Thursday, August 21, 2008

Condo Time?

As the dollar weakens and oil prices continue to rise, I constantly find myself veering toward one asset class that seems incredibly undervalued, in high supply and with relatively low demand: real estate, and specifically a condo for myself.

Every month when I pay rent, I'm realizing I'm helping someone else grow equity in their real estate. My lease is up at the end of November. I haven't really been enjoying much of the facilities here nor the general upkeep of the common areas. Coupled with falling prices and the fact that I will be here for at least another 2 years, I think it would be a great time.

My only real concern is with the availability and cost of credit. While my parents are willing to help me out with the 20% down payment, I will still have to find me a lender and that will be tough.

However, if I can manage a rate of 6% or less, I should be able to purchase between $200-$250K condo at my current rent payments. What I'm hoping for is to low ball a $250K house for about $200K and then see it pop back to its true value within a year.

I'm going to start condo hunting soon.


Ellen said...

You do have almost 8k in your bank account, but do you really want to drain it on a condo that you might only be in 2 years?

How much would you borrow from your parents? That's very nice of them. I am sure my parents would be able to donate to me too, but I am not sure I would be comfortable taking out a loan with them.

This is a big deal, very exciting! I look forward to hearing how you find a place and what you decide to do. :)

Anonymous said...

that's putting an awful lot of faith in (1) the housing market in general (2) the housing market in your area, specifically, and (3) your bargaining skills/the seller's desparation to get rid of the condo.

So what you might end up with is a condo in an area that you are not actually going to be able to sell for a profit if you end up moving in two years.

By the way, it's going to be a lot easier to attain your goal of hitting $1,000,000 by 30 with frequent loans from your parents!

Pia's blog said...

Well. I also have same idea like yours. I am also hunting a good type of condo. I think it's gonna be more interesting. Thanks for sharing.

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