and some light yard work). I asked her early on in the process why she didn't just hire someone to get the house ready for sale, and she said it was too expensive. Meanwhile, property taxes were $9,000 a year, and she was paying for utilities all that time. It had to cost her well over $15k to keep the house empty that long.

Chesleygirl

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Re: Pulled equity out of house for a
« Reply #15 on: September 27, 2017, 01:14:50 PM »
Crazy.

I've seen people do the same, to buy a boat that was kept docked at the lake, and they only used it once or twice a year.

Capsu78

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Re: Pulled equity out of house for a
« Reply #16 on: September 27, 2017, 04:36:24 PM »
I had a business partner who surprised me one year by saying he and his wife were making a major life change and bought a higher end RV...In the first year he started to figure out the reality of a rig like that, including needing an aftermarket stabilization system because windy days had scared the crap out of him and his wife a couple of times.
Lost track of him for a couple years but our business lives came together again a few years later.  I visited his house which had the RV parked outside. I asked "So you still RV'ing?"  He rolled his eyes and said "No, taking a bath on this thing...but at least my kid is one of the most popular kids among his friends at Burning Man!"

One interesting usage for a RV is having a business where you rent out your RV on College football weekends.  You can rent an RV delivered, provisioned and set up from Friday morning to Sunday morning right at the campus RV parking lot for a specific game.  The customer flys in, shows up, uses the unit for the weekend, leaves it where it is and the rental company comes and collects it.  Not inexpensive, security deposits/insurance involved of course and since the owner has one unit he brings up for himself, he can stop by unannounced to make sure Tappa Kegga Brew fraternity didn't get through his screening process.  Whatever the cost, the number I saw to rent the vehicle in place was still far far cheaper than actual RV ownership.


iris lily

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Re: Pulled equity out of house for a
« Reply #17 on: September 28, 2017, 08:14:35 AM »
I just had to watch a few minutes of this guy regretting his RV purchase...no research up front, apparently.

https://www.youtube.com/watch?v=4DUz0OO1T2g&t=576s

As for homes, my neighbor let her mother's house sit for almost 18 months while she cleared it out and fixed it up (mostly just painting inside and some light yard work). I asked her early on in the process why she didn't just hire someone to get the house ready for sale, and she said it was too expensive. Meanwhile, property taxes were $9,000 a year, and she was paying for utilities all that time. It had to cost her well over $15k to keep the house empty that long.

People are unable to add up carrying costs of real estate. I see this again and again.

paddedhat

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Re: Pulled equity out of house for a
« Reply #18 on: September 28, 2017, 12:09:59 PM »
I just had to watch a few minutes of this guy regretting his RV purchase...no research up front, apparently.

https://www.youtube.com/watch?v=4DUz0OO1T2g&t=576s

As for homes, my neighbor let her mother's house sit for almost 18 months while she cleared it out and fixed it up (mostly just painting inside and some light yard work). I asked her early on in the process why she didn't just hire someone to get the house ready for sale, and she said it was too expensive. Meanwhile, property taxes were $9,000 a year, and she was paying for utilities all that time. It had to cost her well over $15k to keep the house empty that long.

People are unable to add up carrying costs of real estate. I see this again and again.

Absolutely, when the MIL passed, my BIL took his good ole' time handing his share of the "to do" list. It got to the point that it appeared that he viewed the MIL's home as some sort of a no-cost weekend get-away, not a place that needed to be emptied, fixed up and SOLD.   After a year of delaying getting the thing on the market, I had enough,  and sat the dear wife down for a math lesson.  She was blown away when we careful added up the annual carrying costs, and it topped $8K.  She contacted the BIL, who was also dumbstruck that it actually costs a hell of a lot of cash to leave a house sitting around.

paddedhat

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Re: Pulled equity out of house for a
« Reply #19 on: September 28, 2017, 12:24:13 PM »
I just had to watch a few minutes of this guy regretting his RV purchase...no research up front, apparently.

