Buying first property, need some help

General Real Estate Investing
1

I’m 20 years old, looking to buy my first house (To live in, and eventually rent out). I’m eligible for a VA loan (1 year in the Air Force), but even though I’m “Pre-approved” for a loan, I have a feeling they’ll deny the loan last minute if I go through with it, since I don’t have 2 years of job experience in one field, which they said could keep me from getting a loan. Dealing with banks and brokers is giving me a headache, and I have a feeling they’re going to screw me last minute. I’d prefer to skip the banks if possible, at least until I have a more solid employment and credit history and feel more prepared to secure a loan. My credit’s not bad, but just being so young I don’t have the stability that most banks want before approving someone for a loan.

I started looking at FSBO homes, and found one that looked promising. 73k for a 2 bed/2 bath condo, 1173 square feet in Veags.

The bad:
Not the greatest condo or the greatest neighborhood.
Currently the market rate for those units are about 50-60k, and he’s asking 73k.

The good:
He owns the condo outright.
If I bought it I’d be eligible for the tax credit (Roughly 7k).
He’s willing to finance it for a couple years until I refinance it through a bank loan.

If I did buy it, he’s flexible. He’s willing to let me put down 3-4k, then put down maybe 2k after I get the tax credit back. He’d want maybe 600-700 (Not including association fees) per month while he financed it, then when i refinanced it would be either 400 or 550, depending on if it’s a 30 or 15 year loan.

Does this sound like it may be a good deal? If he’s not willing to budge on the price is it still worth it? Also, is it a good idea to consult a real estate attorney to draw up the contract, or should I do the research and do it myself? Just wanted to see what you guys think.

I have been reading up quite a bit on real estate, although being a first-time home buyer I’d still not entirely familiar with the process. I know I’d have to get an appraisal and inspection, but does anyone have any guide or can provide me with a little more info on what order to do everything in? Any recommendations on a source for what contracts I’ll need? Is it required to have insurance for the first year to cover appliances?

I don’t want anyone to hold my hand, but after reading book after book on real estate, I feel so lost going through all the information that now that I’m actually trying to buy a house, I have no idea what to do or what order to do it in.

Thanks in advance for any help.

2

I know this may not be the answer you’re looking for, but don’t force the issue. If you cannot afford to buy right now due to job experience and difficulties getting approved for loans, wait. Let time work its magic and build upon the things you’re lacking now. The way I see it, you’re not only NOT buying at a discount, but you’re buying at a premium in a market that is dismal, so who knows where the price of homes will eventually settle. You can kiss that 7k goodbye since you’re already overpaying by more than twice that amount. You will be upside down on the home from the minute you sign papers…

I’d suggest just waiting. I know it’s difficult and you feel like you’re missing a great opportunity to do ‘something,’ but we make our largest mistakes when we act hastily, even more so in the business world. You’re young, and trust me the market and the deals are not going anywhere ANYTIME soon.

3

Good to meet you

REI_Chris is right wait.

A GREAT deal will fall into your lap…

Good luck

Michael

PS… Thanks for wearing the Uniform and your willingness to die for those you don’t know to protect our country.

4

Great advice here by Chris & Michael. At your age, it’s easy to feel like you should be doing “something.” When I was about your age, I thought I was about the age where I should get married. So I did. I was young and made a VERY BAD AND COSTLY MISTAKE. I’m now several years older and VERY happily married to a wonderful woman who is my best friend. I should have waited. You should wait too.
There is no reason to pay above market value. Never a good idea in general, but especially now. There are no bidding wars out there now. There is a HUGE inventory especially in Las Vegas. The market there has been decimated by foreclosures. Vegas is near the top of the list nationwide for that. Keep looking. You’ll be very sorry if you get this condo and know that you overpaid for it.
Nothing about that deal looks promising as you said.

5

When you DO buy, think about getting a duplex or 2-on-1 lot for your first place. You will then be a landlord with all the benefits of having your tenant help pay off your mortgage.

There are plenty of threads on here on how to do that. You are may ahead of the game just by being on this site.

Furnsihedowner