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My plan for the next year - doable?

Posts (34)

  • neatoburrito

    neatoburrito

    #296431 - 14 years ago

    (this is bit long and boring and I posted this somewhere else, but I need advice)

    So... I'm getting older.

    I turned 25 in September and recently, people have been advising me to buy a house. Also, I've been seeing a girl for the past year and five months and we've decided to move in together. Long story short, I want to buy a townhouse/duplex and live with her in one side and rent out the other side. I currently rent a room from a guy that built a house in north Austin when he was 24 and I have been living there for three and a half years. To make another long story short, it has been the perfect place to live 95% of the time and I have encountered none of the common roommate problems. We used to party all the damned time and the guy is now like my older brother. I feel like this is a good time in my life to make a change and I want to get a new place.

    Here's the skinny on my financial situation: after my last paycheck this year, I will have cleared almost exactly $60,000 for the year. Barring any unforeseen losses of common sense, I plan to be at that job for the next thirty years or so... A steady paycheck is something that I feel comfortable about and I plan to keep seeing them. I started a 401k fund two and a half years ago that is now worth ~$11,000. I can take out up to a $5,000 loan against myself and can choose how long I want to take to pay myself back. It's weird how it works, but I've done it before and it does work. I figure that I could use that money for any sort of down payment that I need make. I also have a VA loan coming to me as I served four years in the US Army, 1997-2001. My inactive-ready-reserve status will be over in June of 2005, at which time I will receive my honorable discharge papers in the mail.

    The one thing I am worried about is my credit. I don't currently owe any financial institutions money except for Mitsubishi Motors Credit of America; I'm making the car payments to them; roughly $460/month. I'd say than only about 75% of the payments I've made for the past three and a half years have been on time because I'm a horrible procrastinator. Also, in the past, I had owed ~$1100 dollars to two different institutions for the better part of five years. I thought that I could ignore the debt, but when you change addresses and file tax returns; people have a way of figuring out where you live. Two years ago, I paid off both of those those debts within three months of each other and I haven't incurred any major debt since then. I've never looked at my credit report/credit score but plan to do so at http://www.truecredit.com/ after the first of the year.

    If everything goes according to plan, I'd like to be moved in to a new house by the end of August 2005. If I did, then I'd be all:

    hooray.jpg

    Here are my questions:

    1. The VA loan: I've been told it's easier to go through than a conventional loan; is this true? What is the whole process like?
    2. Living in one side/renting the other: anyone done this as well? It sounds like a good idea, but common sense tells me that it could go horribly wrong if the wrong people move in. I've also been told of companies that I can pay to collect rent for me and take care of any repairs that need to be done. Is this true? Has anyone dealt with a company like this before?
    3. Moving in with your girlfriend: as cracked up as it's meant to be? Right now, I still have my own place and he has hers, but I'm almost always at hers as it affords us more privacy than at my house. I'm pretty sure I'm ready for it, but we've agreed to take it slow and neither one of us have plans for marriage any time soon. She just graduated from UT two weeks ago and she'll be a bilingual elementary Spanish teacher by August, making roughly $33,000/year. I hope this is enough so that she can pay for her fair share of the mortgage/utilities.

    I've obviously given this tons and tons of thought but have yet to move past getting information for this kind of stuff online. If anyone has serious practical advice for me, I'd really, really appreciate it and maybe post some more pictures from my /images folder that are LOL.

  • Jennifer999

    Jennifer999

    #296434 - 14 years ago

    In reply to neatoburrito, #1:

    sorry I can not give advice. I can relate to pretty much everything in your post, so will watch what others say, because it may help me.

  • neatoburrito

    neatoburrito

    #296627 - 14 years ago

    In reply to quazz4life, #4:
    What is that kind of company called? I'm looking for a listing in a telephone book or something.

