Author Topic: Should I buy a house?  (Read 2015 times)

I_am_DLR

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Should I buy a house?
« on: March 18, 2013, 04:22:26 PM »
Ok, so here's the story. I'm a pretty new mustachian. I'm almost debt free - about $500 credit card debt that should be gone in another month or two. I've got basically zero savings. All the cash I had saved up got dumped into my business that I started in January. I'm supporting two people on less than $20k/year take-home from my still full-time day job right now. I'm hoping in the near future that my business will start to bring in around $2k/month gross, and jump a substantial bit higher than that once I leave the day job behind. My significant other has a chronic illness and can't hold a steady job in her condition at present.

I recently came into an opportunity to purchase a house. I'd be paying roughly $90k for it. Assuming that zillow is accurate the house is worth roughly $140k. So, I'd be stepping into something like $50k in equity. I know what you're thinking, what's the catch? The catch is it's the house I grew up in. I'd be purchasing the place from my mother - the Queen of All Anti-Mustachianism. As of late I'm coming to the conclusion that she doesn't even know how the concept of money works. like, I think in her eyes she just gives money without any sort of numerical amount attached to it, and in return she gets stuff. Anyhow, she's recently figured out that she can't afford this place anymore due to a huge pay cut. She's decided to sell the place. Why she's willing to sell it to me for the pay-off instead of getting full-price on the free market, I dont know. I guess she wants to keep it in the family.

I'd be stretched super thin if I bought the house. Of course, I'd be looking for a room mate as soon as I could get one to help. So, I'm looking for a sanity-check here. I'm already broke, and working 80 hours a week trying to get a business off the ground. Is this worth the added stress? There's bound to be some things I haven't thought about, and I'm sure I've left out some information. What do the mustachians think?

Another Reader

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Re: Should I buy a house?
« Reply #1 on: March 18, 2013, 04:35:40 PM »
In your shoes, I would help her spruce the place up and get it sold for top dollar, with the agreement she puts the proceeds into retirement savings or something else off limits.  You are not helping her by buying it for less than market value, and she could be thinking of moving in with you at some point.  Where will she move once the place is sold?  Can she find affordable housing on her current income?  Get this resolved before you do anything.

Zillow is only right occasionally.  It can easily be off by 30 percent.  Talk to a knowledgeable agent that works in the area to get a market value estimate and the supporting comps.

smedleyb

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Re: Should I buy a house?
« Reply #2 on: March 18, 2013, 04:39:56 PM »
Will you just pay off her loan, or finance the purchase on your own terms?

Christiana

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Re: Should I buy a house?
« Reply #3 on: March 19, 2013, 06:12:55 AM »
Your significant other might qualify for some disability benefits--maybe.

This is probably is a terrible idea, for all sorts of reasons, but what if you and the SO moved to live in the house with your mother?  Or you buy the house from your mother, and she lives with you?   Is the house big enough to be separated into two semi-independent living spaces?


I_am_DLR

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Re: Should I buy a house?
« Reply #4 on: March 19, 2013, 12:28:13 PM »
Another Reader - that was my original idea, and that's what will happen if I end up not buying the house. She's got it stuck in her head that it should stay in the family, so she's pushing me to buy the house. Well, I say pushing. If I could easily afford it, I'd do it in a heart beat.

Smedley - I'd be taking out my own mortgage. I'd be paying a good bit less that way, and I certainly couldn't afford taking over her payments.

Christiana - we think she does, and we're fighting our way through the red-tape to get it taken care of. Moving in with my mom isn't an option - on her end or on ours.


I talked to my bank today about a mortgage, and it's gonna be a good bit more expensive than I estimated as far as coming up with a down payment/closing costs/etc. So it looks like I'll be helping her to get the most money she can out of it. Thanks for all of your input though!