Mr. W, his son and I tried to catch the 9:30p showing of The Simpsons Movie earlier, but the tickets were sold out. I thought of college roommie Diana, who watched the premiere of the movie as a company-wide activity with her law firm, and I lamented the day I decided not to go to law school. What I do not lament, however, is the fateful day in 8th grade when I decided to take German as my foreign language, because that got me and Dwaine in the same class for the next 5 years, where we became friends. After a brief financial discussion over the phone with Dwaine earlier today, we decided to meet up tomorrow so that he could crunch some numbers for me. The goal: sell my current home, throw the money into investment property that I will live in for now and rent out later for supplemental income.

Whereas the original plan when I bought the house was to live in it until I decided to put down more permanent roots in a more palatable part of town and at that time rent out the first house, I had been growing increasingly discontent with my association’s lack of competency in handling financial matters. So the new plan is just like the old plan but with the added step of upgrading the future rental property. I figure if I buy a townhouse near a major university, I will always have renters, and assuming these renters are students, it would be a high turnover rate so that I can keep increasing rent to just below the growing cost of dorming. If I have a bad tenant, it’d only be for a year or so. Short-term-wise, I can avoid being taxed on the profit I make on selling the current home by reinvesting it into another primary residence, so I just have to live in the new place for the minimum required amount of time. And then I move on with my life and get a new place if I want to, renting out the school-side property. I’m looking at the new developments in Irvine, near University of California, Irvine. Orange County is quickly growing as Southern California’s version of Silicon Valley, so property there is bound to increase in value. Plus, with foreclosures at an all-time high, Dwaine is going to look into foreclosure and short-sale properties for a steal.

I don’t expect to have the kind of miracle housing experience I had with the first purchase, but I may be able to keep the same profit margin renting out the new place as I would in renting out the current place. When I bought the place I live in now, it was right before the housing market went crazy, so the price was already reasonable. And then, because the seller was desperate to sell (their new house had to close and their buyer for their current house, the house I got, fell out of Escrow and abandoned the purchase) during the Christmas holidays when no one was looking for housing, my realtor gave them a lowball offer which they countered and we came to a very nice compromise for me. I got decent interest rates at 6.75% for a 30-year fixed mortgage, and two years later, the housing market skyrocketed, interest rates dropped, and I refinanced at 4.875% for a 15-year fixed mortgage paying only $200 more a month than the original 30-year. People hated me enviously. But the situation now is a little different — interest rates are higher which means the housing market is about to take a fairly significant dip. I want to sell now while the market’s still high on my house and I can make triple what I originally paid for the place, and if it means I need to hold off just a tad for housing to drop so that I can buy the next one for cheap, then so be it. I can move back in temporary with my parents, or even with Mr. W. It is scary to step out of the property game altogether, though — a lot of people sold their houses when demand was high a few years ago, thinking that at any time, the housing prices will drop back to “normal” and they can take all their newfound money from the sale of their house and put it into a much bigger house. Well, that hasn’t happened and years have gone by and some people are still renting, which to me is just throwing money out the window. So I am facing that kind of a risk if I don’t do a simultaneous sale-purchase. Not that I’ve ruled that out, either. It all depends on what the numbers tell me tomorrow.

That’s why I’m glad I chose to take German way back in ’90. Cuz 17 years later, I am overwhelmingly grateful for my connections. “See, where would you be if you’d chosen to take Spanish?” Dwaine said on the phone earlier.