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Buying Real Estate Solo: Investment, Not a Capitulation

June 17, 1988|SUSAN CHRISTIAN | Susan Christian is a regular contributor to Orange County Life.

It was an instance of life imitating art--if you can call a crudely drawn cartoon character art, that is. "Cathy" happened to be house-hunting in the funny pages at the same time Barbara Griffith was house-hunting in the classified pages.

Adding to their similarities, both women are spunky, thirtysomething, independent and single. The only major difference between them is that Griffith has a 10-year-old son--plus "Cathy" is fictional, insofar as she can be distinguished from creator Cathy Guisewite.

So Griffith could relate to "Cathy's" humorously expressed concern that settling into a home sans husband would mean never having to say "I do."

"On the wall behind my desk at work, I have a 'Cathy' cartoon, where a Realtor tells Cathy, 'Oh, I see, you gave up,' " Griffith said with a laugh. "That's sort of the way I felt--that I'd given up. But you can't sit around waiting for someone to come along on a white horse.

"However, I'd be happy to share my little house with the right person."

Like thousands of other single people in the county, Griffith decided that she is "sick of throwing money away on rent" and took a solo flight into the intimidating world of escrow.

"We have more and more single clients," said Steve Stovall, president of A Neighborhood Emporium, a Century 21 franchise in Fountain Valley. "Today 15% of our clients are single, compared to less that 5% five years ago."

"I didn't think I'd ever be able to buy a house," Griffith, 32, wrote in a letter to Single Life. "My salary as controller for a country club is good, but after rent, car payments and child-care expense, there wasn't much left to apply to a down payment.

"Then in early 1987 I fulfilled a lifelong dream after winning $8,500 on 'Jeopardy.' I accumulated enough to purchase a two-bedroom house with a large country kitchen."

Griffith self-deprecatingly attributed her success on "Jeopardy" to a "mind that's full of useless information."

"My winnings gave me a big jump on getting together a down payment for a house," she said. "I was tired of sharing apartment walls with strangers."

Griffith's scope of possibilities was confined to houses in the under-$130,000 price range--a tall order in Orange County.

Yet she steered clear of "fixer-uppers": "I'm not a handyman. Not having a husband, I needed a house that wouldn't require much work."

Rigid prerequisites and all, Griffith eventually unearthed "the perfect home"--just a few years old and in good condition--in Rancho Santa Margarita. "I fell in love with it the second I saw it."

Griffith said the tax write-off almost reduces her house payments to the cost of monthly rent.

"When you take into consideration the tax advantages, I'm paying about $900 a month, and I was paying $750 to rent," she said.

The only regret Bruce has about buying a house is that he didn't do so sooner. "If I'm ever reborn, I'll buy earlier," he vowed.

Two years ago, Bruce became the proud owner of a three-bedroom house with a swimming pool in Buena Park. "It also has an enclosed patio and two fireplaces. All this for $125,000," Bruce, 38, wrote Single Life. "My net house payment, with tax deductions, is less than my rent was.

"When I saw my first tax refund, it all came home to me. If you don't buy your own house today, you're nuts.

"It's scary in the beginning; a house is the biggest purchase most people will ever make in their lives. But as soon as you adjust to the payments, the whole thing becomes a piece of cake."

"Real estate is such a solid investment," Century 21's Stovall said. "In 1986, my wife and I bought a house for $285,000. If we put it on the market today, we could attain $410,000. Where else can you get that kind of return on your money?"

But although the purchase of real estate is, in general, a reliable investment, financial planner Ron Gable said he does not advise it as a matter of routine to every financially able single.

"You have to look at each case individually," said Gable, a consultant with Financial Analytical Services in Fountain Valley. "If you come to me and say: 'I have $20,000 to invest. Should I buy a house?' I want to know a few things about you before I make that recommendation.

"Suppose you have the goal of moving to a bigger company in another city within the next two years; you might not want to make a commitment to a house. Getting in and out of a house is not easy.

"So I'd ask you about your job security. I'd ask if you're happy with your occupation. I'd ask if you're planning a change of life style, such as marriage, in the near future.

"Money in real estate is not money you can call on in 20 minutes or even a few days. So I'd ask, 'Are you willing to sacrifice some of the luxuries you have, such as expensive vacations?' "

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