https://www.youtube.com/watch?v=4DUz0OO1T2g&t=576s



Thanks for the link. I just spent a few minutes watching this. I't a must see for RV buyers, as he lays out a lot of ugly truths regarding everything from financing and depreciation, to the expectations VS reality of ownership. The other fascinating part is that this fairly young and intelligent guy did ZERO due diligence before spending a huge amount on an RV. He is lamenting that his loan is for an irrationally long time frame, will result is a crazy amount handed to the bank if he rides it out, to the last payment, and is front loaded with the majority of his payments currently going towards interest. He seems surprised that improvements made to his motorhome are not of an asset building nature, like they might be on a home. Sadly, ALL of his regrets are issues that anybody should be well aware of before they buy.

MgoSam

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Re: Pulled equity out of house for a
« Reply #20 on: September 28, 2017, 12:35:15 PM »
I just had to watch a few minutes of this guy regretting his RV purchase...no research up front, apparently.

https://www.youtube.com/watch?v=4DUz0OO1T2g&t=576s

As for homes, my neighbor let her mother's house sit for almost 18 months while she cleared it out and fixed it up (mostly just painting inside and some light yard work). I asked her early on in the process why she didn't just hire someone to get the house ready for sale, and she said it was too expensive. Meanwhile, property taxes were $9,000 a year, and she was paying for utilities all that time. It had to cost her well over $15k to keep the house empty that long.

People are unable to add up carrying costs of real estate. I see this again and again.

Absolutely, when the MIL passed, my BIL took his good ole' time handing his share of the "to do" list. It got to the point that it appeared that he viewed the MIL's home as some sort of a no-cost weekend get-away, not a place that needed to be emptied, fixed up and SOLD.   After a year of delaying getting the thing on the market, I had enough,  and sat the dear wife down for a math lesson.  She was blown away when we careful added up the annual carrying costs, and it topped $8K.  She contacted the BIL, who was also dumbstruck that it actually costs a hell of a lot of cash to leave a house sitting around.

Please tell me that he then got up off his ass and fixed everything up and put the house on the market the following weekend?

zolotiyeruki

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Re: Pulled equity out of house for a
« Reply #21 on: September 28, 2017, 02:38:33 PM »
With so many people buying expensive RVs and selling them at a huge loss, is there just a much larger market at a lower price point for used RVs?

paddedhat

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Re: Pulled equity out of house for a
« Reply #22 on: September 28, 2017, 04:07:50 PM »


Absolutely, when the MIL passed, my BIL took his good ole' time handing his share of the "to do" list. It got to the point that it appeared that he viewed the MIL's home as some sort of a no-cost weekend get-away, not a place that needed to be emptied, fixed up and SOLD.   After a year of delaying getting the thing on the market, I had enough,  and sat the dear wife down for a math lesson.  She was blown away when we careful added up the annual carrying costs, and it topped $8K.  She contacted the BIL, who was also dumbstruck that it actually costs a hell of a lot of cash to leave a house sitting around.

Please tell me that he then got up off his ass and fixed everything up and put the house on the market the following weekend?
[/quote]

That would of been sweet. Actually, the day of closing, I had a bad feeling and decided to head out very early, and take the 50 mile ride to the MIL place.  I hitched a 12' utility trailer to one of my trucks, just in case. I about flipped when I got there. The house was ready, but there was a 12' x 20' storage shed in the backyard that was stuffed to the rafters with junk! The BIL and I first loaded five loads of marginally resaleable goods, and delivered them to a local thrift store. We then loaded a ton and a quarter of flat out trash onto the trailer,  and I unloaded it at the local landfill. Worked like a dog for eight or nine hours and made the 5PM closing by minutes. At that point all that mattered was that it was over. I lost a work day, a fifty in gas and another eighty bucks in dump fees, but it was nothing compared to ending the drama.

MrsPete

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Re: Pulled equity out of house for a
« Reply #23 on: September 28, 2017, 06:56:36 PM »
I want to smack those folks and ask "Do you even know how the market/supply & demand works?"  Your need for a particular price does not affect me as a potential buyer, especially if I have other options. 
Yeah, I read a cruise board occasionally, and fairly often people say things like, "The cruise line should offer alcohol for free, add such-and-such feature, but not raise the prices!"  And they're serious. 

