Hey BP- After listening to a handful of podcast and reading some discussion post I thought I would finally jump in, introduce myself, and share my first real estate experience with everyone......(here we go)
A few years back, I was at a wedding listening to a mutual friend talk about his recently purchased a home. Long story short- he had his friends move into the house and pay rent so he could live rent free. Now at the time, I was living in Washington, DC surviving paycheck to paycheck. Not because I didn't have a good paying job but b/c the cost of living in DC is extremely expensive. My biggest expense- Rent! No matter the area of DC I lived in, I was paying roughly $1000 a month to live in tiny rooms. So after listening to this guy brag about how his friends paid his mortgage for him, I knew this was something I would be interested in. So I decided to move back to my hometown of Philadelphia and live with my parents to save some money for a down payment.
While saving and waiting, I thought about the area I wanted to live in, the type of real estate I wanted to buy ( house/ condo/ foreclosure/ short sale/ etc) and the size. What mattered most to me was that I was in downtown Philadelphia, with easy access to public transportation and most importantly that would attract a roommate right away. I got pre-approved for a mortgage and began to look for properties in 200K price range (thinking that's what I could afford with my salary, cost of living etc). After a few short weeks, I was able to find a 2 bedroom- 2 bath newly constructed condo in the Francisville area of Philadelphia.
The condo was listed 215K however my agent was able to reduce it to 210K with the seller paying my closing costs. Since the property was listed in an up and coming neighborhood with little development, I was able to get a mortgage for as low as 3% down, 3.7% interest rate with no PMI insurance. On top of that, Philadelphia offers a 10 year tax abatement on brand new properties. So with a total down payment of about $7000 , my monthly mortgage payments come out to just over $1000 (my sister-in-law spent more on her wedding dress). 3 weeks after closing, I found a couple to live in the second bedroom of the condo and I now pay just over $300 a month with my HOA fees included.
I am now approaching a year in my condo with the same tenants and have to say I am happy with my decision. However, I have to admit that I was somewhat lucky and don't expect to have such a painless process on my next real estate transaction. If you are looking to do what I did, please read post throughout BP and listen to the podcast. There are so many tips and options out there that I could have used before making this purchase if I had gotten involved in BP. For example, I was turned off by a foreclosure property because A) I am not handy and B) I didn't think I could afford rehabiing a distressed property. I now know there are FHA programs like the 203 loan that will help you with the financing.
Hope this was somewhat helpful and look forward to catching up with everyone on BP!
Cheers!
Kevin