  • RyanL

    RyanL

    #296632 - 14 years ago

    In reply to neatoburrito, #5:

    I am going through the same kind of thing, 5k down on a 5/1 ARM that starts at 4%

    My Mom and Dad have 2 houses they rent, I will see what kinda company maintains their properties for em.

  • SMM

    SMM

    #296655 - 14 years ago

    Shouldn't pics of your significant other be a key part of this thread?

  • BigBen

    BigBen

    #296673 - 14 years ago

    The VA loan is a good thing, as is the renting out space, it gives you "passive income"

    A couple things - from this seminar I had on real estate stuff

    Do some research into the area you plan to build in if it's growing well and looks to continue getting something you can rent out is a really good idea.

    consult a good Tax Attouney/ accountant - inome off of investments and capital gains (passive income)is far lower than income tax, he could literally save you thousands of dollars a year on taxes.

    for christ sake screen your tenants - This was really applicable to people who were looking to buy large properties and rent out multiple units. With just a duplex it'd be kind of pointless ot have a manager, but if you think some people are prone to do damage or not pay dont be afraid to adjust your payment conditions a little.

  • Drain_You

    Drain_You

    #296851 - 14 years ago

    In reply to Jennifer, #2:

    I can only halp you on the girlfriend part, GO SLOW. My ex and I went to fast and now we are no longer us. So I would talk it out with her to see if you guys are both ready for that step.

  • neatoburrito

    neatoburrito

    #296856 - 14 years ago

    In reply to Drain_You, #9:

    You moved in together when you were 19? Kids these days...

  • RDM

    RDM

    #296868 - 14 years ago

    In reply to SMM, #7:

    No worries. Ive seen pics. And she is totally doable.

  • SMM

    SMM

    #296874 - 14 years ago

    In reply to RDM, #11:

    This still doesn't change the fact that I haven't seen them.

  • BigBen

    BigBen

    #296886 - 14 years ago

    In reply to neatoburrito, #1:

    reading the second part,

    With the VA guarantee your credit shoudnt matter that much, and with a healthy down payment you may be able to get yourself a really low interest rate. Possibly with a good payment structure low enough that what you woudld be taking in as income on the rented part of the dupex could match or exceed your mortgage payments.

    like I said before I'm just kind of ameturely intrested in this stuff, consultiny a tax attourny and an accountant would be very easily worth the money.

  • Gavino

    Gavino FIRST Member Star(s) Indication of membership status - One star is a FIRST member, two stars is Double Gold

    #296892 - 14 years ago

    goodluck with your plan

    bring pickles

  • neatoburrito

    neatoburrito

    #296897 - 14 years ago

    In reply to SMM, #12:

    mekka lekka hi mekka hiney ho

    lets.jpg
    meletty.jpg

  • Drain_You

    Drain_You

    #296901 - 14 years ago

    In reply to neatoburrito, #10:

    We didnt move in together but he started talking about marriage and all that stuff, and I was not even close to being ready for that. Scared me a little.

  • neatoburrito

    neatoburrito

    #296906 - 14 years ago

    In reply to Gavino, #14:

    bring pickles


    totally dood

  • RyanL

    RyanL

    #296916 - 14 years ago

    In reply to neatoburrito, #15:

    You are fucking hawy in that second pic. I wish we both were gay.

  • BigBen

    BigBen

    #296921 - 14 years ago

    In reply to RyanL, #18:

    now that's the old DE . . err RyanL right there.

  • Wizbang

    Wizbang

    #296979 - 14 years ago

    In reply to neatoburrito, #5:

    In reply to quazz4life, #4:
    What is that kind of company called? I'm looking for a listing in a telephone book or something.


    I rent through one of these, and it's called Johnson and Ray Investment Realty. Investment Realty is probably the part of that you want since Johnson and Ray are the owners and they don't live in Texas(although I've only met Johnson; I guess Ray could be in Texas).

  • Jennifer999

    Jennifer999

    #296997 - 14 years ago

    In reply to Drain_You, #9:

    Why are you repling to me?

