Oh boy! My head is going nuts making this decision! :) I had my neighbor bush hog again (tax refund check FINALLY coming this week..that's how I'm paying for this thing..yeah, yeah, I know, I need to tweak my exemptions so I get my money much earlier, the crazy thing is my federal we had to pay and state we got twice as much back...go figure)....luckily my neighbor did it in exchange for me letting him use my well water on his corn...I LOVE neighbors!! :) I did bake him a batch of cookies, though. I agree I could use a 3 point hitch tractor but I don't really want one. There's just too much, attachments, size, bulk, and they intimidate the heck out of me..their under carriage decks don't have any higher cutting than the Kubota zero turns..and I want to avoid getting a finishing deck for my front yard...I have vinyl fencing all around and don't want to maneuver those tractors..yes, ideally, I'd have both a tractor/ZRT..but I want a pool! Yes, the crazy lady coming out in me. We've worked hard to get to this point, have had two house payments for 10 months, UGH...hard to save for these things and when that house sells I want to jump into a pool not a bigger 3 point hitch tractor! :) Sure, one day, when I'm hauling 50 pound bags of fertilizer around I might regret it, but nah. So, here I go, check is in the mail from the state, it's burning a hole in my pocket and I'm going to go check out that scag and see if I can't talk the Kubota team down on price....that John Deere 727A...it's got 23 hp and they will put a hitch on it (not 3 point just a drop in which I could use on the rare occasion)...I'm not sure if that's the right model but I know it had 23hp and a 54 inch deck with 7 gauge steel welded deck..I'll need to make sure I'm comparing apples to apples. Y'all have given me great direction and suggestions..I'm going into this much more informed and able to choose a mower that will atleast give me 10 years..by then I may make that tractor purchase...I've got a friend down the road that has 150 acres and is selling it all..hoping I might score a little tractor off him! :) I'll post a pic of what I get next week! Thanks! Tara

Sorry it took me awhile to respond, thanks for all the comments Chelone I have lots of relatives who have a great retirement doing what you are doing. MIL struggled to put the kids through college on a teachers salary and now in retirement is rolling in it. Keep it up I have no problem mortgaging or not mortgaging my own house. Our real estate taxes are high, probably more than many mortgages, so even if you got rid of a mortgage you are still paying 1k a month in taxes. In the above example, I probably would do option 4, if I really had a 5% mortgage I would not pay it off and probably stick part of the money in a CD paying 5.5 or whatever rate I could get above 5! To pay it off really would be leaving money on the table if you could SAFELY get more than that. I agree that Universal life is seldom a good deal and I would only do that if I thought from an insurance point of view it was a better deal than term for some reason. Otherwise I think its just a scam. The problem I had with the post that started this, if you have a mortgage at 5% and now have some extra cash, great, do not park it in your house because you really can get more at the bank. However the advisor was suggesting pulling money out (does not matter REF or HELO) just so you have it in your hands instead of it sitting dead in your house. Thats a great idea but if I am borrowing at 6% and can only SAFELY invest at 5% who is going to pay the spread? Also what about the 10k in closing costs I paid to pull the equity out? Worse what if I do follow a hot stock tip that ends up not so hot?! People are tempted when they have acess to so much cash (I think I could manage but who knows). Dave claims its an issue of safety to have too much equity without owning it outright. The HELO that was suggested would actually be one way to safeguard the eequity. Do not tap it unless you really need it, the perfect storm scenrio that Dave mentioned where people cannot tap the equity and lost their house even though they have lots of equity Thanks for the compliment Celtic, I just could not figure out how to adress the shortfall in an owner occupied property. Ia lso agree with you about the rental increase issue, 6% annally is impossible, office leases around here have a 3% increase, sometimes less. CMarlin I love your examples and you have given me things to think about. My DH thinks I am the most risk averse person on the planet so I doubt we will be competing for property (especially from NY!). In running your numbers why even invest the 500k? If your debt service at 6.7% is about 116k and your income is 144k, even assuming taxes are 20k why tie up so much? Do the lenders require this? Is it to give yourself a perfect storm cushion? Why not put aside 100k in an interest bearing acount instead and maybe put down 100k so you can cover incidentals with the rental income? I have no idea how this works. What is an SFR? Also do you buy rentals locally? You mentioned you research the areas which assumes you go outisde of your local area, do you go out of state? Just curious. What about I have Two real estate stories I think about that stop me from following your lead, I guess if prices really do drop in a mini crash maybe I will rethink it. Although there are still lots of people like me who know a bunch of people who recently got rich on real estate so we wonder if we could do the same and I always wonder about things everybody is doing, someone has to lose money doing it. Not saying you CMarlin I actually think your plan is sound except for the 6% but I assume even at 1 or 3% you will still make money (although how does that play into local tax increase, here they have been increasing taxes up to 6% PER YEAR based on the rapid increas in value of these properties). How many apartments do you feel you need to own when starting out to truly spread the risk so to speak? Also of the 144k, what percentage is overhead unrelated to taxes and mortgage. What are those expenses? Here are the stories that stop me. In 1986 a wealthy physician I know (not well) decided to invest in real estate out of state in Boston. With the 1987 crasg the condo market went belly up and they could not sell these in the late 80s. He