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Any younger guys have experience buying a house?

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I bought a house at 22 in my name only, and I rent out rooms to my friends. I was able to get a ~$120k loan at 6% interest for $1200 a month here in Houston. I was making $37k /year at the time. Now I'm going through a refinance and the house has gone way up in value.

That said, it's a huge responsibility. Factor in everything - electric, gas, water, insurance, POA fees, roommates not being there, etc - and see if it's still worth it to you. Think about the lawnmower you have to buy, the refrigerator you have to replace, the insane cost of an air conditioner in the summer...

I didn't really have any spending money for two years. Fortunately now I'm making quite a bit more money, and I don't have to worry about it anymore, but those two years were extremely stressful. The house was a good investment and I'm glad that I did it, but I don't think everyone can be that lucky. Just be smart if you're going to buy.
 
We'll have to look more into how much a mortgage payment on a $600k-ish place would be for varying down payments. At this point, we can each reasonably pay around $1500-$2000 per month towards housing expenses in an emergency situation - i.e., unable to find tenants. Which I hope would be way more than enough to cover it, and judging from our experiences apartment shopping.. finding tenants in this area shouldn't be a problem at all, especially for a nice place and even more so if we were willing to rent rooms for around $800 instead of $1k-$1.2k.

In the event that we both wanted to leave Boston... We're pretty sure we could rent it consistently and for enough money that we could use that money to pretty much pay people to completely take care of it for us, of course depending on how much the mortgage ends up being monthly. That's what the couple who owns our current place does, and the house kind of sucks and is in a not-so-nice area. They still get $3200/month for it easily and pay a management company to take care of everything.

Anyway we've got a year and a half or 2.5 years to think about it and see where we're at financially and everything. Just wanted to see if anyone else had done something similar
 
bought my first house at 26; a 5br/3br ranch for about 430k. The biggest pain wasn't the closing or anything, it was the time required to look and find the right house and worrying about inspections and stuff.....

but like everyone said.... DON"T CO-SIGN WITH FRIEND

Friend today can be enemy tomorrow.... DON'T DO IT









DO NOT DO IT.
 
repoman0 said:
We'll have to look more into how much a mortgage payment on a $600k-ish place would be for varying down payments. At this point, we can each reasonably pay around $1500-$2000 per month towards housing expenses in an emergency situation - i.e., unable to find tenants. Which I hope would be way more than enough to cover it, and judging from our experiences apartment shopping.. finding tenants in this area shouldn't be a problem at all, especially for a nice place and even more so if we were willing to rent rooms for around $800 instead of $1k-$1.2k.

In the event that we both wanted to leave Boston... We're pretty sure we could rent it consistently and for enough money that we could use that money to pretty much pay people to completely take care of it for us, of course depending on how much the mortgage ends up being monthly. That's what the couple who owns our current place does, and the house kind of sucks and is in a not-so-nice area. They still get $3200/month for it easily and pay a management company to take care of everything.

Anyway we've got a year and a half or 2.5 years to think about it and see where we're at financially and everything. Just wanted to see if anyone else had done something similar
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I don't think affording it together or renting it out together is your issue. Your issue is going to be when one of you decides you want out of the deal. Then what? It's gonna be a disaster with both of you on the mortgage.
 
Fritzo said:
Buying a property that depends on income from sources other than your own is a recipe for disaster.
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This.

Very unlikely it works out long term.

Personally, I would try to find something much more feasible price wise than 600k. Not sure about your commute, but often you'll find much better pricing in smaller areas (this is far easier to do in the mid-west).

If you can find something that you can realistically affording with a tight budget, then try to buy it yourself. Make an arrangement with your buddy to give him a discount on rent, and then find the others you need to make up the difference. I've even heard of those who can squeeze most all of their expenses out of their tennants, so if you can do that, you might even make money on the deal. Just save up for unexpected expenses.
 
OP, I wouldn't tell you to do it or not to do it, but here are a few things to think about over the next year or two.

- In my experience as a renter, owner, and landlord, the more expensive a property is, the more sense it makes to rent it. The cheaper a property is, the more sense it makes to own it. There are a number of reasons for this but the biggest one is that rents don't seem to keep up with RE prices as prices go up.

- I'm not sure a bank will even allow you to do what you're considering. But there's an easy way to find out. Call a couple of them up, or call a mortgage broker. Tell them what you want to do. They can take your info and give you suggestions on loan products that might make sense for you. Then you can run the numbers yourself and see if it would be a good deal.

- Make sure you factor in all the expenses you will encounter: PITI, PMI (if you're not paying 20% down), closing costs, repairs (if the house is in good shape this shouldn't be too big, but there should be some allowance), utilities, vacancies (I would assume 15-20% to be on the safe side). Act like an investment banker: run all the numbers, and each of them should be pretty predictable. Zillow can tell you what the property taxes are for example.

- Make sure you have a plan for when you or your buddy wants to move on with their life. Could be for any reason: marriage, following a job, just tired of it, whatever. I would personally be very hesitent to enter into a transaction like this with a friend, but I was going to do it, I would probably try to draw up a contract that says, in essense, that when someone wants to leave, you will both split the cost of an appraisal. If the valuation (minus 8% for RE fees and closing costs) is more than the remaining principal, the person who is staying will make periodic payments to the other person in the total amount of half the equity, the reverse will occur if the valuation is less than the remaining principal (i.e. the house is upside down).
 
purbeast0 said:
nah, but when that happens, he flat out won't be able to afford it if he's paying $4k/mo.
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If the rental market is as tight as he's claiming, and he keeps the other three rooms occupied at $1k each, he'll be solvent. I don't know if he'll be loving life, but he'll be solvent.
 
Blackjack200 said:
If the rental market is as tight as he's claiming, and he keeps the other three rooms occupied at $1k each, he'll be solvent. I don't know if he'll be loving life, but he'll be solvent.
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im talking about the inevitable situation where he will have no roomates and will be the sole owner of the house, and will be paying a $600k mortgage himself and paying $4k/mo himself

(he said earlier him and his roomate could pay $2k each if need be).

if that is the case, he simply will not be able to afford it on his salary.
 
If the rental market was tight, why would he have no roomates? Yes, you have to figure some vacancy in there, but renting out rooms in your house is not rocket science.
 
Don't buy a house with anyone. Have your parents make a down payment for you. On a $600k house my monthly mortgage is going to be $900/month because my parents will make a downpayment for me.

Now my problem are the 30 multiple offers that I keep fighting and keep losing
 
Tommy2000GT said:
Don't buy a house with anyone. Have your parents make a down payment for you. On a $600k house my monthly mortgage is going to be $900/month because my parents will make a downpayment for me.

Now my problem are the 30 multiple offers that I keep fighting and keep losing
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Don't forget the part where you give the house to your girlfriend as a Christmas present.
 
We bought our townhouse brand new when I was 23 and now, 8 years later, we are both still glad we did. Buying new and a townhouse meant there were few issues to deal with and all external maintenance is covered by the HOA (I know, another thread topic). We are now looking at a slightly larger single family dwelling but for young married folks without kids (yuppies if you will) this was great.
 
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