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Updated about 1 year ago on . Most recent reply

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Seeing advice on how, or if, I should start with Real State

Jonathan Camacho
Posted

Hello, 

I was hoping I can get some input from other people on whether or not I should invest in real state in my current situation. I was hoping I can tell you about myself and get some advice. My wife and I currently live in California and are renting a house here. We tried to buy our first home with a VA loan at the beginning of last year but got outbid every time and then rates started going up and we were priced out of the market. We are both professionals and make about 300K a year together. We had about 100K for a downpayment. After we didn't get a house and decided to sit on the sideline I started thinking about using the money we had (plus some that we have saved until now) and buy real state instead, long term rentals to be specific. I have been following BP for a while now, read some books on real state (local and out of state), and thought about my buy box. My question is, since we are renting, would it be better to buy a house now that rates are starting to come down? or should we go for it and make an investment purchase? considering that I think we would have to invest in out of state properties because California is just too expensive, and also, I believe we would have to buy something in this couple of months since when rates come down I believe prices will go up and we will get caught in bidding wars again. I should also mentioned that we have all of our paperwork in order, about 500 dollars a month in debt, and excellent credit scores.

Thank you in advance. I think I would mostly appreciate if I can get input on whether to put all our money to buy our primary residence and use that to buy real state, or just rent for now and use all of our money to buy real state.

Thank you, Jonathan

Most Popular Reply

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Chris Seveney
  • Investor
  • Virginia
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Chris Seveney
  • Investor
  • Virginia
ModeratorReplied

@Jonathan Camacho

I would start with owning your own home first so you understand the maintenance, care and cost of home ownership.

Where I disagree with you is thinking home prices will shoot up when rates come down - there is really not a huge correlation as they did not drop substantially when rates went up. The macro issue at play is people make X and can spend 28-38% of income on buying a home. If wages have not gone up significantly how can prices? While there may be a FOMO bump when they get to a certain point rates have dropped for like 9 straight weeks and homes continue to sit longer and have prices come down.

Sorry for being long winded but I recommend owning first

  • Chris Seveney
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