Reasonable Expectations - Good deal vs. great deal

[Emily Fischer]

Hello All, My husband and I are looking at buying our first home. We have been sacrificing by living with my parents for the past 8 months to save up money. It has been hard. My parents have very different life styles and I have an hour plus drive (one way) to my work and my friends. I've reached the point where I'm just so sick of all the driving. It's impacting my mental health. I'm ready to buy a place now. I've been talking to my husband about the idea of real estate investing. My parents own 3 duplexes and that has been really good for them. After discovering biggerpockets he is finally on board.

The big problem is we are in the Denver/Northern Colorado market. Where we need to live, we can't find much for under $250k. We are planning on house hacking, but we would most likely still have a payment we would have to cover. I feel like my husband has unrealistic expectations. He expects to have rent cover all of our payment. I've run the numbers on several prices and I don't think that is going to happen in this market.

I've been thinking we find a good deal (instead of waiting forever for the perfect deal). Once we have a place of our own that is also paying us some money through rent, we can be patient about finding the next deal. Eventually we are thinking about investing outside of our market, but that is down the road. My husband wants to be super extreme and wait until we find the diamond deal. I don't think I can do that and it's causing some friction between us. Any advice?

[Bill S.]

@Emily Fischer $250k for a duplex is not happening in the Denver metro area. I was offered and "off-market" deal of a run down ratty duplex for $450k in a lousy neighborhood. The sad thing is they will probably get it. Adding another unit or two doesn't really change the number much either except to make the purchase price (also down payment and DTI) harder to swallow.

I would ask your husband to get in the looking game a bit. Find an agent that will show you properties and have your husband pick the properties that he thinks would work and then set showings and see the properties. It shouldn't take long for reality to set in. You and he really need to get down to brass tacks and start looking for that diamond in the rough. Let him experience how rare they are and how competitive the market is. It's one thing to say you are going to hold out for a home run. It's quite another thing to stand in the batter's box while the umpire is calling strikes and wait for that home run pitch. 

It's fun to dream of that great deal and then there is reality. I really like the idea of doing a single (buy something that works-this is actually going to be much harder than you think in this market) and then shop for "the deal."