Investor · New York, NY · Member since 2020 · 4 posts · 1 vote
If you are like me (motivated, inspired, and looking to get your first deal done), I’m sure you have been overloaded with information and questions. Will there be a housing market crash? Will house prices drop in the next 6-12 months? What about the unemployment bubble? Should I just jump in now? What if I get in now and then I get burned because of timing?
My gut is telling me to just take the calculated risk and get in! Sink or swim. I’m a newbie but I’ve done my research and analyzed a market that seems like it will work for me. I’ve done my prequal and have what seems to be a solid agent that work with investors.
Do you think I should continue on or wait to see how the market continues to react to the pandemic?
No one knows what is going to happen and it will depend on the local market and type of home you buy. Assuming you are buying as a long term rental and are going to hold it long term, buy a house where the numbers make sense. Don't worry about the sales price down the road as you have no control over that (well asides from the obvious of keeping the house in good condition). Where I am, houses are selling faster than they were last year at this time now that thing are slowly opening up.
No one knows what is going to happen and it will depend on the local market and type of home you buy. Assuming you are buying as a long term rental and are going to hold it long term, buy a house where the numbers make sense. Don't worry about the sales price down the road as you have no control over that (well asides from the obvious of keeping the house in good condition). Where I am, houses are selling faster than they were last year at this time now that thing are slowly opening up.
Investor · Lakeland, FL · Member since 2017 · 1k+ posts · 1k+ votes
6y
None of the concerns you mention really matter at all for a rental, as long as you think your rental rate will hold up. That really reduces the number of variables for you. The reason is, once you buy, (most) all your expense numbers are fairly fixed (principle, interest, taxes, and insurance, repair reserve). Yes the taxes and insurance can flex over time, but usually aren’t deal breakers. As long as you buy a house that has a good cash flow you have little to worry about on those other external concerns.
The biggest risk is getting your numbers right... don’t buy a marginal property with $100 a month cash flow... find a strong property that will give you $300-$400. They are out there. Buying right is really important. Find someone to run your numbers with you. If you have another (More experienced) real estate friend in your town, have them walk the property with you. Getting off the fence is a great feeling! You learn so much more when you are in the game!
If you're worried about a potential market crash, I would advise making the leap a little bit easier by doing a owner occupied with an accessory apartment. If you have good credit scores (680 or above) there are a couple of different 3% down programs such as home ready or home possible that can make it cheaper than renting. I've helped a couple of my friends do this and on average they are paying about $400-500 per month in addition to what they collect from rent. This is about half of what they are used to paying in rent.