Introduction: Cannot Buy a home -Other Options?

Question

Hello, I'm Houston.  I'm not sure I'm in the right place and not even sure that I'm aiming correctly for my future.  Let me quickly summarize my unfortunate scenario.  Perhaps you all can let me know if I have a chance investing in buying homes...

Long story short, I am stuck in a mortgage loan that has, potentially, no release.  I make roughly 42k per year and was attempting to save for a home with the idea that I would not be locked into a mortgage( A home for which I have no ownership)loan in 2018.  It turns out that I will continue to have this loan on my credit - so I cannot hope to buy a home for myself.  In fact, I had a difficult time buying a $7500 car despite the fact that my credit score is in the mid 700s.  The mortgage loan remains and will haunt me.

I'm wondering what, If i cannot invest in a down-payment on a home for myself, is possible regarding buying a REAL PIECE OF SHIT home(10k-30k range) from an auction and making it a long-term project to spend my time and money on. I've never been to nor have I purchased anything from auction.  So information about how to do this would be very valuable for me!

This would be both a mental focus project and an investment project.  I love to build, renovate and work to make things beautiful- and sometimes, livable.  I'm not afraid of labor and, in fact, despise the office environment I'm currently working.  I can see such a venture as a re-awakening of my creative mind and body, which is something that has been dormant over the last few years.  I'm a musician, a lover of nature and enjoy working on home projects.  Small goals and end results are the foci that occupies my mind.

Granted, I understand that home ownership/purchase comes with fees and taxes.  This could be a nightmare if not approached with proper preparation.  But this is why I am here.  What should I prepare for and are such goals and projects logical for someone in my financial range?

Notes:  I live in the Norman OK area and am very familiar with the major cities around me.  I have renovated many homes including work such as drywall, wall construction, stucco, drywall texture, wood and laminate floor installation, prefab cabinet installation, calking, trim, basic electrical light/fan/switch and utility installation, tile/grout, basic plumbing/sink/toilet installation, door framing, etc...

I can post pics of my renovation work if that's necessary for assessment of my capabilities.  But note that I am not trying to become a house flipper, necessarily.  I am seeking advice regarding the feasibility of home renovation and purchase/investment based on my current income and whether these kind of home renovations exist in my purchase price range.  And, yes, I am considering all types of homes - no matter the size.

I will take no offense to comments of my naïveté'.  But I hope to hear encouraging suggestions to create a malleable goal that I can aim for considering that SOMEONE wants to make my life miserable.  I refuse to accept that and want to move forward, regardless.

Thanks!

-Houston

Jill F. · Answer

I just read Fannie is about to change the rules on DTI, maybe this will help you,

https://therealdeal.com/2017/06/09/fannie-mae-taking-a-friendlier-approach-to-debts/

Did you have to quit-claim the house to an ex? Perhaps you could offer an incentive to get them to sell so the mortgage will get paid off?

Houston Spitler · Answer

Hi Kara.

She claims that she doesn't make enough to refinance on her own income.  I intend to ask her to attempt it, nonetheless.  I believe she is in the 55k-65k range of income at this time(130k remaining on mortgage), which looks a lot like what our combined income was when we purchased the home -but I'm not certain on her current salary.  I'll found out soon - she might be able to do this, but I don't know her debts at this time.  She has been married and divorced since our agreement.  If she could save money, I assume she would do it without hesitation.

Kara C. · Answer

Hi Houston, I'm in Norman as well.  The written statement suggestion sounds good.  It can't hurt!  However, would it be possible for her to go a step further and re-finance the mortgage in her name only?  Depending on what the interest rate was initially, she might even see a savings in the monthly payment.

Houston Spitler · Answer

I thought I'd go into more detail because I came across a suggestion from someone and wonder if it's worth pursuing.  The mediation agreement with the Ex boiled down to a quit-claim deed signing and an agreement that if she could not keep up with the payments independently that she would sell the home to release us both from the Mortgage Loan.  She's been paying the mortgage herself for 5+ years and I cannot see her having an issue continuing the payments into the foreseeable future.

It was suggested that I get a written "statement" from her that she has maintained the payments for years and will continue to do so without my assistance and, in such a case that she could not, she would sell.  It was suggested that her statement could leverage my ability to acquire a mortgage loan myself from a lender if they were to give the statement any weight against my debt to income ratio.

Thoughts?

Houston Spitler · Answer

Thank you for the tips, Mike!

Houston Spitler · Answer

Thank you, Jill.  Interesting article.  If I were to get a raise sometime in the near future, the new DTI might apply to me - so I suppose there is hope.  Yes, Quit-Claim deed.  I seriously doubt I have an incentive to offer.  She lives in one of the nicest and safest neighborhoods in town and is likely to stay until retirement.

Mike Garrett · Answer

Houston, welcome! I believe you are in the right place. There are many ways to structure real estate deals. Seek out a local real estate investors club (check out Meetup.com) and go talk to people. If you are willing to put in the work then you may find someone who is willing to put in the money. If you really have a calling to work cosmetically on houses and you have a good attention to detail, then you can be a real asset to someone who has the cash, but not the time to deal with the flip.

These partnerships happen all the time. Also read Robert Kiyosaki's "Rich Dad Poor Dad" and "Cash Flow Quadrant". Intelligence will solve your financial problems and other people are key to gathering the crucial information.

Best,

Introduction: Cannot Buy a home -Other Options?

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