Buying Your First Home

If you've been considering a first-home purchase, and you're feeling pressure to ACT NOW because the $8,000 tax credit is expiring in November, how do you know if ACTING NOW is the right thing to do? When you're talking about Ruidoso, NM, you're talking about a special set of conditions, so you can't apply New York wisdom here. Here are some questions to ask yourself when you're considering a first-home purchase in the Ruidoso area.

Can you get the loan?
Many people hesitate to even check their credit score because they fear the horror. But you need to bite the bullet and take a peek; it might not be as bad as you think. You really should review your credit reports (it's free once a year at http://www.annualcreditreport.com/, no strings attached). If there is anything ugly there, attack it, exterminate it. If your score is merely mediocre, don't sweat it. Just get your financial info together (pay stubs, W-2's and tax returns for two years, bank statements, etc.) Call a mortgage broker or try a company like Quicken Loans (that's the company I used and they were awesome). Find out for real if you can get an FHA loan. This is the best loan for first-timers without much cash on hand. You only need a mediocre credit score, a reasonable debt ratio and a steady income. The mortgage broker will tell you how much money you can borrow. Talk to a Realtor you trust to determine how much house you can buy. (There IS a difference.)

Do you have the money?
FHA loans require a minimum down payment of 3% -- that's only $6,000 for a $200,000 house. That's just the beginning of your costs, though, so don't think you can get it done with just 6 or 7 grand. After all the loan fees and closing costs, the actual upfront cost of buying a home can be twice the amount of the down payment, easy. So if your cash is tight, look for a little more help. Check out the programs offered by the New Mexico Mortgage Finance Authority. They offer all kinds of down payment assistance, mostly in the form of grants or loans that automatically are forgiven after a certain number of years. They even offer a program that lets you borrow against that $8,000 tax credit, so you can put that money towards down payment or closing costs, if need be. However, don't use that loan if you don't have to. You're going to get that money no matter what, and it can really come in handy for the costs of new homeownership, for they can be mighty. Talk to your mortgage broker and your Realtor about ways to save on your closing costs; i.e. sellers are often willing to pay some of the buyer's closing costs. The USDA also offers loans and loan guarantees in Lincoln County; click here to check your eligibility.

Do you have the earning power?
Perhaps the iffy-est thing in today's economy is job security. The Ruidoso job market is mostly restaurant, lodging and retail. The economy is driven by tourism, which is as fickle as the weather. Even in the high-paying professional sector, people have moved here and bought a house because they had a great new job, only to be burned. Things happened, and when the wind changed, that great job was extinguished and they were left holding the mortgage bill. It's a risk you should be aware of, even though there isn't a thing you can do to make sure your job will be there tomorrow. Best you can do is be prepared to tighten your budget and take whatever job is available until the wind changes again (and it will). Ideally, you could mitigate this risk with your savings and by buying equity in your home with a large down payment. If your financial situation is less than ideal, though, you can still take a shot at improving your future by buying a home.

What are your intentions?
If you don't intend to own this house for at least 5-10 years, maybe you should rethink the idea of buying. Even if you don't plan to live here that long (but you don't want to rent), you should plan to own the house for at least 5-10 years. One of the benefits of buying in Ruidoso is that if your situation changes and you leave town, you don't necessarily have to sell your house. The rental market is pretty good (remember: every renter is paying a landlord's mortgage), and the nightly rental business can actually take you past break-even and into the profit zone. So it's pretty easy to make a long-term commitment to the right property. The other benefit of buying in Ruidoso is that even when the market is "down," it's not really down; it's just dormant, sitting in a doldrum, waiting for the wind to change. That's how it is right now; take advantage of it, buyer.

Beware of Deer!

The Ruidoso News ran a story today warning dog owners to beware of does protecting their young -- see Dog owners advised to beware of angry deer for full story. My coworker tells me that deer charge her dogs all the time. Well, I've never seen it; but then again, I don't let my dogs run after deer (or anything else). Still, I have once or twice found myself face to face with a deer of questionable intentions. It makes me nervous when they don't run away.

