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What would you do? | Home Purchase | Rental? | Flip?

So.  I feel like there is an opportunity here,  and I want to make sure I make the BEST decision.  I'll try to keep this all in order. 

 

 

Background (what I think might be pertinent)

  1. I have never purchased a house
  2. I have basically zero knowledge about mortgages
  3. I have minimal home understanding (I can Google, and I know basics...  but inspector I am not)
  4. I have a bankruptcy I am recovering from (1 year 1 month) 

 

Stuation

  1. The fiance's Dad is a Vet,  and is offering his VA loan benefit to her.
    • I understand this would be completely based on his income, and would be in his name.
  2. The cap is in the 100-120k range

Questions/Thoughts

  1.  Not being a home owner,  this would be a good thing for us personally,  just with the idea of not renting, and lower montly payment
  2.  We're not dedicated to staying in the area, and would look to move in the next 5 years if possible
  3. Thought about flipping a house...  but not sure how difficult that might actually be
  4. Thought about buying and renting....  but not sure how lucrative that would be...  or how much management (but we know a lot of people locally, and feel confident about it) 

 

SO

 

End of the day, I know it's just up to us....  but if there's anything I've learned in my few years;  ask for help.  I'm sure there are a bunch of smart(Er) people out there that have WAY more experience than I do.  

 

Any advice, help, thoughts, guidance, opinions, questions...  ALL welcome and appreicated. 

 

 

THANKS!!! 


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Re: What would you do? | Home Purchase | Rental? | Flip?

[ Edited ]

I think people often misgauge the costs of home ownership when they state the savings over renting. I've rarely seen it be the case. Things like repairs/insurance/maintenance/unexpected costs can really add up.

 

I wouldn't get anything in someone else's name especially when you're not committed to staying in the area. Say home values take a drop and you want to leave in a few years but owe more than the house is worth. You wouldn't want to tank your father in law's credit so you could end up stuck. Nor do you want to invest time/money/etc. into something that someone else technically owns. Nobody ever thinks a squabble with family over $ will happen, but . . . . . 

 

I'd focus on your rebuild (which looks like it's underway nicely given your scores 1 year post d/c) and prepare your credit to be able to buy on your own a year or two down the road should you choose to do so. There's literally dozens of reasons it will be better to not have someone else's name tied up in it.

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Re: What would you do? | Home Purchase | Rental? | Flip?

I can definitely appreciate what you're saying here.   The other side of this is that he (her Dad) will actually be potentially living with us (he's in poor health) and I think that is somewhat an underlying to this as well.  That said, he does have his own place currently,  and has no immediate plans to move,  and really he doesn't want to move...  but it's a backup thought with this.   

 

Furthermore,  this is all based on his income (we can't be involved),  so it would be something that he'd be able to afford, and live in should, we move in the next 5 years (he's got backup family here).   While I agree with the money issue completey ...  I think this is more of him trying to give her something before he leaves (he doesn't have much).  

 

I'm just looking at trying to make the best decision with this 'gift' that he is giving her.   

 

 


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Re: What would you do? | Home Purchase | Rental? | Flip?

you will need to read over time how mortgages work and the pros and cons of owning a home. It can be very expensive. Also, dont ever do a purchase in SOMEONE ELSE's name. squabbles happen and you can be out on your but if it gets nasty and the sheriiff says get out. Just wait it out, there will be chances to buy a home when your credit recovers. I wish I would have waited to buy a home and build considerable savings first. You do not want to be in a situation if the wedding is called off or if things dont work out(I hope things are great and bless you). I have seen my mother in law almost lose a car b/c she had her SO finance it and then they wanted their name off the loan. Also, since her name wasnt on the mortgage or home, she left and didnt not have to deal with the cost her ex has now(its bad now).

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Re: What would you do? | Home Purchase | Rental? | Flip?

You didn't mention where you live; however, if you can buy a house for $100K to $120K I know it is nowhere near me. Its getting hard to find a run down condo in the Denver area for $250K; houses? forget it ! 

 

Anyway, as someone else stated, really think hard about living in and paying for a home not in your name. With interest rates as low as they are, you could have your own FHA mortgage with as little as 3% down (the downside of this of course is that you will pay private mortgage insurance (PMI) whereas with a VA loan, there is no money down and no PMI). 

 

I would look at the area in which you reside. Determine the cost of renting vs. the cost of owning. Talk to a Realtor about the market where you live to see if they see any signs of growth that could make owning a home much more expensive in the near future. If the cost of rent is lower than what a mortgage would be, and you do not see prices in your area going up within the next five years or so, I would point you into the direction of renting with the goal that you will save $20K-$22.5K so that you can put 20% down on a house when you are ready. 

 

My only advice is to not wait too long to buy. Do not get into the cycle of renting because, yes, houses can be expensive and there are repairs/maintenance, but there is also equity and security. I did not buy something 3-4 years ago when prices were still affordable and now I have been priced out of the market. I am stuck renting until 1) I can save $60K + for a down payment 2) get married so that I have dual income 3) win the lotto 4) make $24K more per year 5) live an hour away and commute everyday Smiley Sad  6) I am considering moving to Phoenix for affordable housing, close commute and good job market (and then I am just as bad as the people who have moved here and ruined it for me). The cost of housing in Denver skyrocketed in a very short amount of time (way too many people have and keep moving here and are ruining it!) and it has caused an artificial housing market. My only hope is that a bubble will burst and everybody that got artifically rich off their equity lose it bwhahahaha. Sorry, bitter.

