Buying a home.

[Gary]

What should I look for and what should I avoid? Im thinking of buying not just from a investment prospective, but rather to get away from apartments.

Im going in cheap. That means probably a mobile home on a lot, or hopefully a 1/4 acre+. I need to keep my mortgage and ulilitys under a $1000 a month. Down payment will be about 10k.

I have never bought real estate before and for what I am looking at spending, I realize I can be putting myself in a potentially bad scenario. On the plus side, one of my best friends is a realtore and I trust him.

Thanks.

[Angler2407]

You need to get approved for a loan. There are lots of those people and I can hook you up with who I use. He gets 'er done.

Go to http://www.har.com/indexc.htm and start looking at areas & what you want.

[Gary]

You need to get approved for a loan. There are lots of those people and I can hook you up with who I use. He gets 'er done.

Go to http://www.har.com/indexc.htm and start looking at areas & what you want.
Thats a pretty cool site bro! Found some decent homes near you at under 80k. When I used that calculator deal they provide, I could be buying for cheaper than I am renting here at "Casa del Ghetto"! :D

[c_a_otoole]

I am in the prosess of buying a home, and be careful looking at just the morgatage payment, Texas has really HIGH taxes and insurance. The place I am looking at is in Bayou Vista, and the taxes are going to be $250 a month and all of the required insurances are just under $200 a month...so I am looking at almost $1500 a month for a 160K house....it all adds up... Good luck.

[Jerry-rigged]

Couple-o-things-

See if you can do the escrow yourself - from talking to friends about mortgage aggrivations, about 98% of all "problems" with mortgage company's, after the close are from mishandled escrows. Another plus - if you do your own escrow - you know where you money is going, and if there is a problem. This last year, my county conventially "forgot about" my homestead - would have cost me about an extra $1000 in Tax. Two phone calls and I got it fixed, but an Escrow would have just payed it. Down side is that you MUST put money back every month for that $2000-$3000 payment at the end of the year.

2. Don't buy new!!! New houses suck, Low cost "Affordable" New home REALLY suck, and as long as they are still building in your neighbourhood, you WILL loose money selling your home. I am 100% convinced that to get a quality new home, you need to go to a True custom builder, and stay on top of the general, or just build it yourself.


Just for comparison sake - I am in Alvin, My mortgage on my house was for about $75k. My Mortgage is just under $500/mo. Taxes are about $2600 last year (they go up every year). Insurance is payed monthly, with my car insurance, for about $250 (two cars, full coverage, plus homeowners), so call it about 100/mo. for house.

Even better news, they guy next door just sold his house (comparable size/updates/value) for $112k. He bought about 5 years ago for I think 82k.

[dragnet]

You definitely do not need a mortgage approval. There are many, many investors who buy homes for resale and will carry the paper regardless of credit. They will also save you thousands of dollars in closing costs. With $10K to put down, this is a no-brainer for an investor. I know, cuz that's what I do. We can rent-to-own, option the property or just carry the note outright. Lots of options for you.

Look up an investor's group in your area via the internet. Good luck.

[BEER4BAIT]

No on mobile homes. A mobile home will depreciate in value extremely fast. There are a lot of good homes out there for what you are willing to pay. With 10% down it should be easy. If it is an older home just get it checked out, foundation, termites, AC (wonder who could do that), and roof.





What should I look for and what should I avoid? Im thinking of buying not just from a investment prospective, but rather to get away from apartments.

Im going in cheap. That means probably a mobile home on a lot, or hopefully a 1/4 acre+. I need to keep my mortgage and ulilitys under a $1000 a month. Down payment will be about 10k.

I have never bought real estate before and for what I am looking at spending, I realize I can be putting myself in a potentially bad scenario. On the plus side, one of my best friends is a realtore and I trust him.

Thanks.

[Gary]

This is good stuff, thanks guys. I think Ill hold off a while untill I have my ducks in full parade dress! :D In another words, I have more cash in hand, and a lawyer to handle ,
s t u f f!

[podnuh]

Don't delay. Houses aren't getting any cheaper and you're just throwing that rent money down the rat-hole.

[Texxan1]

Interest rates are going UP... Buy now if you can... However, I agree with B4b.. DONT BUY A MOBILE... Depreciation sucks bad.....

Lots of decent houses out there that you can surely afford for under 1k a month...

Thomas

[laguna24]

insurance will be even higher on a mobile home.....definatley steer clear.

[stargazer]

Dragnet, Is that what is called a "Contract for deed"? I have the impression that is something that is a risky. Sure you can get in, but what happens in a late payment or default situation?

