Home Purchase In a New State

[George Kamerzan]

Hi guys, hope everyone is having a great Thursday afternoon. I would like to thank everyone for their input ahead of time, I really appreciate it. Long story short I sold my duplex (that I house hacked) in the Tacoma Seattle are of WA state. Made a pretty good profit, nothing crazy, but not bad for 2 years. My wife is origionally from Asheville NC which is a neighbor town of Greenville and Spartanburg SC. We chose to move to this are because of all the crazy politics in WA and because we have family in this area. We are currently under contract for a new construction house in The suburbs of Spartanburg SC. The house is 330k(which is a pretty hefty amount over here but it is a quality house ) its my wifes "dream house". The problem arises in all this speculations of a market crash lately, as well as the fact that the only way I can aquire this house(because of me moving to another state ) with 20% down. With closing costs, for us to move into this house it will cost 75k, which is a substantial amount of our nest egg, as well as it seems very counter productive from a real estate investor view. We thought about renting, but rents here for anything decent will run 1800-2000. Now the positive of such a hefty down payment means our mortgage all in (with taxes and insuranse) will be about 1350.00, also means we are not throwing 23k away a year for rent. Negatives are clearly obvious, I would put a huge sum of money away, which can either be good if inflation keeps rising along with prices or I just bury this money if there is a collapse. Options are, rent and see what will happen, buy this house, or get out and keep lookong for something cheaper. My dream is to flip houses as well as build a rental portfoio, is it just me or will aquiring this house be a bad start. Also I do have a sister that lives and Jacksonville Florida, who is trying to convince me that this idea of mine would work better there. Please help, any input would be great.

[Mitch Davidson]

Hi @George Kamerzan. Welcome back to the southeast. Spartanburg is a great place to be! Pretty affordable compared some nearby regions. 

Why do you need to put 20% down? If the home will be your primary residence, why not just put 5% down? The mortgage insurance will be a small price to pay to be able to invest the 15% elsewhere. Of course, MI is high if your credit scores aren't pretty great. But if that's an issue, then FHA will work well.