 

Back to you...do not feel rushed into buying a home because your gf's father may be passing away soon. Also, I am not sure how that would work with the mortgage after he passes...I believe his estate would require that the home is sold and you would have to get a mortgage anyway to buy it (don't quote me on that though). Your main goal should to be save $$ for a down payment and then buy on your own when you are ready. But if you start to see signs of housing prices spiking in your city, buy before it gets too late. Best to talk to a Realtor in your area for more advice.

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Re: What would you do? | Home Purchase | Rental? | Flip?

CO_NATIVE  ....  Thanks for that insightful response.  That makes a lot of sense.  I can understand the idea of not putting money into a home I don't techincally own,  trust me,  that is crossing my mind.  I think this is really just going to be a temporary thing for us, and something for him in the long run.  That said,  he has told us to do whatever we want with it.  My thoughts have been with either making money renting it,  and banking that towards our savings for our own home,  or maybe flipping it?  I just don't know how viable of an option that would be, and not sure what the stipulation with a VA loan are (but that is obviously on me to figure out) 

 

You make some great points...  good perspectives I should be looking at. 

 

THANKS  --- this is why I ask here. 

 


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Re: What would you do? | Home Purchase | Rental? | Flip?

Oh yeah... it's Toledo Area, Ohio (Makes sense now -eh) lol

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Re: What would you do? | Home Purchase | Rental? | Flip?


CO_NATIVE wrote:

You didn't mention where you live; however, if you can buy a house for $100K to $120K I know it is nowhere near me. Its getting hard to find a run down condo in the Denver area for $250K; houses? forget it ! 

 

Anyway, as someone else stated, really think hard about living in and paying for a home not in your name. With interest rates as low as they are, you could have your own FHA mortgage with as little as 3% down (the downside of this of course is that you will pay private mortgage insurance (PMI) whereas with a VA loan, there is no money down and no PMI). 

 

I would look at the area in which you reside. Determine the cost of renting vs. the cost of owning. Talk to a Realtor about the market where you live to see if they see any signs of growth that could make owning a home much more expensive in the near future. If the cost of rent is lower than what a mortgage would be, and you do not see prices in your area going up within the next five years or so, I would point you into the direction of renting with the goal that you will save $20K-$22.5K so that you can put 20% down on a house when you are ready. 

 

My only advice is to not wait too long to buy. Do not get into the cycle of renting because, yes, houses can be expensive and there are repairs/maintenance, but there is also equity and security. I did not buy something 3-4 years ago when prices were still affordable and now I have been priced out of the market. I am stuck renting until 1) I can save $60K + for a down payment 2) get married so that I have dual income 3) win the lotto 4) make $24K more per year 5) live an hour away and commute everyday Smiley Sad  6) I am considering moving to Phoenix for affordable housing, close commute and good job market (and then I am just as bad as the people who have moved here and ruined it for me). The cost of housing in Denver skyrocketed in a very short amount of time (way too many people have and keep moving here and are ruining it!) and it has caused an artificial housing market. My only hope is that a bubble will burst and everybody that got artifically rich off their equity lose it bwhahahaha. Sorry, bitter.

 

Back to you...do not feel rushed into buying a home because your gf's father may be passing away soon. Also, I am not sure how that would work with the mortgage after he passes...I believe his estate would require that the home is sold and you would have to get a mortgage anyway to buy it (don't quote me on that though). Your main goal should to be save $$ for a down payment and then buy on your own when you are ready. But if you start to see signs of housing prices spiking in your city, buy before it gets too late. Best to talk to a Realtor in your area for more advice.


Well written response CO. With estate laws per state, some do require a purchase, hence estate sales. Well, in MO, if the asset isnt listed in a will or beneficiary listed on a financial form, its included in probate and the process is rough.When My great uncle died, and my uncle did not want the home, it was paid off years ago, it was sold. If I didnt purchase a home that year, I would have bought it myself. The rent prices have went up dramtically since the housing crash in 07-08. The home prices in STL are like Toledo's however in uspcale parts the prices are way up and you need lots of $$$.

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Re: What would you do? | Home Purchase | Rental? | Flip?

I would purchase a duplex. Do your research and you could end up pushing the entire mortgage payment onto the renters. This way, you will have your freedom and someone else paying your mortgage. Now that's a win-win situation. I also highly recommend learning how to repair basic things in your home. Take a class if you need too, it will save you money in the long run. Also, have a lawyer draft up your lease agreement and make sure you take your time and learn the laws and responsibilities of a landlord. It's not always going to be sunshine and daisy because your renters could completely efff you over or they'll pay your mortgage every month till their lease ends. Have a backup plan and research before venturing into renting but I know it will be worth it in the long run. 

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