In the fall of 1975, we moved to our little town. We rented a house in an older area near downtown and just blocks from the beach. Wonderful location. It sat on a very large lot – rare for California. We rented it for $425.00 per month. The twin moved with us.
In the meantime, we sold a car to buy a nice lot for $8,500 in a town just north of us. It was a growing area and we thought we would build a house on it one day. It is now worth well over $200,000 today.
Near the end of the rental period, the owners asked if we would consider buying the house. They had bought it the year before for $45,000. They wanted $60,000.
I remember my dad, who had not been watching or in the real estate market for more than a decade, said that our house wasn’t worth $60,000. There wasn’t $60,000 worth of anything in the house. We had done our homework and knew that it was a fair price.
We compared other houses on the other side of the hill to our house. In the same price range, ours was cleaner, needed no work, four bedroom and two bathrooms and in a very safe neighborhood. We decided to buy it. The former owners took our lot as a down payment and we were able to get $10,000 for it.
The mortgage was $435.00. Ten dollars more than the rent! With taxes and insurance, it was a monthly payment of $552.50.
I remember that we were also buying a used Porsche at the same time. We had to come up with around $5,000 within two weeks. Michael kicked into gear, sold another car and called several people who owed him money. He did it.
After paying for the closing costs and the final papers were signed, we were broke. We began again.
Six years later, we sold that house for $125,000. My dad was shocked.
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