Can I Buy a House Yet?

**maat55** · 05-22-2008, 03:45 AM

I would keep saving your money and rent cheap. I assume that the house would be temperary, the money you would pay in interest and taxes and upkeep in the short term will eat up any benefits. Last thing you need is the pressure to earn a steady income while in school.

**MonkeyMama** · 05-22-2008, 06:22 AM

I think you'll still find deals in 2 years. Rushing is exactly what got people into this mess.

Save 20% down and get a bigger income first. That's my advice.

**coaltrain** · 05-22-2008, 07:57 AM

Thanks you two. You're probably right. I am really anxious and that most likely is clouding my judgement a bit. Ugh, I'll sit.

**jIM_Ohio** · 05-22-2008, 08:53 AM

What would the balance sheet look like if you owned a rental while in college?

**coaltrain** · 05-22-2008, 01:34 PM

Assets- $10,000 towards the down payment
5,000 in a high yield savings account

Liabilities- 80,000-100,000 mortgage

I have very little debt. About $1,500 in student loans. Most of my college gets paid for from grants/scholarships. I don't really have much on either side. Without getting the house I have 15,000 saved and 1,500 in the hole. Can you see why I want to make some kind of power move?

Also, while at school, I stay at my brother's rental property. He charges me the minimum needed to pay the bills and it's really next to nothing considering what most pay. Even if I get in a jam I could always pay him later.

(I hope this is what you were trying to get from me. Sorry if not.)

**jIM_Ohio** · 05-22-2008, 01:44 PM

Originally posted by coaltrain View Post

Assets- $10,000 towards the down payment
5,000 in a high yield savings account

Liabilities- 80,000-100,000 mortgage

I have very little debt. About $1,500 in student loans. Most of my college gets paid for from grants/scholarships. I don't really have much on either side. Without getting the house I have 15,000 saved and 1,500 in the hole. Can you see why I want to make some kind of power move?

Also, while at school, I stay at my brother's rental property. He charges me the minimum needed to pay the bills and it's really next to nothing considering what most pay. Even if I get in a jam I could always pay him later.

(I hope this is what you were trying to get from me. Sorry if not.)

1) Balance sheet would be

a) monthly income from rental
b) monthly expense of rental

2) then look at
a) yearly income from rental (include any tax deductions)
b) yearly cost of rental (include any costs like taxes and repairs)

Get 1) into portion where you profit, then make sure the deductions you take in 2) offset any costs which include vacancies.

I have looked into buying some college rentals myself and the only thing preventing me from pulling the trigger is the properties where I went to college are 250 miles away.

I can get a 4BR for around 40k
I can easily see renting the 4 BR each for $300 (including utilities) and that would cover a 15 yr fixed mortgage payment.
The risk of the properties being that far away is too much for my wife.

**project15** · 05-22-2008, 03:56 PM

I think the biggest question is whether or not you would get approved. With little to no income other than proposed rental income, lenders won't be very quick to approve you, let alone pre-approve.

**tripods68** · 05-22-2008, 06:44 PM

I think considering the location and the rental income prospect you might have a shot in getting a loan. But you have to produce decent income. I would start talking with a lender that specialized in rental properties.

**billy1980** · 05-23-2008, 06:49 AM

I would keep saving but keep a vigilant eye ont eh market over the next 2 years.

**Slug** · 05-23-2008, 11:51 AM

Would brother co-sign with you?

**LuxLiving** · 05-23-2008, 01:33 PM

Would brother still rent to you at your current location and current low rate if you bought elsewhere? Him being willing for you to make money while he just stays even?

**coaltrain** · 05-24-2008, 07:55 AM

I think the biggest question is whether or not you would get approved. With little to no income other than proposed rental income, lenders won't be very quick to approve you, let alone pre-approve.

Yea this was my initial question. Can I get approved?

Would brother co-sign with you?

Yes he would.

Would brother still rent to you at your current location and current low rate if you bought elsewhere? Him being willing for you to make money while he just stays even?

I wouldn't do that even if he would let me. I would stay in my house for the remainder of my college career.

jIM_Ohio- Yea I have most of those numbers except for the amount of taxes I'll be paying. This town only stands up because of the university and real estate. I don't think I'd pay much more than 750-900 a month for the mortgage. That's 9,000-10,800 annual. Typical rent is 1,550-1,800 per-semester, per-student. And then let's say 4 bedrooms, multiplied by two semesters is 12,400-14,400. Utilities are paid for by students (I might eat the water bill. I think that's normal around here.) So yea, I need to check on the other expenses. But just by looking over these rough numbers there is some cushion. If I live in my property for a year that 12,400-14,400 drops to 10,850-12,600. I'm still covering the mortgage, but I'm not saving anything.

**suedavids** · 06-01-2008, 05:35 PM

move slowly/ know your market

Originally posted by coaltrain View Post

I've been saving money for a down payment on a house for a while, but while saving I decided to go back to college. So now I work a lot of side jobs to bring in income (just about all cash) and, naturally, I don't have a consistent flow of pay stubs. I want to buy a student rental property in the town my college is in; I have $10,000 for a down payment. I know No-Doc loans aren't being taken anymore and providing pay stubs is pretty standard. Do I have to wait until I'm finished with college and get a full-time job before I can be approved for a loan or is there another way I can go about it?

The student houses in this town are pretty cheap ($95,000-120,000), the school has been improving/booming for the past few years and students are always looking for an off-campus house. I'd like to jump on this while the market is where it's at. Or do you think I'll still be able to find similar deals in two years, which is when I graduate?

Thanks in advance.

The housing market is not like the stock market where you will miss an upward movement in a short amount of time. A housing recovery may take about 3-5 years. Where you may see a difference is in the amount of foreclosures and auctions. However you will notice that there are some huge auctions coming up this next weekend in the D.C. area. These are already foreclosed property that could not sell so now on the auction block. May for 50% or more below original price. This is what is causing a downward pressure on the entire housing market. Looks like there is still downward movement until the foreclosure situation turns around.
Foreclosed Properties: Buying Foreclosed Home, Properties & Foreclosed Home Listing For Sale

Can I Buy a House Yet?