Hi, I'm a newbie to this forum so please be gentle.
I've always had a fear about investments, mainly because you'd "lose" money now and won't see the profit until much later. Given that I don't have much to begin with, plus my debts, it's a bit hard to let go of any significant amount. I'm willing to learn and change though. I'd like to learn about how to move up the housing "progression".
I just recently got married, and my wife and child live with me in a small 2-bedroom apartment with a monthly rent of $740. I bought a brand new car a year ago and still have 5 years to pay it off. We are a single income family. I also owe about 18K in credit cards and school loans combined. I do have excellent credit though. Up until the wedding, money had been extremely tight. Any "extra" at the end of the month went towards paying off my credit card (stopped using my cc a couple months ago to keep it from getting any higher), so my checking account pretty much stayed roughly around the same amount for years now (a laughable amount under 10K). Now that the wedding is over, we might have a little more to save or invest perhaps.
I want to learn how can I prepare and progress from an apartment into owning a townhouse or small house and move into bigger housing every few years. Given that we don't have much money, a decent down payment for a house would probably take 1-2 years to save up for. However, even with a down, we may not have enough for other kinds of costs of moving into a home. In short, I really have no idea what I'm doing or what should I be doing...
Any advice on how we should go about things? Thanks.
You have several options:
1) Learn how to do an assignment of. This is where you get distressed property or distressed seller under contract and assign the contract to a cash buyer for an assignment fee. Typical assignment fees will vary from $2000 to $15,000+. However most assignment fees are $5,000. This will allow you to make money with no money out of your pocket.
2) Purchase a home with owner financing. If you go on craigslist.org and type in "owner financing", then you can normally find properties that you can purchase without the bank's approval. After owning the property for 6+ months, then you can normally refinance the property at a better interest rate.
3) If you are a first time home buyer, then you should qualify for an FHA loan that only requires a 3.5% down payment. If you are having trouble coming up with the down payment, then you can look for down payment assistance programs. Not sure if they have that in West Virginia, but where I live they have http://www.calhfa.ca.gov/ where they can help you with up to 3% of your down payment. This means you would only have to come up with 0.5% down payment. Let's say the property is worth $200,000, then you would only have to come up with $1000 to get into the house assuming the seller paid the closing costs.
Hope this helps. Good luck!