New to Phoenix. FTHB. Any referrals out there? Thanks!
Hi Everyone! First off, thanks for making this such a great community. It's humbling how many knowledgeable, supportive, and generally rad people there are on here!
I just moved to the area from N Idaho; I'm an RN in the ICU at Banner U, and I'm looking to buy my first home here. Prices are a little discouraging. Is it even possible to find something that meets the 1% rule? Anyone house-hacking? Curious how people make it work. Maybe it's better to wait and see if there's a 40% further downturn like some are forecasting.
With that, any referrals to an investor-friendly agent or wholesalers and/or general tips would be awesome.
Cheers guys!
Randall
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You can't time the market! Who knows where prices or interest rates will go this year. I bought my first property during the height of the pandemic and everyone thought I was crazy—but now I have a 3% interest rate :)
It sounds like you are in the PERFECT position to try house hacking. It's seriously the best and easiest way to get started in real estate. You could pick up Set for Life or The House Hacking Strategy to show you how—lots of great info and examples in there.
Also, you can find investor-friendly agents on Agent Finder!
@Randall Leese- thanks and good luck ..... are you looking to buy home as primary resdence or as rental ?
@Kaylee Walterbach True that. Thanks for the encouragement! Congrats on buying your first with such a great rate. That's awesome! I'll check out the links you sent. Thanks again!
@Dave Skow Thanks for connecting. Primary residence, but as a house-hack, probably will make it a rental down the road.
@Randall Leese- thanks for the clarification .....if you are trying to minimizer the down payment - consider either a conventional 3% down option or you also would have a FHA option as well with a 3.5% down payment option
Quote from @Randall Leese:Randall -
Hi Everyone! First off, thanks for making this such a great community. It's humbling how many knowledgeable, supportive, and generally rad people there are on here!
I just moved to the area from N Idaho; I'm an RN in the ICU at Banner U, and I'm looking to buy my first home here. Prices are a little discouraging. Is it even possible to find something that meets the 1% rule? Anyone house-hacking? Curious how people make it work. Maybe it's better to wait and see if there's a 40% further downturn like some are forecasting.
With that, any referrals to an investor-friendly agent or wholesalers and/or general tips would be awesome.
Cheers guys!
Randall
First thing I would recommend is take your time. Get to know the area. I used to be on the retail side of the industry and worked directly with homebuyers and homeowners (I am in the wholesale side now, meaning I work for a lender that brokers and lenders use as the lender to do their loan), and my advice to my clients was when you relocate if you're new to the area get to know it well and then start shopping, and find what you like.
Find an experienced real estate agent and lender. No part timers or friends. The more experienced they are, usually better, but the most important thing is understanding what's out there for you.
An advantage of working with a mortgage broker is they can work with a ton of different lenders, such as ourselves, whereas a lender may either sell direct to the agencies (like Fannie/Freddie), the FHA/VA, etc, or through lenders such as ourselves, but typically have one set of policies and may not be as specialized.
The lowest down payment options are going to be FHA or HomeReady/HomePossible - the latter 2 require you to be a First Time Homebuyer - ie one person on the loan has to not have owned a home in the last 3 years - since you specified that you're planning on buying your first home here, so not sure if you mean your first home in AZ, or generally speaking.
Easy way to start planning is like this - determine how much of a monthly payment you're comfortable with the high side including the mortgage payment (principle and interest), insurance and taxes - and if you buy a condo, townhouse or in a planned community, remember to account for homeowner's association dues. From there how much money in terms of actual cash you wish to use for the down payment and closing costs.
When you negotiate the price of your home, if the seller is unwilling to pay closing costs, hammer down that price and then have them raise the price say 3%-6% to cover your costs, prepaids, that are part of the closing. You will be way ahead financially doing so - simple example - while you'll pay a little more monthly as a result, do the math on how long it would take to recoup that cash outlay based on the payment difference, and you'll thank me for that!
Hey Randall,
First off, welcome to The Valley! You've come at the perfect time of year to enjoy the weather and entertainment Phoenix offers.