I'm looking at an RV purchase to take a cross-country trip starting April 2018.  Paddedhat, any tips for sourcing a lightly used rig at a good price, avoiding the above owner delusions?  I prefer not to pay the dealer markup, and still get something lightly used but already much depreciated.  I may simply re-sell after the trip.  If you can point me to other treads on this, or PM me to not go too far off topic, that would be awesome.  I'm thinking I'll just have to go look at a LOT of RVs.
We took a western driving trip a couple years ago, and we started with the idea of renting an RV.  In our minds, it was a perfect choice:  No need to pack/unpack and get into hotels every night.  A kitchen at our disposal.  Logical choice, right?  Wrong.  When we investigated the cost of renting, we realized it was just too much.  Plus we thought about the logistics of driving that big box through cities.  Also, we realized that the historical sites, etc. that we planned to see were not necessarily next to campgrounds ... so we'd have needed to unhook everything /drive the RV long distances to see the sites we planned.  And the gas.  Oh, the gas.

Then we looked at tent camping, but we weren't really willing to do that big set up /pick up every day ... and, again, the things we wanted to see weren't always next to campgrounds.

In the end, we stayed in hotels.  We had two years' lead time, and my husband travels occasionally for work, so he chose his hotels with a plan in mind /saved his points, and many of our hotel stays were free (or reduced).  We used Priceline for other hotel stays.  And we splurged in a few places.  This choice had its pros and cons, but it turned out to be MUCH cheaper than our original RV plan.

If we'd had a friend who owned an RV, we might've offered to barter for its use, but we didn't have such a friend. 

One interesting usage for a RV is having a business where you rent out your RV on College football weekends.  You can rent an RV delivered, provisioned and set up from Friday morning to Sunday morning right at the campus RV parking lot for a specific game.  The customer flys in, shows up, uses the unit for the weekend, leaves it where it is and the rental company comes and collects it.
A friend of mine's college-aged son had an unusual job:  He'd drive a big RV belonging to a NASCAR fan to the race track (sometimes this meant he'd drive the distance of several states) ... set up the RV ... stock it with food and drink ... then disappear to a local cheap hotel until the race weekend was over, when he'd drive the RV back home ... clean it ... leave it ready for the next outing. 

I thought it was a great job for a college kid like him, but who would pay for that service?

paddedhat

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Re: Pulled equity out of house for a
« Reply #24 on: September 28, 2017, 07:20:50 PM »
With so many people buying expensive RVs and selling them at a huge loss, is there just a much larger market at a lower price point for used RVs?

There is a huge market for used RVs of all sizes and types in North America. The other interesting fact is that the last two years have been record production years for the industry as they head for the half million units a year mark. Boomers retiring, cheap loan money, families with kids that want a travel trailer for a few weekends and a vacation week every year, and countless other reasons, but they just can't make them fast enough.

LDoon

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Re: Pulled equity out of house for a
« Reply #25 on: September 28, 2017, 11:55:50 PM »
I just had to watch a few minutes of this guy regretting his RV purchase...no research up front, apparently.

https://www.youtube.com/watch?v=4DUz0OO1T2g&t=576s



Thanks for the link. I just spent a few minutes watching this. I't a must see for RV buyers, as he lays out a lot of ugly truths regarding everything from financing and depreciation, to the expectations VS reality of ownership. The other fascinating part is that this fairly young and intelligent guy did ZERO due diligence before spending a huge amount on an RV. He is lamenting that his loan is for an irrationally long time frame, will result is a crazy amount handed to the bank if he rides it out, to the last payment, and is front loaded with the majority of his payments currently going towards interest. He seems surprised that improvements made to his motorhome are not of an asset building nature, like they might be on a home. Sadly, ALL of his regrets are issues that anybody should be well aware of before they buy.

