First Home

[marshhunter]

What was the first house you purchased?

I will be looking to purchase in the next couple of months. The current housing market has me confused as to which way to go.

Which would make the most financial sense?

Do I purchase a new home, with the plan to sell it in 5-8 years?
Do I purchase a pre-owned home, with the plan to sell in 5-8 years?
Do I purchase land (1-2 acres) and put a small barndominium on it, in the location of where I would want the shop, and then build a house in 5-8 years? This would likely max out my budget.

My end goal is to have a couple acres to live on and not have to deal with HOA, and have a shop for ranger, boat and projects.


On the other hand do I sit tight and hope for the housing market to cool off? House prices are absolutely insane right now, and raw land prices are not far off.

-Stephen

[bugleboy]

Prices do seem crazy! But, guess what the interest rate was on my first house in 1981? 18%! But back then, you could get close to 15% on a CD! My how times have changed!!!

[b.latiolais]

Originally Posted by marshhunter

What was the first house you purchased?

I will be looking to purchase in the next couple of months. The current housing market has me confused as to which way to go.

Which would make the most financial sense?

Do I purchase a new home, with the plan to sell it in 5-8 years?
Do I purchase a pre-owned home, with the plan to sell in 5-8 years?
Do I purchase land (1-2 acres) and put a small barndominium on it, in the location of where I would want the shop, and then build a house in 5-8 years? This would likely max out my budget.

My end goal is to have a couple acres to live on and not have to deal with HOA, and have a shop for ranger, boat and projects.


On the other hand do I sit tight and hope for the housing market to cool off? House prices are absolutely insane right now, and raw land prices are not far off.

-Stephen

I'd do this. The other two options sound like you'd be buying high and selling low...
Plus, you could lock in an insane interest rate on your property you plan to stay on forever.

[panhandlehunter]

Originally Posted by b.latiolais

I'd do this. The other two options sound like you'd be buying high and selling low...

With the way it’s been it would be like buying high and selling higher.

[FVR JR]

I bought my 1st house back in August. Been looking for a few years trying to get in the neighborhood I grew up in. Small houses built in the 50s people want crazy money for because rich folks tear them down and build mcmansions. Ended up getting lucky buying from a family friend for a fair deal on a nice original home. I could have bought a much bigger, much newer house for less, but I wanted the area. I'd buy the land and build up as budget allows until you get to your ultimate goal. Holding out and getting what I wanted was worth it over buying/selling, just my opinion.

[TKRanch]

If planning to stay in the home for only 5 years, just very important to remember that you make your money when you buy it, not when you sell it! Sometimes, when only holding a home for a few years one does not realize any real profit after selling costs are calculated. The market is certainly crazy and maybe it won't stop, but just remember to buy right,then all is ok. Good luck!

[Bassdeer]

Do I purchase land (1-2 acres) and put a small barndominium on it, in the location of where I would want the shop.

This but don't build a house. My buddy did this and made half house and half storage. then a few years later he built a pole barn and then finish the rest of the barndo out for his house.

[Goldensammy]

Originally Posted by marshhunter

What was the first house you purchased?

I will be looking to purchase in the next couple of months. The current housing market has me confused as to which way to go.

Which would make the most financial sense?

Do I purchase a new home, with the plan to sell it in 5-8 years?
Do I purchase a pre-owned home, with the plan to sell in 5-8 years?
Do I purchase land (1-2 acres) and put a small barndominium on it, in the location of where I would want the shop, and then build a house in 5-8 years? This would likely max out my budget.

My end goal is to have a couple acres to live on and not have to deal with HOA, and have a shop for ranger, boat and projects.


On the other hand do I sit tight and hope for the housing market to cool off? House prices are absolutely insane right now, and raw land prices are not far off.

-Stephen

I see you are in Cypress. I am as well. You planning to stay in the area? If so, I'm guessing 1-2 acre lots are tough to find. My wife and I purchased our 1st home in 2009. Sold that home and bought a new-to-us home in August 2020. We only planned to stay in our 1st home 3-5 years. I wanted to move out to the sticks somewhere and build on a couple of acres. Things changed after kids. We have two boys in grade school, so a family-friendly neighborhood and schools were our top considerations when buying our 2nd home. HOAs suck but it is a sacrifice I was willing to make, at least until our kids get out of school. If you are married and have kids or plan to have kids, consider how/where you want them to grow up and where they might go to school. Whatever you do, don't become house poor, especially if you are married. This can be very stressful. Also, when making your decision, be sure to pay attention to property taxes and take those into consideration when you are house hunting. They vary from neighborhood to neighborhood, so do your homework. Best of luck.