One thing I ask my clients who are considering house-hacking is if they are comfortable living with random roommates in a co-living environment or if would they like the privacy of their own space. If you are comfortable with random roommates, I would look into a property with a higher bed/bath count, live in the property and find roommates for the additional rooms to help cover your mortgage.
If you'd like your own space, consider multifamily. However, note that multifamily is quite competitive in Phoenix. A great alternative is a single-family home with a guest house. You may live in the guest house while renting out the main dwelling.
Referring to the Goldman Sachs report regarding the Phoenix housing market: Our median home price has dropped 65k(15%) since our peak in May 2022. On the flip side, January 2023 numbers show an increase in sold price per Sq/Ft. Showing the "bottom" could have been in December. Inventory continues to decline while mortgage rates also drop which is leading to more demand in active inventory.
I hope this helps! If you'd like to have a more in-depth conversation about the market and investing strategies feel free to give me a shout!
Manny
@Luis Somoza Thank you so much for your thoughtful reply! I really appreciate the advice coming from someone with so much experience. It's very encouraging.
It's my first home period -- I've never bought here, or anywhere else -- so the HeomReady/HomePossible option sounds great. I love all your other points as well: I'm going to aim for a high bed/bath count, and also get the ADU to avoid the unpleasantness or living with random strangers. lol.
Especially appreciate the advice about hammering down the price and calculating the difference between initial outlay and a higher payment with the long game in mind. I will definitely keep that in mind. Thanks again!
@Manny Bermudez Thank you so much! I really appreciate you reaching out, and your helpful response. The higher bed/bath count seems like the best strategy, so I appreciate that. Will definitely keep those points in mind. Would love to pick your brain about the market sometime! Cheers, Randall
Quote from @Randall Leese:Hi Randall,
Hi Everyone! First off, thanks for making this such a great community. It's humbling how many knowledgeable, supportive, and generally rad people there are on here!
I just moved to the area from N Idaho; I'm an RN in the ICU at Banner U, and I'm looking to buy my first home here. Prices are a little discouraging. Is it even possible to find something that meets the 1% rule? Anyone house-hacking? Curious how people make it work. Maybe it's better to wait and see if there's a 40% further downturn like some are forecasting.
With that, any referrals to an investor-friendly agent or wholesalers and/or general tips would be awesome.
Cheers guys!
Randall
congrats on moving out to PHX! My wife and I are in the process of buying our first home and we really wanted to find an investor friendly agent as well. We met Tina Lee of ProSmart realty. She understands the house hacking approach and has helped a number of investors find their homes. Hope this helps!
-Brock Burton
Quote from @Randall Leese:Anytime. Keep in mind, HomeReady/HomePossible may have income limits, so if you exceed those, there is still the option of going with the standard 97 LTV product, or FHA.
@Luis Somoza Thank you so much for your thoughtful reply! I really appreciate the advice coming from someone with so much experience. It's very encouraging.
It's my first home period -- I've never bought here, or anywhere else -- so the HeomReady/HomePossible option sounds great. I love all your other points as well: I'm going to aim for a high bed/bath count, and also get the ADU to avoid the unpleasantness or living with random strangers. lol.
Especially appreciate the advice about hammering down the price and calculating the difference between initial outlay and a higher payment with the long game in mind. I will definitely keep that in mind. Thanks again!
We have a great DPA program that's a gift for the down payment from a federal agency, so no lien is created, repayment required, etc. The caveat is that you pay a higher rate for a but then refinance out 6-7 months downstream. With a seller concession covering the costs, it saves you a ton, including the cost of the refi.
Thanks, @Brock Burton! You too! Appreciate the reference!
Cheers,
Randall
Thanks @Luis Somoza! Yeah, the income limits might be an issue unfortunately. I have the other issue of being a contract worker (ICU travel RN), so seems like lenders all need 24 mo of work history, which I'm over a year away from having. Otherwise, that sounds great!
Cheers!
Randall
