Looking to buy but when? And where?

Question

Hey ya'll,

I’m looking for some general advice here on what I should do, I want to buy my first property here somewhat soonish and I’m trying to determine whether to pull the trigger ASAP or if it’s better to wait, and also where is best to buy…

So I’ve got about $100k in liquid capital in the bank right now (I can’t spend quite ALL of that on a property purchase but at least half) plus around $20k in investments…paid down all my debt, 800+ credit rating and yearly before taxes income is close to $80k ( this was hurt by the pandemic, but it’s been normalizing the past couple years). So I think I’m in a good position to buy.

So what should I do here? I hear all kinds of conflicting info on interest rates, inflation, housing costs, recession, all in regards to whether it’s best to buy something asap or wait things out a bit…It seems like a great potential hedge against inflation to me but idk, I’m new at this, what would ya’ll do in my position?

The ultimate long term goal is more for passive income than ROI, and a short-term goal if possible is also a place to live…so live in it for a while then flip it into a rental unit and possibly try to buy another one. I’m not opposed to buying a pure rental unit, but I’d rather get something I can also potentially live in if I can.  House-hacking therefore seems like a good solution for me, the question is what market to shoot for.

I work in film and television and I do work mainly in three markets: Austin, NY, and Atlanta. All three markets have pros and cons. Austin is always a hot market, but idk it seems like maybe a missed the party on that, it’s very expensive there now and I make the least amount of money there so it’s harder to justify. NYC is of course out of the question, way too expensive though I could potentially buy something upstate; only problem there is I’d still have to rent at least a room in NYC as that’s where I mostly work so it’s kind of the biggest cash-sink. I haven’t worked in Atlanta in a couple years so I’m least familiar with that market and it seems like it’s gotten more expensive, but as of now it’s still more affordable than either Austin and NYC…no idea what the rental market is like there, but it seems like it might be the most economically feasible.

So anyway, that’s my scenario…should also note that I won’t be pulling the trigger on such a purchase right away, there is currently an on-going writer’s strike and as I work in production, I’m out of a job until it concludes so I’m gonna have to let that sort itself out and see what kind of job I end up jumping back into. But I would at least like to get a jumpstart on thinking about it and analyzing my options.

Anyway that’s it, thanks to anyone who read all this and offered advice.

Michael Dumler · Answer

@Robert McGreevy, if you plan to hold the property for 10+ years then all of the short-term fear/uncertainty you hear should be noted but also ignored. As a Georgia licensed real estate agent I'm biased, however, to me, it kind of seems like you've answered your question. A LOT has changed in ATL over the past 3-5 years. As you've noted, relatively speaking, Atlanta is still an affordable market, however, with the current economic pace and growth we're experiencing here, affordability will be a thing of the past. If you need additional insight regarding the investment space and house hacking opportunities, I'd be more than happy to connect and hop on a call. Feel free to shoot me a text or email if you're interested (contact info is listed in my bio).

Ran Iarovich · Answer

I always tell people that timing the market is a deadmans game. Usually, you have only realize that the market has shifted when it is too late. I think you can agree that no one can time the bottom of the market perfectly. All we can do is look at indicators that point towards that direction and make our investments then. Only after the shift will we be able to fully absorb our investment position. The figure I put refers to this exact situation. Depending on which side you are on, savvy sellers/buyers are the ones that stay within the safe zones of making moves depending on market momentum.

'Consider also that the average homeowner equity has increased almost 4x fold over the past 23 years (even more than equities!) you can expect to at least make some ROI out of your investment.

With that standing, if you were looking for good cash flow over ROI I would try to get in contact with the community. Listen to the recent Bigger Pockets podcast interviewing Barbara Cocoran. She was able to build an entire empire in NYC by partnering up with the locals on finding the best deals, prices, and locations.

Hope this helps and good luck!

Nathan Harden · Answer

No time like the present. It really comes down to picking your poison.

Buy now when rates are high but with less competition.

or

Buy when rates are low but with more competition.

Steve Vaughan · Answer

Buy when your off-market sourcing efforts land you a good deal.

Buy in the market you know well- usually your backyard  @Robert McGreevy