[FCoDxDart]

I bet prices only go up, you won't lose money on a house if you decide to buy it. Especially as popular as Texas has been. If you can do option 3 and be fine financially I'd do that if you can find land where you will like to be and not want to move.

[slayr]

I’d buy the land and build. You get exactly what you want and with a little effort on your part you can build a good sum of equity with just your sweat and time.

I did this on my last couple of houses and turned incredible profits when selling.

[boy wonder]

Only you know what's best, do what you want. But, I intended to sell my first house after about 5 years, sold it after 27 years. I hate moving!

[ccbrown50]

I purchased a small cheap fixer upper for the first house, beautiful piece of property but the house needed lots of repairs. I renovated it doing most of the work myself and sold it after two years. Two years is key to not pay capital gains tax. Took the profits and purchased my dream house. Wouldn't change a thing.

[150class]

In the same boat. Was starting the process 8-10 months ago but held off last second. I have no idea what to do either but believe we are going to say screw it and start again. Rates are low and hopefully the bubble doesn’t pop.

Would love to do land and a barndo but not many areas around the woodlands to do that.

[Texastaxi]

We picked option 3, and we LOVE our barndo.
The only problem is that my wife says, "I wish I would have known that I'd like this as much as I do ... we'd have just made it bigger and been one and done".

[BLee15]

I built a new house and moved in July of 2020. Our floor plan when we signed the contract in 2019 was $310k same floor plan is now $380k. This is in Fort Worth. IMO if we move we’re building new again. Really nice being able to pick everything out how you want it and don’t have to worry about anything major going wrong for at least 10 years probably fingers crossed.

[StrayDog]

Whatever you do, I suggest you purchase something well below what you can afford and put a substantial down payment to reduce interest/avoid pin. For example, I was able to make my monthly payment and put an extra few hundred dollars a month towards principle. I also made it my main goal within the first 12-18 months to get at least 6 months ahead on my payments so I had a cushion should I become unemployed.

Every chance I had I’d make even more extra payments and/or pay as much as I could towards the principle. Doing this I was able to easily pay my house off in less than 10 years and that was one of the best feelings I’ve experienced. Plus, I put myself in a position to not be a slave to my home - want to go on a nice vacation, no problem because the cost of my overall bills was way below my earned income. Lots of friends didn’t do this and they live an unnecessarily stressful life.

[Throwin Darts]

Originally Posted by marshhunter

What was the first house you purchased?

I will be looking to purchase in the next couple of months. The current housing market has me confused as to which way to go.

Which would make the most financial sense?

Do I purchase a new home, with the plan to sell it in 5-8 years?
Do I purchase a pre-owned home, with the plan to sell in 5-8 years?
Do I purchase land (1-2 acres) and put a small barndominium on it, in the location of where I would want the shop, and then build a house in 5-8 years? This would likely max out my budget.

My end goal is to have a couple acres to live on and not have to deal with HOA, and have a shop for ranger, boat and projects.


On the other hand do I sit tight and hope for the housing market to cool off? House prices are absolutely insane right now, and raw land prices are not far off.

-Stephen

Unless you are paying cash, prices could come down but interest rates rise and you'd still end up paying more for the house.

Rates are at all time lows. That would be more important to me in making a decision.

[CaptainDave]

Originally Posted by Goldensammy

I see you are in Cypress. I am as well. You planning to stay in the area? If so, I'm guessing 1-2 acre lots are tough to find. My wife and I purchased our 1st home in 2009. Sold that home and bought a new-to-us home in August 2020. We only planned to stay in our 1st home 3-5 years. I wanted to move out to the sticks somewhere and build on a couple of acres. Things changed after kids. We have two boys in grade school, so a family-friendly neighborhood and schools were our top considerations when buying our 2nd home. HOAs suck but it is a sacrifice I was willing to make, at least until our kids get out of school. If you are married and have kids or plan to have kids, consider how/where you want them to grow up and where they might go to school. Whatever you do, don't become house poor, especially if you are married. This can be very stressful. Also, when making your decision, be sure to pay attention to property taxes and take those into consideration when you are house hunting. They vary from neighborhood to neighborhood, so do your homework. Best of luck.

X2 on thinking about kids or even possible future kids.

I couldn't tell you how many people I know (including the wife and I) that ended up selling their first home within 5 years and buying another in a different area because of kids and schools.

