Buying a House while in Graduate School

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Buying a House while in Graduate School

Darin Dutson
Member since 2019 · 4 posts · 0 votes

SHORT VERSION:

I have saved $30,000 during my undergrad, but I will have to go into debt for my graduate degree in Physician Assistant studies, which will amount to about $145,000 for the program alone. I have applied for a number of scholarships with no success. What do you think about investing the money I have into buying a condo / townhouse instead of renting and throwing my money away? I have heard good things about the Las Vegas housing market, and if I buy real estate my thinking is at least I will have something when it is all said and done.

LONG VERSION:

My name is Darin Dutson and I am 26 years old. I am married and my wife just had our first child in January. I graduated with my 4-year degree at Brigham Young University in Utah, and I have been accepted to a Physician Assistant Studies graduate program at Touro University Nevada.

An approximate estimation of tuition cost is $100,000 and housing/living ~$45,000. My wife and I have saved up $30,000 during my undergraduate program, but it seems we will find ourselves in an immanent large amount of debt for grad school.

My question is about my housing situation. I would like to invest the money we have saved in a condo or townhouse of some sort, which will require us to make a down payment of 15 to 20% because we do not qualify for a first-time-homeowners loan. This would leave me with a $5000 to $6000 emergency fund and some real estate. If I do not do this, I will have to rent, which is an automatic $30,000 down the tube (in Henderson, rent ranges from $850-$1200 per month plus utilities). I have attempted to find other ways of living a little cheaper to no avail (e.g. contacting bishops from my church who potentially had ideas where members could house my family for cheaper).

Keep in mind that I will be paying my mortgage with the student loan money I receive, NOT rent if I happen to buy a house. My wife is going to try to work from home while taking care of our young son, but we are not sure how much she will be able to do yet.

Would you lean toward either one of these options, or scrap them both altogether? I have looked into and applied for a number of scholarships with no success. My wife and I continue to work to save as much as we can before we move down to Henderson, NV.

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Caleb Heimsoth
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
7y

@Darin Dutson. Definitely don’t buy a house while in school. Also I’d re think the degree for that much debt. What’s the average starting salary for a PA in your area ?

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  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    7y

    @Darin Dutson. Definitely don’t buy a house while in school. Also I’d re think the degree for that much debt. What’s the average starting salary for a PA in your area ?

    1Reply
  • Cherie Orellana
    Salt Lake City, UT · Member since 2018 · 219 posts · 182 votes
    7y

    Why wouldn't you qualify for FHA?

    There are programs for conventional with 3% down as well. 

    If I were you I would invest in a home as opposed to throwing money away on rent. However I would find a good realtor that knows the market well and find something that is great deal. Something you can Househack and rent a basement apartment or a multi unit (duplex, tri, four plex ) where you can live for less than rent would be  and Start paying down the mortgage and building equity.  That way you can continue to save or try to pay down your schooling as fast as possible

    1Reply
  • Darin Dutson
    OP
    Member since 2019 · 4 posts · 0 votes
    7y

    @Cherie Orellana I have a realtor, but he has mentioned a couple times that they don't really build duplexes in the Henderson area. Your idea was my original idea as well; however, I have been unsuccessful in finding anything. As of right now, I wouldn't qualify for an FHA loan because my wife doesn't have a full-time job, and I will not be able to have a job while in school.

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  • Jackson Pontsler
    Flipper/Rehabber · Salt Lake City, UT · Member since 2016 · 211 posts · 174 votes
    7y

    @Darin Dutson I caution you because this definetly has many red flags.  Sure you now have a house and sure that rent isn't there anymore but there is a mortgage that you have to pay that will eat away at the rest of your funds.  Until you have a stable way of paying off that mortgage I would caution you against this.  

    On a second side note are you sure you want to stay in Nevada?  What if you get a job somewhere else when you get your degree?  This could erase all that you had accomplish till then if you made this work in the first place.

    1Reply
  • Marc Winter
    Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 3k+ votes
    7y

    Don't do it.  

    You have a wife and child--you need a safety net first.  At least 6--9 months of living expenses in savings.

    Not to be pessimistic but rather pragmatic, if you use your savings (WAY TO GO to save ,30K while in school btw!) to buy a house/condo/whatever, if things go sideways, like things sometimes do, you stand to lose your house AND the $$$.  

    Hope for the best, but prepare for the worst.

    1Reply
  • Darin Dutson
    OP
    Member since 2019 · 4 posts · 0 votes
    7y

    @Caleb Heimsoth I don't have much of a choice at this point. I got in and it's extremely competitive. I would have re-thought it a while ago but I have based my life's work on this idea. Starting out in NV I can be making 110K.

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  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    7y
    Originally posted by @Darin Dutson:

    @Caleb Heimsoth I don't have much of a choice at this point. I got in and it's extremely competitive. I would have re-thought it a while ago but I have based my life's work on this idea. Starting out in NV I can be making 110K.

    If that’s true that’s pretty good.  Google tells me average salary for a PA career wise is 98k.  So 110k seems high starting but go for it if you don’t view you have any other choices.

    Just don’t buy a house while in grad school.  

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  • Adam Detig
    Indianapolis, IN · Member since 2017 · 63 posts · 41 votes
    7y

    @Darin Dutson

    Now can I relate to you! I’m currently in my second year of PA school, married, however no kids.

    PA is a great degree and career to get into and congrats on getting in. It took me 12 applications, 1 interview, and a waiting list to finally make.

    During my didactic year I decided to buy a duplex that needed A LOT of work. I made so many mistakes in estimating timelines, having to move into it quickly, studying, and everything else. But it’s done and it’s currently listed. I’m still working on my side.

    I would not recommend buying a single family home, that’s not investing. Investing adds money to your pocket at the end of the day. A single family home is only going to take money out, although you do get equity at the end of the long road.

    Buying a 2-4 plex will bring income, and the availability to move whenever (like when you graduate) as you can put a renter in your unit.

    I caution you that if you are going to take on that risk (which all investments are), that you should know how to analyze the deal upside down and backwards. Make sure you get a deal worth making.

    Also make sure the wife is on board. Real estate is a different world that requires a different mindset. It’s better to have a similarity in that.

    1Reply
  • Gregory H.
    Real Estate Agent · Philadelphia, PA · Member since 2013 · 451 posts · 369 votes
    7y

    You have a new baby & massive student loans approaching, do not buy a house right now. Especially because the Vegas market is one of the most cyclical in the country, and that area was absolutely devastated last time the market crashed, one of the worst markets in the country, prices fell 50%+. Get through school, get a job, pay off debt like crazy for the first couple years, then invest.

    1Reply
  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    7y

    For two years of school unless you find a house that is kid safe and a screaming deal don't buy a house in grad school.  I say this even though I did buy my first house in graduate school. We were going for PhDs so it was a longer time  commitment  and we didn't start out living there with kids. The place was way below anything being sold in the area and needed work but  we had pitiful graduate assistant jobs, some time, and I was a bit crazy. My son was born in that house but the floors and walls were fixed by then. I am not sorry we did it but had we had a baby on move it I am not sure I would have done it.  Basically anything you can afford won't be suitable for your situation and you may not be there long enough to make it worthwhile. Do you even know you could get a mortgage in your situation?   

    1Reply
  • Darin Dutson
    OP
    Member since 2019 · 4 posts · 0 votes
    7y

    @Colleen F. I am working on a couple of things to get pre-approved, simply because I was curious what I could get. My wife and I wanted to move forward with the idea and do all the research we could before making a decision. 

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