When I lived in Country Club Estates, near Village Hall, there was a buck who liked to take late afternoon naps in a neighboring front yard. More than once we would come upon him as we took our walk, often with dogs in tow and on leash. He never ran from us. He seemed entirely nonplussed by the dogs and by us. Sometimes he would stand and just watch us. I always wondered what he was thinking. Had he decided to charge us, we would surely be dead, or at least seriously injured.

It's funny to think of "Bambi" as an aggressive animal, but the testimony says it all. From California to the New Mexico mountains, encounters with attack deer are commonly reported. So next time you're strolling around The Links and you come near a placidly grazing doe -- she may not be as gentle and harmless as she looks!

The Ruidoso Twittersphere

Are you a local? Wouldn't it be cool if you were following local informers and friends who would Tweet when there was a traffic jam on Hwy. 70, or when gas prices were going up on the east end of town (soon to be followed by the rest). I'd love to get Tweets on a Friday night about what bands are playing where. I'd also like to keep track of hot deals, pending offers and other news in the real estate world. If you're using Twitter and you live in Ruidoso, let's get in Twitter touch.

Are you a regular visitor? Would you be interested in updates, tips, reviews, etc. from the locals and other visitors? We need a Ruidoso Twittersphere, where you can shout out a question or make an announcement. Ruidoso Tweeps are growing in number, and there are many useful resources and informers getting their word out with Twitter. If you're in Ruidoso, or just into Ruidoso, follow Ruidoso Tweeps who are offering the updates that interest you. You can get started by checking out my profile (see widget at right) and seeing who I follow.

You can also search Ruidoso on Twitter to see what everyone's saying right now ...

Ruidoso is poor?

How do you make $1 million in Ruidoso?

You come in with $2 million.

Well, that's the old joke -- but it's not all that far from the truth. Being successful in business here takes planning, capital and a serious commitment.

In a recent letter to the editor, a local reports on a conversation overheard in nearby Roswell. The ladies were discussing recent business closures here, and one person said, "The problem with Ruidoso is that it is so poor." Hmmm... very interesting observation. Unexpected.

Wonder exactly what she meant. Did she mean the Ruidoso economy appears weak? Did she mean that most people working in Ruidoso don't make more than $28,000/year? Did she mean that business people just don't have enough working capital? Don't know, but here's my take on Ruidoso's finances.

Relatively speaking (relative to many New Mexico communities), Ruidoso ain't poor. The problem, I guess, is that the money is mostly not owned by the people who live and work here year round. It belongs to the people who live here part-time and work elsewhere, or those who have retired here, or those who are just passing the time here. This situation is typical of a resort community.

As for the working capital of business people... Many Ruidoso businesses have been successful for more than 20 years. But as this is a tourist town, it is not unusual to see to businesses survive for only a few years, to be immediately replaced by new businesses. This rise and fall does not indicate a problem with the economy, in my opinion. It reflects a business attitude typical of small resort towns, the "I've always wanted to own a little boutique (or cafe) so I'll just hang a shingle and see what happens, just for the fun of it." Nothing wrong with that, but businesses like that are short-lived.

The ladies Mr. Greenlee overheard specifically mentioned the closing of Pasta Cafe --however, Pasta Cafe has, in fact, been sold and is being turned into an Irish pub. Hey, at least it's not another Mexican food restaurant!

Back to Basics

This post is a little tangential to the topics of real estate and living in Ruidoso, but I have to get it off my chest. What's happening to Americans' ability to write and speak English correctly? The adverb is nearly disappearing from speech and highway signs -- as in the Texas slogan "Drive Safe." (should be "safely"). And 99% of Internet writers seem to have no grasp of the difference between "then" and "than" or between "your" and "you're."
I know some of you are rolling your eyes now, like "What difference does it make?" Well, I think it makes a big difference. It's not only a matter of knowing English, it's about having a command of the language so you can say what you mean and mean what you say, just like Horton. Without a sufficient vocabulary and a command of basic grammar, our communication skills suffer. And God knows, if there's one thing we need in the Information Age, it's the ability to communicate our truest thoughts and feelings in the most accurate and meaningful way.
So what prompted this little rant? Sugar Ray Leonard gave the wrong answer to this question: In the following sentence, which word is the verb? "Are you smarter than a 5th grader?" The correct answer is "are." What was your answer?

