Owning my first home

[PSYH]

Thanks for all the input and help guys, I really appreciate it. Please keep them coming!

Putting an additional $15-20k into an older house just to make it more, for lack of a better word, updated is what I'm afraid of. The thing is I don't think I can afford to do that after the down payment and paying all the closing fees and whatnot. And then property tax, insurance, utilities, and mortgage will start eating away at my income like a fat mofo. And what about furnishing the place? This is going to be my first home, so I don't exactly have "existing" furniture. I don't need anything bigger than 1,500sqft (I'm not married and have no kids! lol) but even then it sounds like what I need to do is budget for all of these extra expenses, which is looking like a good $15-30k.

[Black Betty]

It seems you are beginning to understand just how expensive buying a home really is. It is always more than you thought it would be.

[g37rider]

Psych, in my opinion, it sounds to me what's most important to you is a brand new house, or one that's been built in the last 5-10 years to match your style. The problem is you're going to be paying a lot more than $15-20k to get that house in a nice location and from what you've said you don't have a lot of money. So, if you must have a perfect (or near-perfect) house, then you'll have to settle for the less desirable neighborhoods. The problem with that is you'll still be paying top dollar for the house and your investment returns are going to be minimal at best, and at worst you're left owing significantly more than the house is worth. This is what a large and growing number of Americans are facing right now and they're walking away from their brand new, spiffy homes with ruined credit.

What I and a few others in this thread are trying to tell you is to consider location a top priority. Settle for the house in a high-value area that needs a bit of cosmetic work, or as you call it "updating." That $15-20k you invest will only reap you rewards down the road. You never know what the future holds and you don't want to be stuck with something you can't sell without losing money.

[PSYH]

Thanks, that seems to be the best advice so far. It is definitely tempting to move into a house that's in "move-in" ready condition, but I see how that will screw me over in the end.

Let's just say I do find a fixer-upper in a good and desirable neighbourhood and I don't have the funds to do any updating in the near future. Is that a good idea? Why or why not? Or is it better for me to save up some more so that I can afford to do some renos (or buy furniture lol) after I close?

[da mayor]

Originally Posted by PSYH

Thanks, that seems to be the best advice so far. It is definitely tempting to move into a house that's in "move-in" ready condition, but I see how that will screw me over in the end.

Let's just say I do find a fixer-upper in a good and desirable neighbourhood and I don't have the funds to do any updating in the near future. Is that a good idea? Why or why not? Or is it better for me to save up some more so that I can afford to do some renos (or buy furniture lol) after I close?

I am closing on a move in home that is in pristine condition. I looked at fixer uppers but I just do not have the time since I'm at the dealership 55 hours a week.

I started looking at foreclosures in the beginning of my journey thinking they were great for a 10 year plan -- buy cheap and then sell high.... but after inspection after inspection they just aren't worth it.

I was going to buy this one which coincidentally is my own customer's old house. It's sad he went into foreclosure but a $700k house on the foreclosure market for $410k sounded good right? (see pics)




It needed about $60k into work b/c he trashed a few things.

I did not want to overextend myself on a first home and moved on... plus, I lost the bid so it wasn't meant to be.

The house I am closing on in 3 weeks is immaculate with a decent property, new boilers, new heater, only 15 years young.


just be patient and don't settle!

[g37rider]

You don't need to look for a fixer-upper. Those tend to be homes that need a significant amount of work just to make them livable. Ideally you want to find a small house that's in move-in condition with little repair needed, but that can use some sprucing up, e.g. new paint, landscaping, flooring, lighting, window dressing, etc. Those things can be done over time to your liking. There are even TV shows which feature minor, inexpensive makeovers that can transform a house.

As far as budgeting, you need to do your homework. Talk a loan officer (or good realtor) and find out how much you can afford to borrow based on your income. You'll probably need a down payment, so you'll have to account for that as well. When you've determined the maximum you're willing to put down and borrow, then you'll need to set aside money for basic furniture, i.e. bed, couches, dining table. Furniture doesn't have to cost a fortune. That's what Ikea is for - and there are also furniture outlets that sell quality furniture at a discount due to minor defects such as blemishes, scratches, etc. Lastly, find out how much you can set aside each paycheck for home improvement. If you can manage to put away a few hundred dollars a month, you'll have enough to start your first improvement in 3-5 months.

Originally Posted by PSYH

Let's just say I do find a fixer-upper in a good and desirable neighbourhood and I don't have the funds to do any updating in the near future. Is that a good idea? Why or why not? Or is it better for me to save up some more so that I can afford to do some renos (or buy furniture lol) after I close?