0 votes

HELP Fellow DPers! Recent College Graduate Debating on Whether to Buy a House or Not!?!

Hey DP family.

I am a 23 year old college graduate who is currently toying with the idea of buying a house.

First of all let me fill you in on my situation.

I have been living with my parents in their suburban home in Jacksonville, Florida since I graduated with my finance degree from FSU back in December of last year. I have been working for my father's business during this time and have been saving a lot. I make 500 a week after taxes and have managed to save over 3100 dollars of which I have been storing 100% in physical silver. I have just gotten confirmation that I have been hired to a very prominent mutual fund in town where my salary will be 600-700 dollars after taxes starting in June.

I may sound alarmist but the reason I want purchase a rural home is that I fully believe that we are going to have a full blown dollar crisis and that it will bring chaos and disruption on an unprecedent scale with food shortages, power outtages, and civil unrest. The suburban house my family currently lives in would be no place to weather this shiz-storm. The structure of my house provides a poor defense and the neighborhood is full of ignorant sheeple who wouldn't think twice to burn down a house to get another meal in their stomach.

I live about 20 minutes away from a very rural part of Florida where there are dozens if not hundreds of rural, secluded houses for sale. A lot of these houses are foreclosures or being sold at auction for pennies on the dollar. I mean I am talking a 3 bed 2 bath house on an acre + of land for way under 100k. My plan would be to liquidate my silver holdings as a down payment and finance (with a fixed rate of course) one of these rural homes in order to fority it and be able to start growing my own food. I am not too worried about liquidating my small silver position because my parents have a lot, and I mean A LOT, of physical gold and silver bullion that we bought back in 09 along with preservable food, water, and general supplies.

Now I know the argument that housing prices still have another 20% percent decline ahead and I do believe that they do, but what I'm worried about is rising interest rates. If interest rates start rising significantly in May or June, it will be difficult for me to finance a large portion of the home. I plan to go to the FHA and get a 4-5% fixed rate loan if I can (since the FHA doesn't have any significant lending standards or barriers I figure this is possible). And I know that silver is heading to the stratosphere in the near-medium term and that my silver holdings will skyrocket in value. But silver isn't worth anything if you cannot defend it as well as support yourself. My family also already has thousands upon thousands in physical gold in silver as it is.

So what do you think? Is this plan plausible? Is there a better way to finance? Should I even bother with a down payment and settle for a higher interest rate if I can? Is there anything I have not accounted for?

I really do appreciate that input guys, thanks ahead of time.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

I am a non college grad

looking to buy my second house, sold my first about two years ago. I am also looking for a house with some land, food will be priority number one, you can't eat silver. Go for a fixer upper, I am guessing in Florida the house won't have a basement, basement leaks in my mind our deal killers, so all you have to worry about is roof leaks causing mold, which should be easy enough to find. I say buy the house, but go for the fast payoff, my goal is to pay my next house off in about four years or less. I would love to pay cash for a house but it will not be achievable given my circumstances. I am looking at going to 60k tops, I am not going for the finance 150k keep up with the jones bullshit ever again. I am going to extend credit with the banks as far as I have to, I am going to pay off my credit cards and keep low limit ones to stay in their bullshit credit system, buy a cheap house and pay it off fast, and buy cars for cash, that is my goal. I am working to drop out of their system as far as I can take it. Growing food is one of my goals, wood burning fireplace in my next house is a must also, then will come the diesel generator, some solar, etc. Self sufficient, stay focused and good luck.

Those who expect to reap the blessings of freedom must. like men, undergo the fatigue of supporting it.-Thomas Paine

The R3volution requires action, not observation!!!!

I may disagree with most. If

I may disagree with most. If you can find a really good deal, buy real estate. NOT good financing terms on an overvalued property, but someone like me, who is selling 2 houses that need repair for like $37,000 for both. You can pay off the thing in 10 years (much less if u save silver..:) and you own a piece of land. No landlords or anything. That is, if we are not all glowing in the dark in a few years. Silver and devalued real estate are the only good investments left, imo.

Owned?