Eh, pretty standard for anybody in their 20s.  I've watched some of his videos and they are generally informative and cover the basics.  This guy made some mistakes on a 40k purchase that he's lived in for 3 years, and is willing to admit them for all to see and learn from.  I'd venture that everyone on this board had an "oh snap" moment where something clicked.  Better to click early in life and on a smaller issue than later / bigger issue.  So kudos to him for living an interesting life, learning from it, and helping others to learn as well.

paddedhat

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Re: Pulled equity out of house for a
« Reply #26 on: September 29, 2017, 05:24:45 AM »
I just had to watch a few minutes of this guy regretting his RV purchase...no research up front, apparently.

https://www.youtube.com/watch?v=4DUz0OO1T2g&t=576s



Thanks for the link. I just spent a few minutes watching this. I't a must see for RV buyers, as he lays out a lot of ugly truths regarding everything from financing and depreciation, to the expectations VS reality of ownership. The other fascinating part is that this fairly young and intelligent guy did ZERO due diligence before spending a huge amount on an RV. He is lamenting that his loan is for an irrationally long time frame, will result is a crazy amount handed to the bank if he rides it out, to the last payment, and is front loaded with the majority of his payments currently going towards interest. He seems surprised that improvements made to his motorhome are not of an asset building nature, like they might be on a home. Sadly, ALL of his regrets are issues that anybody should be well aware of before they buy.

Eh, pretty standard for anybody in their 20s.  I've watched some of his videos and they are generally informative and cover the basics.  This guy made some mistakes on a 40k purchase that he's lived in for 3 years, and is willing to admit them for all to see and learn from.  I'd venture that everyone on this board had an "oh snap" moment where something clicked.  Better to click early in life and on a smaller issue than later / bigger issue.  So kudos to him for living an interesting life, learning from it, and helping others to learn as well.

I'm guilty of just clicking through this one, and not watching everything. I did catch that he was a bit shocked that he took a $10K depreciation hit in the three years he owned it. A couple of thoughts on that one. If he did pay $40K out the door, the only thing limiting his loss to a very low 25% would be the fact that the AK. market is not in tune with the larger US market, where he would of gotten hit a lot harder. The other issue is, did he avoid paying rent or a mortgage for a "sticks and bricks" home during that time frame? Given the inflated costs of living in AK. it would seem that a >$300 a month "loss" for a roof over your head, is quite a bargain, depending on his site rental fee?

BTDretire

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Re: Pulled equity out of house for a
« Reply #27 on: September 29, 2017, 06:01:00 AM »
I just had to watch a few minutes of this guy regretting his RV purchase...no research up front, apparently.

https://www.youtube.com/watch?v=4DUz0OO1T2g&t=576s


Thanks for the link. I just spent a few minutes watching this. I't a must see for RV buyers, as he lays out a lot of ugly truths regarding everything from financing and depreciation, to the expectations VS reality of ownership. The other fascinating part is that this fairly young and intelligent guy did ZERO due diligence before spending a huge amount on an RV. He is lamenting that his loan is for an irrationally long time frame, will result is a crazy amount handed to the bank if he rides it out, to the last payment, and is front loaded with the majority of his payments currently going towards interest. He seems surprised that improvements made to his motorhome are not of an asset building nature, like they might be on a home. Sadly, ALL of his regrets are issues that anybody should be well aware of before they buy.
Then on the other side, there is this young couple that outfitted a Dodge Sprinter Van. They have lots of great ideas and they  love what they have created.
https://www.youtube.com/watch?v=ooOoDx2NxkU
 And they are ready for boondocking.

SnackDog

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Re: Pulled equity out of house for a
« Reply #28 on: September 29, 2017, 07:02:11 AM »
We nearly bought a house years ago from an antique hoarder who had taken out a second mortgage to buy matching Jaguars for he and his spouse.  They had listed the place way over the market value in 2005 at the height of the frenzy (with plans to move out of the Bay area and retire in grand style) but backed off about 30% by the time we made an offer in 2007 as prices were declining.  We found problems during inspection and asked for another 5% price reduction. He went ballistic so the deal fell through.  They house languished on the market another three years and finally sold in 2010 for 20% less than we would have paid.  I think in the end he barely had enough after real estate fees to pay off his first and second mortgages.  If he had just been realistic on his 2005 price the house would have sold in a week for much more than he got in 2010.  Today, of course, it is worth double what he sold it for.

