Should I buy or wait? (Alexandria - Huntington area)

[Julius F.]

Happy Holidays, and I wish everyone great success in 2018!

I have recently caught the REI bug. I am looking to buy and house hack but there are a few things that worry me. Just looking for some advice/feedback from others as to if I am in over my head or simply crazy.

Currently, I am renting a room in a house for $800/mo, but I am looking to move. My main goal for renting a room was to pay off my student loans, which I have done.

I’m now looking to buy in Alexandria (specifically around the Huntington area or a little further south along route 1) to be closer to work, in order to cut down my commute time. In addition, I would rather not waste money on renting (putting my money into a black hole). The area I believe is a hot market, since it is located close to the metro and it seems to be a growing area (class B or C area?).

Finances:

- 8k saved to invest (most of my savings)

- Buying price range 350k or lower

- Use of a VHDA loan 3% down with DPA and MCC

My concerns:

- If another opportunity comes up and I leave the area (say in a 1-3 year range).

- Going against the requirements of the VHDA loan as a first time buyer (and wasting it) since I believe the house has to be a primary residence for 5 years. In addition to paying back the DPA.

- My exit strategy if something does happen, since in this time frame I will have little or no equity in the home if I sell and I could lose money by selling (not sure if I can rent it since it is suppose to be my primary residence).

I've thought of just looking for an investing property (not a primary residence), but obviously not enough money at the moment to invest in this area with a down payment of 20% without assistance from other investors.

I could also try to buy in a good location in Maryland but the commute to work would be tough.

Questions:

- What are your thoughts on the situation?

- What exit strategies would you have in place to prevent losses?

- Do you have any experience or knowledge of the VHDA loan and going against the requirements?

All advice/feedback is welcome and greatly appreciated.

[Chris Seveney]

Julius Fitzhugh
With little down payment your most likely going to have trouble finding a property that will cash flow.
Also if your concerned about possible relocation in a few years let’s look at it a different way - what is the upside of the investment ? How much do you think you would make ?

What are the risks ? If your forced to sell and their is negative equity your in a short sale situation which will crush your credit and I believe you have to wait X amount of years before you can buy again. With lower amounts of cash I would recommend alternative real estate investment whether it be in crowdfunding, partial notes or tax liens / deeds. In those if you lose your $ your not also crushing your credit.