Does one ever really own real estate in the US? - what with land use restrictions and zoning, water rights (even rain water rights!), easements, and property taxes? Buy a house in an unincorporated area, and then some municipal government or district invents itself and puts you under its thumb.

I feel a lot more comfortable with stuff I can pack.

Ĵīɣȩ Ɖåđşŏń

"Fully half the quotations found on the internet are either mis-attributed, or outright fabrications." - Abraham Lincoln

Very good point Crickett. I

Very good point Crickett. I think silver will be up in the high 3 digits within 5 years. at that point you can pay the house off.

Do not buy now. RENT at this

Do not buy now. RENT at this time. You will be able to buy a 500k house in todays dollars for 50K in the next 5 years.

I have bought and sold plenty of real estate.

Made some big money and lost some money, but net big time profited, and had fun in the process. I now own only the house I live in, and own it only as a place to live, not as an investment, and I view it as an abandonment and a cost, not a source of wealth.

I want to tell you young people that buying property is more emotionally motivated, as opposed to being a logical decision. Listen to yourselves if you are cheering along some fool wanting to ruin his future or are considering the same plunge, or now are committed to a prior bad decision.

So get out of your emotional drivers and get real, or unreal as far as real property is concerned

Real estate is the worst investment you could now make. It is a busted market where most of the sellers are themselves emotionally invested, and desperate. They can't bring themselves to face reality and take their losses, so they sit and hold or ask a price that is nothing more than a fantasy of their properties former past, while imagining some future recovery that will give them the highest price they ever saw; and those foreclosing are even more oblivious to what is going on.

Why in the world would you place yourself in the position of a guaranteed loss for the next 20 years? Are you an idiot or a perverted masochist? Or do you just have most of your wealth tied up in real estate and want to cheer on any fool who would take your place?

As far as staying with an investment in silver, I have been long gold and silver since 2001, after having been short for years before that, and am now switching over to inverse bond funds to play the collapse in US government bond values. It is not that I think precious metals will collapse tomorrow, but I think we are close to a top, and I think most of you will be shocked by the collapse in the gold and silver markets and the huge discount on physical silver and gold at which most dealers will take these off your desperate hands when the crowd tries to exit the door in unison. We are much closer to a top than a bottom in gold and silver, commodities what have sucked in just about all that can be sucked in to support the delusion of hyperinflation, just like people were suckered into real estate before and before that the dot.com bubble, on and on as long as my old brain can remember.

Do any of you buy gold and silver or real estate other on the advice of some other fool?

"Bend over and grab your ankles" should be etched in stone at the entrance to every government building and every government office.

Nice screed

Nice screed, Henry, but you left out the part about a 23 year old anchoring himself to one small spot in Florida.

They say a rolling stone gathers no moss. I say moss is highly overrated.

Ĵīɣȩ Ɖåđşŏń

"Fully half the quotations found on the internet are either mis-attributed, or outright fabrications." - Abraham Lincoln

"Why in the world

would you place yourself in the position of a guaranteed loss for the next 20 years?"

Because I live in a crowded suburb full of sheeple with no arable land or natural water source. Once the trillions of dollars overseas come home to bid up prices here in the U.S. there will be chaos and civil unrest. No matter how much I have stored or prepared, if a gang or group can come up and take it from you it is worthless.

"A living Constitution is a dead one" -Ron Paul

You mean losing wealth in the country is preferable to

losing wealth in a city? Have you ever heard of renting in the country?

Again, I point out that you are driven by fear, and that is not a good basis for making a decision. Your statement about trillions of dollars in foreign hands bidding up prices is nothing short of insane as far as the market for the type property you want to chain around your neck; you think some Arab Sheik is going to compete with you for a few acres and a box? Did you even read or comprehend any of the references I provided you?

I know it is improbable that someone in a hyped up emotional state such as your will be able to break out and see reality, but my advise to you is to calm down, recognize that you are in a state of panic, and recognize that things take a long time to unfold; Little House on the Prairie is in the future, but navigating that future is made more difficult by squandering what little wealth you have on an ill advised, poorly timed, emotionally driven, foolish commitment.

As far as you expectation of civil disorder, you are close to being correct, but I point out that squandering your accumulated wealth too early on an ill advised investment likely will put you at more risk when you are evicted for failure to pay your underwater mortgage and move back in with your parents, minus what you threw away by taking the wrong path through the future.