Harry Potter and the Small Town Theater

One of the things I've forgotten about big city life -- waiting in lines. Whenever I'm in a city, it seems I spend half my time waiting. Going to dinner and a movie takes all night. You battle traffic and sit through lights. You wait for a table at a restaurant, then you wait in line at the theater. Some theaters even herd crowds from ticket booth to a waiting station before releasing you to access the concession stand and enter the movie theater.

In Ruidoso I rarely have to wait in line. Last night I went to see the sixth Harry Potter movie. It was a 9:15 showing. I left my house at 5 'til 9, arrived at the theater at 9:13. Got my ticket, my popcorn and a Coke, and I was in my seat before the previews were done. Had plenty of elbow room, too. Now, you can't do that in a town like Albuquerque or El Paso. It was like my magic wand cleared all obstacles before me.

Same story when it comes to restaurants. Whenever I'm in El Paso, I'm always frustrated with the fact that going out to dinner means waiting around at the restaurant for a table. Sometimes you sit around for an hour, sometimes you get lucky and the wait is only 15 or 20 minutes. 15 or 20 minutes! In Ruidoso, we walk into our favorite restaurant and they seat us. Unless it's an extremely busy weekend at the height of ski season, there's no waiting (and the locals don't go out to eat on the busy weekends). You'd need Hermione's gifts to get a table so easily in most cities.

I've gotten so spoiled by our small town that I get grumpy when traffic is heavy enough that I have to actually wait to make a left-hand turn or flip a U-ey in the middle of the highway. I like it when I can stand in the middle of the road and talk to a friend who has stopped his vehicle (in the road) and we won't be in anyone's way for a good 2 or 3 minutes. It's just one of those magical small town qualities, like calling up the room of requirement at Hogwart's. Around here you don't have to be Harry Potter on Liquid Luck to make an evening roll smoothly; that's just the natural state of things.

Investing in Real Estate

For big players, investing in real estate can mean putting money into a Real Estate Investment Trust or some other company that allows you to buy interest in shopping malls, developments, and the like. For some people, it means buying one or more rental properties, possibly with plans to eventually retire to that income property. Ruidoso is one of those special markets, a bubble in the current mayhem of the general economy. Managing risk here still plays by the old rules: do what common sense tells you to do. The chances of being ambushed by a sudden plummet in property values are pretty slim, as evidenced by our market's relative stability so far through this recession. Here, it is possible to invest in an income property and feel relatively confident that your investment is secure.

Here's a perfect example of a great property that makes a fine income property. This condo in Alto Mountain Village is a 2/2 upstairs, a 1/1 downstairs. Each unit has its own entrance and ammenities, including laundry hook-ups and gas fireplaces. It's in a wonderful location, surrounded by forest and outside of Ruidoso Village limits, where the water bill is typically much lower. Low monthly fees, great location, a proven income history -- this property could pay for itself and still be your private mountain getaway. You could use one level as a nightly rental, keep the other completely private for your own use. This is really handy because most owners of nightly rentals don't get to use their own property during the most popular holidays, such as Christmas, because they need the rental income from those major dates.



I have never seen another condo that contains two completely independent units, plus an oversized single car garage and all the ammenities of condo life (including a swimming pool and optional onsite management of your rental). This one's a real winner, and it's priced well below any other condos less than 10 years old.

Want to invest some money and see a real return on it over the long term? Crunch the numbers on this Alto condo, and let your nightly guests cover the costs!

Check out this cool investment property calculator at GoodMortgage.com.