and several others were general partners. One of his relatives who got him into this ended up losing her law licsence over this! They tried to sue him and he almost lost everything outside of this (had a large home etc) fortunately most of his assets were in his wifes name anyway for liability reasons relating to his medical speciality, so they dropped the suit when they realized this. This same guy started trading stock on margin out of his retirement account in the late 90s, his account at one point was up to 42 million! Needless to say he is still working after that market crash and he is now near retirement age My father was approached by his accountant in 1975 who was running a tax shelter. He and his partners were buying a building near Lincoln Center in NYC. At the time the neighborhood was a bad and they paid 1m for a 40 story building plus garage (400 per car per month) and retail stores in the lobby (now a Chase Bank, a drugstore and a McDonalds). Dads share would have been 100k but back then he did not have it and even if he did, well I get my risk averse thing from him! For some reason I remember telling him to invest but who listens to a 12 year old and again they really did not have that kind of money to throw out with 3 kids. In 1987 (yes at the absolute height of the market) I bought a last remaining sponser apartment in, you guessed it, that building for more than double what 10% of a 200 unit building would have cost 12 years earlier! This was a fluke dad did not realize it until he saw the purchase contract. They ended up selling the apartments back to the tenants for 10m in 1985! They kept the master leases on the garage and the McDonalds so I am sure that funded someone's retirement. The irony is this was sold as a tax shelter, it was not supposed to even make money! Dad has no regrets (well other than that 4th child they never had!LOL) he says that for every successful deal he was offered, there were 20 that failed and he would have lost his investment I know this is way too much information but its what makes me leary about real estate as an investment. I actually just want a bigger house for me and my household, I do not care if its paid off or not as long as I am not awake nights worrying about how I can pay the mortgage. Still trying to figure out how to get there Its funny I flip flop on the do it yourself investing. I hate being told what to do and need to understand it before I can commit. I also hate mutual funds as a general rule excpet for the ones that are based on indexes. I sort of get frustrated with magazines like money that seem to try to make everyone feel like they need to be in mutual funds and not just one, but a portfolio of them,. Are they secretly owned by a constortium of mutual fund. Also I wonder what an investment advisor can tell me? Its like my theory on stock brokers, if they were so great at picking stocks why would they need me to make money. No offense intended to any investment advisors. I do think an individual investor can beat the market average (or not!) even if they do not have access tp all the inside information because they have flexibility that a mutual fund running 1B does not. Then there are days when I look at my house which is basically decorated but the reality is that it lacks the fine tuning a decorator could give it but I hate the idea of living with something someone else has chosen for me(I tend to return gifts too). Its sort of like that with investing, I am not comfortable with the loss of control but I do not have the time and energy to follow this all the time

IMO, these people have learned from Wall Street, as they too walked away from their TRILLIONS in debt. Their outrageous leveraging decimated the economy...yet THEY were bailed out by the taxpayers...courtesy of the same politicians who won't extend unemployment benefits. The finance community is now rolling merrily along, laughing all the way to the proverbial bank, and planning on hiring. That being the case, is there any wonder that so many home buyers have just said "screw it"? Here is a recent, very on point NYT article. Interestingly enough, when the rich walk away...or a corporation walks away, it is considered an "investment strategy" in terms of cutting losses. When the average person does the same, they are considered to be greedy deadbeats, who bit off more than they can chew, and are getting what they deserve. We live in a society that penalizes anyone who has a moral compass, and rewards those who have destroyed our economic viability simply to feed their own unbridled greed. Gives a whole new meaning to "double standard" and reinforces the old adage, "nice guys finish last". July 8, 2010 NY Times Biggest Defaulters on Mortgages Are the Rich By DAVID STREITFELD LOS ALTOS, Calif. No need for tears, but the well-off are losing their master suites and saying goodbye to their wine cellars. The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley. Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population. More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic. By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent. Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment. "The rich are different: they are more ruthless," said Sam Khater, CoreLogicÂs senior economist. Five properties here in Los Altos were scheduled for foreclosure auctions in a recent issue of The Los Altos Town Crier, the weekly newspaper where local legal notices are posted. Four have unpaid mortgage debt of more than $1 million, with the highest amount $2.8 million. Not so long ago, said Chris Redden, the paperÂs advertising services director, "it was a surprise if we had one foreclosure a month." The sheriff in Cook County, Ill., is increasingly in demand to evict foreclosed owners in the upscale suburbs to the north and west of Chicago  like Wilmette, La Grange and Glencoe. The occupants are always gone by the time a deputy gets there, a spokesman said, but just barely. In Las Vegas, Ken Lowman, a longtime agent for luxury properties, said four of the 11 sales he brokered in June were distressed properties. "IÂve never seen the wealthy hit like this before," Mr. Lowman said. "They made their plans based on the best of all possible scenarios  that their incomes would continue to grow, that real estate would never drop. Not many had a plan