Hey everyone,
I am a college student and I have been seriously considering buying up a foreclosed house in St. Louis area.
I have 20k cash and I am thinking about using the possible 8,000$ tax credit.
Houses here in GOOD neighborhoods are as low as 25k. Not so good neighborhoods are down to 4,000$.
I am looking at the good neighborhoods in a price range of 20-50K. I would have to hold on to the house for 3 years if I used the Tax credit, but I don’t see the market returning before then so I don’t mind.
Do you guys have any suggestions? Is this smart? Or should I put my money some place else?
I plan to fix it up with a friend of mine. We both have worked in fixing houses up before. I then plan to rent it out until I can sell in 3 years.
Thanks
Umm, well I’ve read all the requirements for using the tax credit. I qualify for them all.
Maybe I wouldnt be able to rent it out, but live in it. For 8K, ill happily do that.
Down_to_earth said:
Jun 16, 09 at 6:05 amI will answer the way I answered before from my research today- There are areas reporting multiple bids and it’s not spring yet. By the time that people figure out the market has shifted , it’s on the way up. Then all the people afraid they are missing the boat will start buying- and you will see multiple offers and market surge. I don’t think it will be slow, I think people will be afraid to miss that once in a lifetime deal and I think it will be like the day after Thanksgiving sales. Why? Because that’s human nature- no one wants to miss out.
Look at the posts that have been discussing multiple offers , it’s starting (and according to some financial analysts , the hard hit areas, CA, NV, FL are starting first
Alterfemego said:
Jun 16, 09 at 2:30 pmCan’t use that $8000 for a fixer upper. It’s only for first time buyers. And if you think you can get a loan on false pretenses, & use that $8000 - think Federal prison.
It may not be the wisest investment at this time. There are two big issues, #1 housing prices could still decline, #2 there aren’t enough buyers out there right now. If you spend your money fixing this up and it’s sits on the market for more than 60 days, you have pretty much lost your investment. The day’s of flipping are over, unless you are a big time investor with ton’s of cash or people who will provide money for you to invest. I would think of another line of work right now.
gimp3836_sbcglobal_net said:
Jun 16, 09 at 4:15 pmAlterfem is correct as far as she went. You can’t legally get the tax advantages you are seeking but you can get some depreciation on a rental.
All you will hear are opinions and since mine doesn’t stink any more than anyone else’s does I may as well give it to you. IMO you may have already missed the BEST time to get in but not by much. If you are going to buy now, then do it fast.
A second option I see is as follows: President Obamas’s financial "Plan" is calling for people who are upside down right now to get help. His idea of help is essentially a loan refinance of up to 105% of the current value and a five year reduced interest rate. Does this sound familiar??? Yeah, to me too. This is another Adjustable Rate Mortgage. The people in trouble now and those who have already walked are in the situation because they bought more house than they could afford by using "Creative" financing up to and including reverse amortization. What do you suppose will happen the day these five year ARMs start adjusting and people’s payments double or more? I think there will be another window in about five years when you can buy at significant discount.
OK, there’s my opinion. The decision is yours and Good Luck…