Dave1442397

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Re: Pulled equity out of house for a
« Reply #29 on: September 29, 2017, 11:39:34 AM »
I just had to watch a few minutes of this guy regretting his RV purchase...no research up front, apparently.

https://www.youtube.com/watch?v=4DUz0OO1T2g&t=576s


Thanks for the link. I just spent a few minutes watching this. I't a must see for RV buyers, as he lays out a lot of ugly truths regarding everything from financing and depreciation, to the expectations VS reality of ownership. The other fascinating part is that this fairly young and intelligent guy did ZERO due diligence before spending a huge amount on an RV. He is lamenting that his loan is for an irrationally long time frame, will result is a crazy amount handed to the bank if he rides it out, to the last payment, and is front loaded with the majority of his payments currently going towards interest. He seems surprised that improvements made to his motorhome are not of an asset building nature, like they might be on a home. Sadly, ALL of his regrets are issues that anybody should be well aware of before they buy.
Then on the other side, there is this young couple that outfitted a Dodge Sprinter Van. They have lots of great ideas and they  love what they have created.
https://www.youtube.com/watch?v=ooOoDx2NxkU
 And they are ready for boondocking.

Yeah, I watched that one too...great couple with some very good ideas about setting up a van. I think I was daydreaming about how much money I could save if I sold everything and lived in a van. The rest of the family likes living in a house, though, so no van for me :)

paddedhat

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Re: Pulled equity out of house for a
« Reply #30 on: September 30, 2017, 07:12:30 AM »
I just had to watch a few minutes of this guy regretting his RV purchase...no research up front, apparently.

https://www.youtube.com/watch?v=4DUz0OO1T2g&t=576s


Thanks for the link. I just spent a few minutes watching this. I't a must see for RV buyers, as he lays out a lot of ugly truths regarding everything from financing and depreciation, to the expectations VS reality of ownership. The other fascinating part is that this fairly young and intelligent guy did ZERO due diligence before spending a huge amount on an RV. He is lamenting that his loan is for an irrationally long time frame, will result is a crazy amount handed to the bank if he rides it out, to the last payment, and is front loaded with the majority of his payments currently going towards interest. He seems surprised that improvements made to his motorhome are not of an asset building nature, like they might be on a home. Sadly, ALL of his regrets are issues that anybody should be well aware of before they buy.
Then on the other side, there is this young couple that outfitted a Dodge Sprinter Van. They have lots of great ideas and they  love what they have created.
https://www.youtube.com/watch?v=ooOoDx2NxkU
 And they are ready for boondocking.

Yeah, I watched that one too...great couple with some very good ideas about setting up a van. I think I was daydreaming about how much money I could save if I sold everything and lived in a van. The rest of the family likes living in a house, though, so no van for me :)

It's hard not to view the "build your own van" trend a lot like the tiny house craze. For every 100K people that explore it as a casual curiosity and daydream, maybe less than one percent put a tiny bit of effort into pursuing it, and a few end up starting a project with a real van. Of that group, a small percentage actually get it done, and hit the road. At that point they find out that there are really big downsides to the dream,  that somehow failed to get a mention in all the artsy pinterest pics, and glowing writeups written by young hot hippy chicks traveling with their equally attractive, bun topped lumberjacks. (gee, all the super cool vans online didn't have any place to shit-shower-shave. Who knew that would be a problem?)

If you really want to dive into how it works in the real world, check out cheaprvliving.com , read the blog, watch the documentary, and dig into the forum. It can be a happy lifestyle for some, but it is far from all rainbows and roses. Lots of people end up in a van since they are too broke to do much else, or too incompatible with society to deal with anything but self imposed isolation and carefully metered exposure to the "real world".  Not judging, just offering a real window into the realities of the lifestyle for most.

RWD

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