To be honest, it seems like a lot of first time homebuyers end up selling within a handful of years. There are various reasons for this. Some due to kids. Others change jobs or their current financial situation may allow for an upgrade, etc.

Oh and renting is not as bad as what some like to make it out to be. Property taxes are high in areas with decent school districts (especially in the burbs close to the major metro areas). Historically low mortgage rates make home buying look appealing, but most definitely check on the property taxes. This can impact your monthly payment substantially.

[DFWPI]

Originally Posted by panhandlehunter

With the way it’s been it would be like buying high and selling higher.

Market is crazy right now in DFW area. My clients have made several offers, above list price, on homes only to be beat out by higher offers with appraisal waiver.

The are not projecting, at least in this area, that it’s going to slow down anytime soon.


From my Make Believe World

[TA_Fab]

Just purchased our first home. Had to act quick and constantly check listings. In the end our realtor made it happen for us. Older home on a large lot / rural area no HOA. Couldn’t be happier with the purchase and interest rate we got. Trey Powers (sponsor on here) was great to work with.


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[BassMaster13]

Originally Posted by marshhunter

What was the first house you purchased?

I will be looking to purchase in the next couple of months. The current housing market has me confused as to which way to go.

Which would make the most financial sense?

Do I purchase a new home, with the plan to sell it in 5-8 years?

Do I purchase a pre-owned home, with the plan to sell in 5-8 years?

[COLOR="Red"]
Unless you're bank rolling, this is your best option. Find an older house in high demand area and update it. Sell in 3-4 years. Try to get closing cost covered by seller. Minimize cash out of pocket. Low down payment keeping cash on hand to do reno. [/COLOR]
Do I purchase land (1-2 acres) and put a small barndominium on it, in the location of where I would want the shop, and then build a house in 5-8 years? This would likely max out my budget.

Unless you have a lot of cash on hand this is a tough route to get finance at a good rate. While traditional rates are super low. In my opinion I would say this would be a good 10 year plan. Bardos only save you money if you if can cut out a few contractors. Then that might end up costing you more.

My end goal is to have a couple acres to live on and not have to deal with HOA, and have a shop for ranger, boat and projects.


On the other hand do I sit tight and hope for the housing market to cool off? House prices are absolutely insane right now, and raw land prices are not far off.

-Stephen

[bbqfan5909]

I bought my first home in Carrollton, in a highly desired area in the early 20s. Was in 2008 when the market was in a very bad place. It was right at the top of my budget, but my wife and I made it work. Only a few friends of ours did the same thing, but most rented downtown areas. We sold that property, paid off all student loans, cars, etc and put down 20% on our next home. We lucked out and very thankful.

[BrandonA]

For your first home I would go the pre-owned route with plans to sell few years later. Do that a couple of times before you buy land and build your dream home.

[Reaper]

I don't know your whole situation (wife, kids, etc) but if it was me, I would buy the worst house in the area you want to live in. Fix it up over the next 2-3 years and upgrade.

[Pineywoods]

My First home was a fixer upper that we bought when we first got married and we stayed in it for 7 years. I view home purchases purely from an investment standpoint. You have to buy right and be ready to pounce the moment you find the right deal because the market is crazy. I wouldn't be scared of a used home. We have bought 4 used homes in the last 9-10 years and moved into the 4th one last August. We average about 3 years in one place and then I flip it. We have been able to make between $30k-$80k in each sale by buying smart and watching the market in the area. I'm not sure what the housing market will do now with the current situation in our nation. Good luck in whatever you decide! Buying a first home is exciting.

[Mayhem]

Buy land and build as you go.

You can buy a house any time, but land, they ain’t making anymore of that.


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[RascalArms]

Originally Posted by Mayhem

Buy land and build as you go.

You can buy a house any time, but land, they ain’t making anymore of that.


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[BlackoutRam2500]

Location, Location, location. The rules of that game haven't changed. If you are looking to make money on the sale in 5 years make sure you buy something you can sell later.

In the greater Houston area a semi new home in a new subdivision will likely have to compete with newer homes in that same subdivision if you want/need to sell it in 5 years. That's something my wife and I didn't know when we bought in 2010 and needed to sell in 2012 because of a new job I got with Baker Hughes in Colorado.

Interest rates are low and according to the fed they won't be coming up soon so borrow as much as the bank will lend you and buy something in the best area you can... you don't plan on keeping it anyway so payoff doesn't matter. So long as you can make the note, pay the taxes and most importantly pay yourself first every month don't get hung up on sales price.

