Updated almost 11 years ago on . Most recent reply
Saving for first time purchase
Hi all, I am new to the forums but have been browsing the site now for a couple months. Hoping to get some opinions/advice on a question I've been mulling over.
Over the next 15 months I will be saving for the first time purchase of a home (owner occupant, 3 flat). From what I have read, I will be able to take $10,000 out of my IRA as a one time distribution towards a first time purchase. Awesome! So I'm looking to raise another $10,000 towards a down payment.
Here's my issue; currently I have about 10k in student loans that I am paying off at about 5.5% interest. My question; do I try to pay these off as aggressively as I can, and first pay these off before saving towards that down payment? (I figure I cant get 5.5% in return on savings). OR, do I just make the minimum payment on the student loans and save the remainder of my excess money towards the down payment?
Any help is appreciated!
Most Popular Reply
Personally What I would do is look for a "steal" of a property.....buy short sale, forclosure, etc etc something that you will gain equity the day you sign the papers.......bring the property up to value.....cash out refinance....pay off your student loan with the profit.......and have the property properly leveraged and cash flowing moving forward.....
Don't be afraid of rehab...i did my first two years ago....bought a property for about 50k under area comparbles.....put 15k in carpet, paint, counter tops, new light fixtures, doorknobs and such.......refi'd got my money back,and increase my net worth by 35k.....
My mentality now is "why ever pay retail again"