  • RyanL

    RyanL

    #297003 - 14 years ago

    In reply to Jennifer, #21:

    I guess she figures you need relationship help.

  • RDM

    RDM

    #297006 - 14 years ago

    In reply to RyanL, #22:

    MINE AND JENNIFERS LOVE RUNS DEEPER THAN MY ASS CRACK!!! OUR RELATIONSHIP NEEDS NO HELP!!!

  • RyanL

    RyanL

    #297008 - 14 years ago

    In reply to RDM, #23:

    Can I watch you 2 make love sometime?

    Now quit peeing in NB's thread

  • RDM

    RDM

    #297016 - 14 years ago

    In reply to RyanL, #24:

    yes.

    anywho. I dont know nothing about no mortages or loans or all that hoo-ha. But what I do know is that if youve been together for a year and a half, it wouldnt be such a bad idea to move in together.

  • webgecko

    webgecko

    #297021 - 14 years ago

    In reply to neatoburrito, #1:

    You should be fine. On the VA loans, when I got out you could actually get a VA loan while on active duty, but that may have changed. You do need to get the certification paperwork for the ank (the gaurantee.) It would do you a world of good to get someone to help you who is a VA rep. DAV, VFW or American Legion have these people who are paid y the VA to advocate for vets.

    Downpayments are generally 10% here.

    Save enough on the side so you can make one extra housepayment (applied only to capital.) I read that this practice can shorten repayment by 5 years (make sure you tell them its applied to capital debt only.)

    I think you're way ahead of the curve.

    Also: my sister-in-law in in Austin. Their house was contaminated with lack mold. Pay the money for everything to be properly inspected. Hers was a new house and it had to e destroyed and reuild (the plumber misconnected the refridge water hoses ... thats how it started.

  • The_Arsonist

    The_Arsonist

    #297039 - 14 years ago

    Cute girlfriend. I can somewhat lend advice on both renting out the unoccupied half of the town home, and moving in with your girlfriend.

    Usually people that rent a larger property, or multiple properties use Property Management companies. The company I run works directly along with many of these companies, doing residential and commercial irrigation our warranty plans include extended system maintanence. I can tell you that these companies can be quite ruthless with your tennants, which is a plus for you. You can have them arrange things from just collecting rent all the way to having the lawns mowed. Although, management companies do cost a decent amount of money, generally the more duties you have them control, the more its going to cost you. I wouldn't recommend using a management company if you are renting out a townhome in which you already reside, unless you are entirely incapable of operating a hammer or screwdriver (which I don't believe to be the case). You may also want to review a bit of real estate law in regards to tennant screening, if you deny people residency they CAN file suit against you for a variety of discrimination lawsuits, so you'll want to be careful with the questions you ask and how you go about denying people residency.

    Now... the merging couple issue.

    Main thing is you're going to be combining two lives, into one. Whether you like it or not, once you move in together the only thing different from being married, is her last name. You should sit her down and both of you present your outstanding bills. It doesn't matter how long you've been together, many people hide money troubles from their signifigant others, even spouses. Since you are both moving in together you are going to want a full picture of your debt load, especially one of you for whatever reason ends up unexpectidly unemployed. If you have a good relationship this should go off without incident. Be ready to make alot of compromises. You may not feel that anything is going to really change once you move in because you spend most of your time at her place, or with her already. Trust me, it does. At the end of the day you still can go home to your own place and she goes to hers. This will no longer be true, you will see each other alot more and getting some personal time is going to be alot more difficult. I love my fiance to death, but sometimes I just need to be by myself, living together makes that hard. You have to leave to get away from a person, or if you're lucky have mildly conflicting work schedules that will allow you to have some time to yourself, even if it is only an hour.

    All in all, take your time. Don't dive in head first, keep researching all your options and keep your butt covered. Good luck and Godspeed.