B." The defaulting owners, he said, often remain as long as they can. "TheyÂre in denial," he said. Here in Los Altos, where the median home price of $1.5 million makes it one of the most exclusive towns in the country, several houses scheduled for auction were still occupied this week. The people who answered the door were reluctant to explain their circumstances in any detail. At one house, where the lender was owed $1.3 million, there was a couch out front wrapped in plastic. A woman said she and her husband had lost their jobs and were moving in with relatives. At another house, the family said they were renters. A third family, whose mortgage is $1.6 million, said they would be moving this weekend. At a vacant house with a pool, where the lender was seeking $1.27 million, a raft and a water gun lay abandoned on the entryway floor. Lenders are fearful that many of the 11 million or so homeowners who owe more than their house is worth will walk away from them, especially if the real estate market begins to weaken again. The so-called strategic defaults have become a matter of intense debate in recent months. Fannie Mae and Freddie Mac, the two quasi-governmental mortgage finance companies that own most of the mortgages in America with a value of less than $500,000, are alternately pleading with distressed homeowners not to be bad citizens and brandishing a stick at them. In a recent column on Freddie MacÂs Web site, the companyÂs executive vice president, Don Bisenius, acknowledged that walking away "might well be a good decision for certain borrowers" but argues that those who do it are trashing their communities. The CoreLogic data suggest that the rich do not seem to have concerns about the civic good uppermost in their mind, especially when it comes to investment and second homes. Nor do they appear to be particularly worried about being sued by their lender or frozen out of future loans by Fannie Mae, possible consequences of default. The delinquency rate on investment homes where the original mortgage was more than $1 million is now 23 percent. For cheaper investment homes, it is about 10 percent. With second homes, the delinquency rate for both types of owners was rising in concert until the stock market crashed in September 2008. That sent the percentage of troubled million-dollar loans spiraling up much faster than the smaller loans. "Those with high net worth have other resources to lean on if they get in trouble," said Mr. Khater, the analyst. "If theyÂre going delinquent faster than anyone else, that tells me they are doing so willingly." Willingly, but not necessarily publicly. The rapper Chamillionaire is a plain-talking exception. He recently walked away from a $2 million house he bought in Houston in 2006. "I just decided to let it go, give it back to the bank," he told the celebrity gossip TV show "TMZ." "I just didnÂt feel like it was a good investment." The rich and successful often come naturally to this sort of attitude, said Brent T. White, a law professor at the University of Arizona who has studied strategic defaults. "They may be less susceptible to the shame and fear-mongering used by the government and the mortgage banking industry to keep underwater homeowners from acting in their financial best interest," Mr. White said. The CoreLogic data measures serious delinquencies, which means the borrower has missed at least three payments in a row. At that point, lenders traditionally file a notice of default and the house enters the official foreclosure process. In the current environment, however, notices of default are down for all types of loans as lenders work with owners in various modification programs. Even so, owners in some of the more expensive neighborhoods in and around San Francisco are beginning to head for the exit, according to data compiled by MDA DataQuick. In Los Altos, Los Altos Hills and the most expensive neighborhood in adjoining Mountain View, defaults in the first five months of this year edged up to 16, from 15 in the same period in 2009 and four in 2008. The East Bay suburb of Orinda had eight notices of default for million-dollar properties, up from five in the same period last year. On Nob Hill in San Francisco, there were four, up from one. The Marina neighborhood had four, up from two. The vast majority of owners in these upscale communities are still paying the mortgage, of course. But they appear to be cutting back in other ways. The once-thriving Los Altos downtown is pocked with more than a dozen empty storefronts in a six-block stretch. But this is still Silicon Valley, where failure can always be considered a prelude to success. In the middle of a workday, one troubled homeowner here leaned over his laptop at the kitchen table, trying to maneuver his way out from under his debt and figure out the next big thing. His five-bedroom house, drained of hundreds of thousands of dollars of equity over the last 13 years, is scheduled for auction July 20. Nine months ago, after his latest business (he has had several) failed in what he called "the global meltdown," the man, a technology entrepreneur, said he quit making his $9,000 monthly payments. "IÂm going to be downsizing," he said. The man spoke on the condition of anonymity because, he said, he did not want his current problems to interfere with his coming reinvention. "IÂm a businessman," he explained. "I have to be upbeat." Carol Pogash contributed reporting.

Thank you everyone. We went back and forth all day today, and settled with them paying half closing costs and leaving us all of their outdoor furniture (wicker porch chairs, nice conversation set, and a glass table with chairs). They are also leaving their bamboo Roman shades. Final amendment has been signed!!! I finally feel like the deal is fair, but I definitely didn’t feel that way with us paying for all closing costs and getting nothing else out of the deal. Honestly, I didn’t think the siding and roof were as big of a problem, but my realtor freaked out over it. The inspector told me that he has seen people walk away from a home with those particular features. It can just be so hard when you aren’t the expert and have to make such a big decision. And yes, this is my dream home! I have posted some pics in another thread but here are some pictures from the listing. But it did work out! I feel like we