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I know the real estate business, I know property management, I know that everyone has to live somewhere.
Read the Millionaire Real Estate Investor by Gary Keller (of Keller Williams) - I think it's a great book that puts first time investors on the right path.
I concure: Pick C. Rent and park your money in a money market for now.
If you are moving out of state you need a month to month rental agreement in order to give yourself time to explore the area.
Keep renting. Saving lots of money in my area. The rent to own ratio is WAY favorable to renters. Prices haven't dropped much yet, only about 35% from peak. I anticipate prices down 50% from peak. In the meantime, nothing is selling. Forclosures are increasing. Inventory is at a record level. Many are REOs and are coming on the rental market. These are very nice executive style homes and they still can't find renters. Lots of nice houses for rent! Just check craigs list in your area; you'll see what I mean.
Potential sellers are advised to stay out of the market if they can. As a buyer, the market is very favorable. Prices are still dropping and no sign of a bottom. The end of summer is at hand with record inventories still available. I'll keep my theoretical 100K in an indexed mutual fund and start looking at housing in April or May. Haven't looked at a single house yet. My target is to buy a house in early 2010 or 2011 but only if prices are rising by then. I don't plan to buy into a falling market.
It seems the consensus is to rent, which is probably a prudent advice given the market situation. People disagree on how to invest $100k, which is itself a very difficult question.
Can anyone give a scenario where buying a house might work?
I heard/read somewhere that the only houses to buy right now from an investment standpoint are the ones that fall under "the Four D's"
Death
Divorce
Default
Distress
In theory, those homes are priced ahead of the market and therefore, you can get the Spring 2009 price today. The list feels fairly predatory, but it is what it is.
I also have a few relatives in banking/finance. They advise only buying estates and foreclosures right now. Everything else is overpriced. Another said to just keep offering 20% off list until you get a "yes."
My own tactic? Find a house you can afford that you love so much it won't matter to you if it drops another 15-30% in value and you never get your money back.
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