To invest now or hold off?

[Nicholas Llapur]

Hello! I am new to BP and RE in general and I am wondering if now is a good time to begin investing in the Atlanta area. My fiancée and I are currently looking for our first home (to live in). Being that the market is so hot right now, we are considering holding off purchasing a home to buy and maybe start investing first while we rent another year or so. I am afraid that property values have risen so much there is a high chance of losing money with purchasing now. As of right now we have about 85k saved between us both and wondering if that would be enough to BRRRR in this market or if we should continue to save another year.

[Kalim Kalla]

Originally posted by @Nicholas Llapur:

Originally posted by @Brenden Mitchum:

Hey @Nicholas Llapur, welcome to the BP community!

I totally understand where you're coming from. The market is pretty crazy right now and the last thing you want to do is buy a bad deal in this kind of market. 

That being said, you also don't want to just leave that $85k sitting in a savings account. Now, I would choose this option over buying a bad deal. However, I would definitely choose an okay or marginal deal over the savings account option any day. 

There are still decent deals out there if you look hard enough. You have plenty saved to BRRRR with hard money, but that's a risky strategy in this market. You want to make sure that if home values do fall, you still have enough buffer to get out of the deal without being in-debt to a hard money lender.

Right now, in Atlanta, your best bet is to get creative. It sounds like house hacking a SF home with a mother-in-law suite could be a good, creative strategy for you. It's still possible to cover your mortgage, even in this market, and you can definitely find something that will cash flow once you move out. Plus, unless you plan on selling in the next 5 years, you won't really need to worry yourself with the possibility of home values falling. As long as the property cash flows well, you can sit on it for as long as you need to. With a 5% down conventional loan (plus 2-3%) closing costs, you should have plenty left over to renovate the property, buy another in a year, or even scoop up some deals if the market changes directions. 

Hope this helps a bit! Please, feel free to reach out anytime if you want to discuss house hacking or other creative strategies further.

When you say house hack do you mean to buy, renovate, live in it, then rent it out? 

House Hacking meaning Live in one section of the house or the main unit of the home and rent out the in-law suite or the basement or a section of the home that is a bit more disconnected from your primary area in order to get some cashflow towards mortgage payments or so.