I also want to say, I'm closing on my place in 3 days. Just viewed a house in NE Portland asking $425k, but would need about $5k in updates. I think I'll buy it then sell it for $1 million just to troll Doc.


But in all seriousness, it is a nice house, bit I would only offer $390 due to our only having 1 bathroom. And the built in shelves are covered in lead based paint.

Seems very likely that if doc is not trolling, that either he is lacking lots of information that would be important, or that the buyer got a good deal, which also happens. The market is not perfect information or perfectly liquid.

What do I look like? True Car?

What information is important?

What if the buyers bought a 150k house for 69k? Wouldn't be the first time in the US

First time home buyer here. I am in my mid 20's and financially ready to buy a house. My current plan is to purchase a 3B2BA and rent out one of the rooms. I would much rather have the house to myself but I can be away from the house for a long time and I need someone to look over the house while I am gone. Although this isn't normal, I was gone 9 months out of my first 10 months this year.

I am planning on getting a 7year ARM at 3% since if I were to relocate to new state/city within the company, the company will pay for all the expenses and I plan on moving within 5. And I also like to stay ahead of the mortgage payments, just in case something were to happen to me.

Since I am going to live in the house along with another person, my requirements won't be as strict as others but will require to see a pay stub (accepting only full time workers and preferring a college degree), background check, credit history, security deposit and sign a lease agreement. Along with that, I will ask them to split the utility and cable bills with me, that way, they won't be careless with the electricity while I'm gone during the summer or winter.

With that being said, do you guys have any advice for me in re: purchasing the first home or living with your tenant?

Also one quick question, would anyone ever cough up an additional 60-70k for a better home? I obviously would not purchase a home if I cannot assume the mortgage myself but I would be living a little bit tighter.

What do you mean by this?

Trust me that this isn't one of those times.

If you are going to be moving in five years, why do you want to buy a place? In buying a place, you are going to have closing costs, pmi, and the upkeep is going to be your responsibility. Given all that and plus you can be gone so much, you sound like a better candidate for renting.

Well, each month I am going to have a mortgage payment. With any extra money I have, I would like to pay the following months mortgage payment also.

You'd rent and give the lessor 600-800 a month for a place just to store your belongings, instead of building equity on your home? The closing costs are mostly covered by sellers in my market and as I said, my company pays for relocation, meaning they will hire a realtor on my behalf and take care of all the expenses for me.

Every minute.

It doesn't work like that. No matter how much you pay in January they will expect the full scheduled February payment. Any extra you send will go towards principal reduction.

Yea I mean I still would make extra payments each month if possible. But thanks for the info.

I think its rare but it depends on the mortgage. Friends of mine have a mortgage where they can bank something like 3-6 payments. So basically they can make additional payments applied immediately to the principle and they get a sort of credit for that amount. If they then miss/skip a payment the amount of their banked credit gets decreased by the amount of the payment with no penalty.

I know you definitely can do this with car payments so I don't see why you can't do this with a mortgage. Just need to find a lender who agrees to it at the time of loan origination.

If you are on the road hundreds of days per year and plan on moving in 5 years, why even bother with buying a place and becoming a landlord? Seems like a clear case for renting.

What does a rent vs buy calculation look like in your area?

and how much equity are we actually talking about after five years?

Having been in a similar situation in the past where I was out of town 75% of the time, renting was a no-brainer. This was in an expensive urban area where renting was cheaper than buying.

Yes. If you are renting and something happens while you are away, the landlord is there to take care of it. If you are buying and something happens while you are away, it might wait until you are back even with a renter there.

The biggest issue I have is you being gone so much AND you want a tenant, too!

Banking payments is definitely the exception when it comes to loans. Another common difference is that with a car loan you can usually pay the whole principle back without penalties while with a mortgage there's often a penalty for pre-payment. In Canada its often a penalty for paying back more than a percentage (commonly 20%) of the original loan amount in a year).

Depending on your definition of "often", this is not true in the US.

I guess even in Canada its actually more like "most people choose mortgages that have pre-payment penalties" even though there are quite a few open mortgage options available.

Although I could see that being different in the US where the typical mortgage length is much longer than it is in Canada. I assume people are more willing to take closed mortgages when its only for a 5 year term.

You're going to be the seller in 5 years. Either way you will end up paying them.

in which my company will cover the cost.

Well I can't find the main shut off valve. But there is a shutoff valve leading in to the hot water heater which kills the hot water. The good news is the problem with the leaky faucet seems to be confined to the hot water knob.

I plan to try to tackle that next weekend. For now though if I turn the hot water knob off really hard with both hands - the faucet leak almost stops. Problem Solved!

I'm really not encouraged though given that my big home improvement jobs this weekend were a) fix the toilet chain b) clean the moldy bamboo mat on the balcony and c) clean my little grill. These jobs required not one but two trips to the hardware store. I finally got started, brilliantly, right at sunset. Within 30 seconds I looked like a chimney sweep coated in soot and sweat. It was like a Buster Keaton movie, but with grunts, groans and a steady stream of obscenities.

The bamboo mat is still moldy but I'm hoping some sun and the half gallon of bleach I dumped on it will do some magic.

The grill is marginally cleaner but the rest of the house is much dirtier for it. Trying to maneuver that thing around was more awkward than a dead body.

Despite buying a chain at the hardware store I fixed the toilet with a paper clip. But now the handle won't pull back up to off w/o manual help. Gonna go for a new handle but I'm sure something else won't work right. **** did I just leave the toilet running all day?

I have a long long way to go to get good at this.

If you're [possibly] moving in 5 years and have a roommate lined up I suggest buying a townhouse or condo. Once you relocate your roommate can now become a tenant, wherever you relocate you may borrow into your loan as a second down payment to buy a 2nd house in the new city while keeping first property, and continue to grow net worth. Gluck

Also the bigger the house the bigger the repairs may bring including basic maintenance and upkeep

I considered that too, but that may not work. Perhaps I wasn't too clear in my first post about the relocation. If the company were to relocate me, they would give me time off to fly me out to my new city to go house hunting and hire a realtor to sell my house on my behalf and cover all the costs associated with it. If they are not able to sell the home within 30days, they buy the house from me based on the appraisal of their choosing and a appraisal of mine and whatever they come to terms on.

The reason I mainly want a tenant/roommate is I want someone to mow the lawn for me and notify me if something were to happen to my house while I'm gone. I have considered a townhouse or a condo, however, I couldn't any place for my liking within my budget.

You don't want a tenant/roommate, you want a live in property manager!

and if you change employers at any point in the next 5 years and that guarantee disappears?

Important to model all plausible scenarios - not just the rosiest one.