CA - Buy Now Or Wait? - Critique My Plan Please.
Just wanted to get everyone or anyone's opinions on the market in Socal (OC). Ideally I wanted to get a 2 unit/duplex but as I understand it - this would be very difficult for me since I am working w/ 100% financing (need a good deal of cash since the market is so competitive for multiple unit prop). I guess my plan now it to get a 3 bd/2ba condo for $350k-$400k and rent out 2 of the rooms. On a mortgage of say $2,000 I could rent out the rooms for $550 or so and make up the $900 difference myself. I would not have positive cash flow but at least I would be building equity for the future. Is this dumb? Should I wait till I save more $? Opinions please and thanks in advance.
Condo I probably could try and find a place around $350k - sfr would be a little higher but I guess I wouldn't have the association fees. The reason I'm still on the fence is b/c my rent is pretty cheap now - about $450 or so - if it were $700 or something it definitely makes sense but I feel it's more debateable since I have low rent and maybe should wait and save? What do you think?
It was a long while ago but I did something similar.
In my case I ended up paying more monthly in then I was paying in rent (before taxes). With the tax advantages I ended up at less per month after taxes.
I rented two bedrooms. They were strangers. Similar to how I would find roommates when I was renting in a house so I understood the process. I had control this time rather then being the one to interview to be the new roommate.
I bought a SFR. You can go the same route with a condo but you might find a SFR will be a better deal. Parking can be an issue if there are two roommates plus yourself.
Have the roommates sign a rental contract so the details are clear and if there are problems later you can evict or collect. You might think it will never happen. Trust me, stranger things have happened.
I would consider looking further out to make the cash flow work. Then again, when you look at the tax advantages you might find that the extra $450/m comes back from tax savings.
John
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