First Time Homebuyer

[Charles Cathey]

With rising interest rates, do you think it's still a good time to purchase a single family home? This will be my wife and I's first home purchase and we can potentially get into a great home for relatively cheap due to a family friend who's giving us a considerable discount on a home in the Orland, IL area. But with the fed raising interest rates 

[Ty Ash]

Hi @Charles Cathey!

Sounds like this is a great opportunity without actually having the numbers in front of us. I think a single family home purchase is still a good choice today even with rates rising (yet still affordable historically speaking). Especially if you're able to check off at least a couple of these boxes:

1) You're buying it under market value (look at sold listings in the last 3 months nearby for similar finishes, beds, baths, lot size)

2) It fits your current needs for a home

3) It has some "meat on the bone". Whether it's carpet, paint, flooring, landscaping/curb appeal having some ability to force appreciation is a good position to be in. (If 1 and 3 apply, you might have a good live in flip on your hands, read up on this strategy more)

4) You could rent it out and be breakeven or cash flow post move out (use the BP Calculators). You'll be able to use a low % down option to increase your ROI / Cash on Cash.

5) You could see yourself living there for 5-10 years. This gives you time to wait out market corrections and consider the other options above.

All in all, the more options available to you, the better postion you'll be in. There's a good chance that you will build equity over the next couple of years by buying a primary residence that could unlock buying power to you in the form of a HELOC.

Best of luck!