Should I buy?

**suraja** · 04-19-2009, 08:39 AM

I am 33yo. I have zero debt. I have a secure job making 60K gross. I live in San Diego. My fiance is the same so we have a combined gross of 120k. We are frugal and live on less than 30% of our income, all costs included. We are looking to spend $200-$250k on a 2 bdrm condo, or small cottage. The only catch is that in about two years I will be going back to school - which will take two years and require us to move. The upside is that I will be be making 120K gross at that point..
I know the safe thing to do would be to wait until I finish school. However I was thinking that since we will have to pay rent for the next two years while we're here, we could buy something well within our means, and then rent it out when we temporarily move away for school. My fiance would still be working and I would be covering my side of the costs with school loans.
I've not an impulsive person and have always been very good with my finances, but it seems like it's a pretty good time for a first-time buyer so I would like to take advantage of that.
Thanks for any input you might have.

**houston** · 04-19-2009, 07:37 PM

I don't know your market but with that said this is my advice. I would buy a duplex over a condo. First off your monthly payment for the next two years should be lower. Second when you move if you cant sell its more likely your cashflow (rent - mortgage) will be better with a duplex.

**Greg** · 04-20-2009, 05:24 AM

It sounds like you have thought this through and it looks like a very smart plan. With real estate prices as low as they are you will not be making a mistake.

Just make sure you put a lot of thought into the actual purchase.

Good luck.

**jamesww** · 04-20-2009, 11:58 AM

In addition to what Greg said I would add that you should bank the tax credit to make sure you have the cash on hand while you are in school for any maintainence items that could come up and to meet the short fall in difference in keeping up the property and the rents. The guy from Houston that told you to buy a duplex is obviously does not know much about any market other than Houston. Condos do not appreciate well in Houston and the maintainence fees can be rather high. This is where his answer comes from. In your neck of the woods it would be difficult to find a duplex that has not already been converted to condos. So, you would likely end up over paying for a duplex rather than it being a good buy.

**REITrainingWhse** · 04-22-2009, 12:17 PM

Originally Posted by suraja

I've not an impulsive person and have always been very good with my finances, but it seems like it's a pretty good time for a first-time buyer so I would like to take advantage of that.
Thanks for any input you might have.

suraja... This is an excellent time to buy, and it is good that you are not impulsive, because emotions can cause you to buy something that would otherwise cause you to pass.

First, remember, that RE is just that, RE. Then remember that profits are made when you buy, and realized when you sell, so when you think about a property, make sure that the upside is there. What drew you to the property, and will others want the same thing? Is the layout good, are there high-demand amenities on the property? Is there "bad things" with the property, and can they be easily fixed? You want to make sure that you get into a property that can be easily sold.

Next, shop around. There are countless number of motivated sellers out there, if you can't find one, you are not looking. You might walk into your next house with nothing down, and all you need to do is assume the mortgage payments. (I have done that numerous times!) If you think that people don't just give away homes, you need to look at things differently, because people do all the time! I often wonder why so many people are renting, when there are soo many houses out there ready to be taken for little to nothing!

Well, I think I have got you thinking.

Have a good one!

Michael Suess
The REI Training Warehouse, LLC

**aedsys** · 04-23-2009, 01:56 AM

i think this is the best time to buy the property because the prices will rise when the real estate market will get better.

**REITrainingWhse** · 04-23-2009, 04:50 AM

Personally,

I don't know of a bad time to buy... There are deals out there when things are cold and when things are HOT. It is not a matter of looking at RE the way MOST people look at it (RETAIL MARKETS) but where a deal can be made.

To modify a phrase, from the 6th Sense... "I see motivated people."

Until you change the way you think, and understand that sometime people need to sell, you won't see the diamonds that lie in front of you.

Oh, enough preaching...