California E&S Insurance

Opportunity to buy our rental - but should we? We rent a single family home in a highly desirable part of our city (neighborhood is registered as a historic place). They are offering to sell it to us privately. We’ve already started negotiating. Their final offer is fair (they are offering roughly a 6% discount for not using a realtor) but it’s above our ceiling. We’d never have a chance to get back into this neighborhood again given how competitive it is. Home prices are very high and consistently sell over asking. Blocks away in another neighborhood, a similar home would sell for 30% less. We have done our research on the pros/cons of a private sale. We would hire an attorney. Renting the home is about 30% of our net monthly income. PITI would be a stretch at 43% — taxes are high, and would go up when reassessed for the sale. If one of us lost our income and couldn’t replace it after a year, we’d have a problem. We have no debt. We have saved enough for a 20% down payment, a 6 month emergency fund, and 1-2 major home projects. We aren’t planning on having kids at this time (could change). Here’s the thing. This house hasn’t been really renovated in 70+ years. I imagine it needs a major infrastructure overhaul - plumbing, water/mold, and more. We’d like more space which would involve finishing the attic (meets the requirements for finishing). It would take us years to save in order to do it all. The house is livable enough until then. We’re thinking of doing a thorough (and pricey) inspection before proceeding just to really gut check against our finances. Hoping we might get a little more from the seller with the report to make it work. Are we letting emotion get the best of us here? We live there now and we love it, especially the community programming and our neighbors, but it’s a big financial stretch. This feels like a wealthier person’s game and we’re just trying to play it.

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  "title": "Opportunity to buy our rental - but should we?",
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