Is now a good time?

9 Replies

I have 6k cash and live in Mesa, Arizona the greater Phoenix area and I want to jump on board and buy and hold. I don't have much, but I'm not looking for much. Should I buy a condo near ASU? I cannot rent out an fha loan. How do I do this and where do I start?

Originally posted by @Andrew LeBaron :
I have 6k cash and live in Mesa, Arizona the greater Phoenix area and I want to jump on board and buy and hold. I don't have much, but I'm not looking for much. Should I buy a condo near ASU? I cannot rent out an fha loan. How do I do this and where do I start?

Great question;

You should research buying a duplex with an FHA loan, 3.5% down, and renting out the other unit. This would fit your situation nicely.

Originally posted by @Andrew LeBaron :
I have 6k cash and live in Mesa, Arizona the greater Phoenix area and I want to jump on board and buy and hold. I don't have much, but I'm not looking for much. Should I buy a condo near ASU? I cannot rent out an fha loan. How do I do this and where do I start?

your 2nd home will require at least 20% down in Houston. I don't know how thing are in Arizona. Make sure you have enough cash reserve after the deal because issue WILL come up UNEXPECTEDLY. you need the cash to deal with it. You can count on credit card as well but it's more dangerous.

Thanks! and congrat on your 1st post

@Andrew LeBaron

Multi in Mesa

Check out that link. That place is tight, but might work for you. I don't know how much closing costs will be out there, but I believe you can ask for up to 3.5% towards closing costs when financing with an FHA loan. (http://www.fha.com/fha_requirements_closing_costs )

With a roommate on 1 side and fully rented other side, you should be able to live for free AND put a few dollars in your pocket each month.

Also Look at:

http://www.hudhomestore.com/Home/Index.aspx

https://www.naca.com

http://www.homepath.com/

All of those sites are designed to get people into home ownership. 6k should be enough to do everything you'd like.

6k down at 3.5% on a fha will put in the neighborhood of 171k purchase price. You must still account for closing costs or any other out of pocket expenses you will pay. A physical inspection will generally run from $250-$500 Negotiate for the seller to pay asmuch (if not all) of your closing costs. For every $500 you have to take out of your down payment you loose $14200 in purchase price. I don't know prices in your area but I would think you could get a duplex in that price range. If not, you could look into the fha 203k loan which would allow you to purchase a property in need of repair and wrap in the rehab money with your mortgage.

yes you can rent out the other side as long as you are occupying the property (living in the other side) you would not get in trouble because you are complaint with the fha rule of the property being owner occupied.

I can't recommend what to do as everyones personal situation, financial situation, and risk tolerance is extremely complicated. You have to evaluate all this to come up with your own plan. I see that your a newly wed so you have to account for your wife's standpoint aswell. Is she ok with the idea of living in a duplex next to tenants? I personally think the small owner occupied multi-family is a great way to get started in investing. However my wife hates the idea of a duplex and living next to tenants so it's not a viable option for me. If it is something that works for you, you must account for all expenses that go along with the property and budget accordinly. If you stick all your cash into the purchase will you be ok financialy if it stays vacant for 2 months or more? Could you fix any problems that may come up? There is a lot to consider but I hope it works out for you! Don't get scared away from doing what you want to do just make sure you know what your getting into.

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