I have friends that are looking to buy a townhome in Destin FL and asked me to look at their financing options. Besides the loan, more importantly, I want to make sure they’re buying right.
This is a property which will be used several months of the year for vacationing. Remaining months will be leased out. Values have come down quite a bit over the last 1.5 years; at one time worth $600k now comping around $450k. Owners have not listed yet so there’s probably some room to negotiate down.
My concern though is that they’re buying at almost full retail price in a market that could potentially still have heavy declines. I’ve discussed with them the idea of buying short sales or foreclosures which would be discounted. In doing so it would protect them in some capacity form being over leveraged.
Being buyers out of state makes it difficult for them to really know the area and inspect potential properties. Over a recent couple visits they had an opportunity to look at some foreclosures and discuss short sales with an agent. They don’t like the idea of having to put any work into the property. The townhome seems to be their “dream home” and maybe even be an emotional attachment already.
Any suggestions for getting to know the Destin maket beside speaking to a biased agent? Any thoughts as to whether or not we’ll see further declines there?