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[WyoBull]

When we lived in Austin we knew we were only going to be there another 5 years when we built our house. We worked very closely with our realtor based on only being it it for 5 years.
The main focus was the floor plan and building something that was going to appeal to the most people when we did sell.
So, we built a home based on that premise and sold it 5 years later for a profit and moved back home to where we are now.

Be reasonable, patient and don't get pressured into doing something you will regret. Your home is the largest single investment most people have at any point in their lifetime so you want to treat it as such.

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[jer_james]

I'd find something on the outskirts of a Family friendly area you really like in a new development. Interest rates are insanely low right now, and that would be why I would go that route. The metro areas of Texas are only getting larger, and more populated. It's one of the best investments you can make.

With the interest rates as low as they are, I wouldn't put as much down either. Keep cash on hand and see what you can do with it.

My first house in S. Denton was $147k and we sold it for $250k about 6 years later. Bought the next house with the Better half for $270k and sold it 2 years later for $325k.

[Dale Moser]

If I was young and single, Id buy a **** box in a good area, and fix it up/modernize it.


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[bowhntrmatt]

Any of your options could be just fine. Just do something. Any house you stay in 5+ years will appreciate.

[Acameron52]

Man, I was in your same shoes this last year. I originally wanted to buy a house on a couple acres. After looking at 30+ houses that were already at the top of my budget and in need of work as well as over priced I decided to build! Found 4 acres in an awesome location with killer views and closed on it December 15th. Forms went up today for my Barndo and shop!!

[ken]

I would buy now for what you want to do long term. Interest rates are extremely low. Locking in a long term loan at a low interest rate makes a huge difference in your long term costs. It is likely 5-8 years from now interest rates will be a lot higher.

[Quackerbox]

Originally Posted by Goldensammy

If Whatever you do, don't become house poor, especially if you are married. This can be very stressful. Also, when making your decision, be sure to pay attention to property taxes and take those into consideration when you are house hunting. They vary from neighborhood to neighborhood, so do your homework. Best of luck.

yes, there is a guy in my office that bought a huge house in a nice neighborhood. He has 2 kids under 10. Both of their vehicles are paid off with high mileage. He cant afford to buy his wife a new car (he has take home) or take the fam on a vacation past conroe.


Dont max out your budget so you can only listen to peoples vacation stories

Originally Posted by Mayhem

Buy land and build as you go.

You can buy a house any time, but land, they ain’t making anymore of that.


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and yep

Ive been in my first and only house 18 years. It was a decent area when I moved in. Depending on what happens to the new development up the street things could get worse or better. Either way the homes in the area are selling at double what I paid for my house. And from pics online they havent update the homes like we have.

Wife and I bought 2 acres across the street from a lake 3 years ago and already have a barn on it. Both that and my home will be paid off before I retire.

[Mayhem]

^^^ sounds like your co worker need to put his house on the market and downsize.


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[twistedmidnite]

We purchased a home in the country on 6 acres. We lived there for 7 years, making a few improvements as we went. We sold it for $5,000 more than we bought it for. It was a win in my book.

If I had to do it all over again I'd buy the piece of property I wanted then live in a camper/barndo and build my house of choice.

[BLACKFINTURKEY]

We purchased our first home recently. Older house 1949, with 3 acres house was in good shape but in need of serious remodeling. Ended up having to re wire most of it and replumb most as well. With that being said we probably will be 45-60k all in renovations but even so the appraised price is still 40k more than our all in budget.

I would definitely look for something with a little land that’s what the buyers will want imo.

[gingib]

I am against building a new home at high prices, IF it's not your forever home

Buy used if your plan is temporary

[BlackoutRam2500]

Originally Posted by Mayhem

^^^ sounds like your co worker need to put his house on the market and downsize.


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Or cut up his wife's credit cards. My BIL makes $150k a year and is still renting after 13 years with his old lady. His rent is $1,800 per month, used to be $1,300 and either way he just can't save a nickle. His wife has maxed out credit cards, a high mileage upside down car, etc... etc. A spouse with poor money management will sink you faster than anything.

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[Mayhem]

Originally Posted by BlackoutRam2500

Or cut up his wife's credit cards. My BIL makes $150k a year and is still renting after 13 years with his old lady. His rent is $1,800 per month, used to be $1,300 and either way he just can't save a nickle. His wife has maxed out credit cards, a high mileage upside down car, etc... etc. A spouse with poor money management will sink you faster than anything.

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That’s his fault for letting it go on that long.


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