First Time Buyer in Peak Market Conditions

[Ross Johnson]

Hi all, 

I'm new to BiggerPockets, although I've been listening to the podcasts for a while trying to learn as much as possible.  I live in Portland, OR, which as many know is an extremely hot and expensive real estate market.  From preliminary meetings with a few realtors, properties are scooped up quickly, often at prices greater than the original asking price.  This is due to Portland being (among other things) a very desirable city to live, new tech jobs, etc.

My preferred first purchase is a live-in duplex: my wife and I don't have kids yet and are willing to share space with tenants in order to reduce/eliminate mortgage payments.  This will allow us to save and purchase our next house in a few years' time and keep the duplex as a long-term investment.

I have been scouring the usual websites for listings, and am becoming increasing concerned that purchasing a property in the area we want to live will become a liability.  We would certainly be "approved" for loans on some of the asking prices but I don't want to be strapped financially.

My question is a fundamental one: Is it a sound financial decision to purchase a live-in multi-family property in seemingly peak market conditions?  Even more to the point, is it smart to purchase any property in peak conditions?  For the more experienced investors here, what would be your strategy as a first time buyer?  Should I simply continue renting until the market stabilizes? 

Thanks very much for the input, I'm very much looking forward to diving in here at BP!

[Jim Sestito]

@Ross Johnson Across the country here in Boston Massachusetts we have a similar market to what you as describing.  

While you may not be able to pluck deals off the MLS with ease that does not mean there is not properties out there that will make sense for your situation.

Recently I purchased my first multi family (2-Plex) house.  The sellers were in a need to move situation since they were relocating and their property needed a lot of work thus making them very motivated.

The house does not meet the 2% but it does give me a place to live and a small but positive cash flow every month.  

House hacking at its finest. -- read here for more on house hacking by Brandon Turner.

http://www.biggerpockets.com/renewsblog/2013/11/02...

- Don't give up on your area.  The are always deals to be had just keep looking, networking, and asking around!

Good luck investing,

Jim