[dragnet]

No, I don't like those because they have issues for both the investor and the buyer. I know people do these all the time, but I'm just uncomfortable because of potential risks (i.e. due on sale clauses, defaults, etc). They can be done safely, however, with land trusts and various other legal vehicles. Just not as simple as a rent-to-own.

In a rent-to-own, there are 2 agreements. First is a simple lease for a given period of time. Just like renting any other house or apartment. Second is an "option to purchase". This is where the person agrees with the owner on a certain price for the home somewhere in the future ( 6 months-3 years). In consideration for this the person buys this agreement for a certain dollar amount. At any time during the option period, the person may exercise the option to purchase. If they choose not to purchase the house (maybe they've been transferred, married and spouse doesn't like the house, etc.) then they only lose the option purchase money. They have no responsibility other than that of a tenant.

I like these arrangements because they are fair to both parties. The person can lock up the house against sale out from under them. If their credit is poor than they can still get a house, assuming they can fix their credit in 2-3 years. There is no bank qualifying. They can move out if the situation changes. From the investment standpoint, I have a renter with a "buyer" mentality. They will take care of the house as if it's their own. They are making the payments, but I get the depreciation and the appreciation. And if they move, I get to keep the option money and start all over again with another buyer for a house which has appreciated over a couple of years. And if they default, I don't have to foreclose (taking 9-12 months), I just evict them (45 days).

I've done many, and I have yet to have one go south on me.

[stargazer]

I see. That contract for deed is a BAD situation. Sounds like the rent to own is a good deal for someone with little or no credit. Thanks for the explanition.

[dragnet]

Not necessarily a BAD situation. Sorry if I misled. I think it can lead to some problems that I personally want to avoid, so I use a different method. Lots of others that I know have used C for D with no problems, but I am just more comfortable my way.

Contracts for deed can be used in a different way which is very GOOD.

For example, if you are getting ready to go into foreclosure because you lost your job, transferred, etc. and can't pay the mortgage, guys like me can save your A55 by using a contract for deed to, in effect, assume your unassumable mortgage. The way this works is: you're in deep trouble, little or no equity, can't sell, but you're in a nice house in a nice neighborhood, that is desirable AND appreciating in value. I can have you sign a Contract for Deed and a few other papers, make up back payments and penalties, and most importantly SAVE YOU FROM FORECLOSURE so you can buy another home when you're on your feet again.

People always worry that this will execute the Due-on-Sale clause in their mortgage agreement; however, we use a legal way that this won't happen.
So, Contracts for Deed can be very useful and GOOD under the right circumstances. I just don't use them for selling houses I already own outright. Sorry for any confusion, hope this helps.

[VASQ1]

Gary,

When your interested in prospective property email me at evasquez@farmersagent.com (evasquez@farmersagent.com) and I will give you my contact information so that we can calculate how much insurance would cost on that particular home.

[bayrunner]

Ditto on not buying a mobile home. The only scenario would be a foreclosure that is very much below market price. They are harder to get financed and depreciate in value.

Get pre-approved and compare several Good Faith Estimates. Pay close attention to not only the interest rates but compare all of the fees. Some mortgage companies will make up to 3% of the loan. This is in fees and in the spread of what interest rate they are charged versus what they charge you. Check out Countrywide.com as they don't charge a 1% origination fee. A good loan officer should be able to tell you what to do to clean up your credit if you don't qualify.

Contract for deed can be risky. I know someone who lost their home because the seller who held the deed didn't pay his income taxes and the IRS seized his assets. He lost his down payment, 4 years of payments and upgrades. The investor he bought his home from filed bankruptcy.

[Belt Sanders]

Don't buy mobile homes. They depreciate like a car.
However, if you can (and you can) find one on the cheap they are cash machines if you purchase for the purpose of renting it out. The only real value you would have at sell time would be the land, septic, water well.

[Mantaray]

If you found a house that you like, my wife can help you with the buying process. She's a Loan Officer and a Loan Processor. She works for a mortgage company but operates from home. She can go through an initial interview to get your informations, credit check (which you have to pay for) and find the best lender with the lowest possible interest rate for you. Once you get the approval letter it would take no time. Within one month she sets up the closing date and you just come to a Title company and sign. She's been helping relatives and friends and they are happy, I've never seen buying a house that easy, no sweat at all.
That is if your credit is good. If not, she could still find you a lender with lowest interest rate, but you probably won't get the bottom market rate. There is no string attached until you're committed in buying a house. Otherwise you just have to pay for a credit report and go from there. Of course she could explain everything in details.
One other note, I can't guaranty she would want to help anyone right now since we just have a one-month old child. Just send me an email and will see from there.

[ShadMan]

Where are you looking to live, Gary? My sister is selling a place out near me below what you are looking to pay and it is nice. I believe it is on an acre. She will lease to own also. ;)