I think I understand your mind set. I also know that sometimes you need to experience things yourself to learn, rather than listening to the wisdom of people who have lived before you; it doesn't become real until you fail yourself. Frankly, I don't give a crap whether you make it or not. I am just passing on information to you. I am well aware that if someone confronts another about his delusions, the likely result is to drive that person deeper into his delusion, so you are probably doomed anyway. Good luck.

"Bend over and grab your ankles" should be etched in stone at the entrance to every government building and every government office.

im sorta in the same boat in

im sorta in the same boat in that Im looking for houses. I am having the feeling that interest rates are going to spike this year. So instead of waiting to next year a month or 2 before I am married, I will get the house now. I have enough for a FHA loan down payment and have a good debt to income ratio so that I am not over leveraged.

My family has a farm so I am in good shape when it comes to shit hitting the fan. I can take care of myself.

***
But for the guy who is writing this. Go for the cheap houses in rural areas. Take a deal when you see it. Im aiming for 100k right now, which in my area is good enough for me and is the bottom rung for starter homes. Any lower turns into nightmares(I have looked at them already lol).

I don't know how much "fortifying" you have to do. But I would say having backup plans would be a good idea.

Inexperienced, "Fools rush in where agnels fear to tread"

~

"Bend over and grab your ankles" should be etched in stone at the entrance to every government building and every government office.

Make a deal that best fits your

circumstances and find a buyer willing to accept your terms. I would suggest against going in to debt to get your house. Better to live in a shack, save, and pay cash. With the coming effects of the recent inflation, your silver will be worth way more than that house. Give it a year or two and you'll be amazed at what that silver will buy.

Think outside the box. Why not find a house like the one you want to buy out in the country and make a rent to own deal? You could offer their asking price if the seller accepts your terms. Offer to purchase on a rent to own deal where you pay enough rent to cover the bank payment, taxes and insurance plus, say 10%, where the 10% and the security deposit becomes part of the down payment if you decide to buy at the agreed to price. You can transfer some of the risk to yourself by offering to forfeit the 10% if you don't come up with the purchase price in 5 years or something like that. A seller wont' be as leary to rent when the buyer has skin in the game. There's enough people out there that are trying to dump property that you shouldn't have a hard time finding someone who is appreciative of your offer. Landlords might like the fact that your committed for 5 years, etc.

Or something like that.

You have use of the property and the silver (what you want) but you can still walk away if the neighborhood gets bad.

Wait until you have a larger

Wait until you have a larger down payment and more savings. Don't leverage all of your savings on a house, especially with the uncertainties surrounding the housing market. Right now, save, save, save, and save more.

Mortgages are cash flows for the bank, unless properly managed. I'm in your position too. Just graduated from USF with an accounting degree and CPA. I'm living at home and saving 90% of my paycheck for a year and investing it in commodities.

**This is just my opinion!

"The economy's not a class you can master in college. To think otherwise is the pretense of knowledge."

Ah we have a bull here,

I was at the game when you guys came up and beat us like 2 years ago. Hope to play you guys again soon, and actually win this time.

Question tho. I am doing basically the exact same thing as you by saving most of my money and investing in gold and silver, but what are you gonna do when civil unrest gets here and hungry mobs with molotov cocktails go looking for their next meal? Would you be prepared?

"A living Constitution is a dead one" -Ron Paul

Indeed. :D that was a good

Indeed. :D that was a good game!

I don't think that civil unrest will happen, not yet at least. I think there is a better chance of a Euro type currency being introduced. Just stick to what your doing. If you plan on using debt to finance some type of asset, I'd look at debt financing gold or other metals. Also, look into purchasing stock for metal mining companies. The housing market right now, to me, is very unstable and I believe will continue to fall, especially when QE2 is done.

The number one thing I'm doing is protecting my wealth from inflation and saving. I tend to monitor alternative sources of data though shadow statistics. (http://www.shadowstats.com/)

I do grow food though, you never know and its pretty fun!

"The economy's not a class you can master in college. To think otherwise is the pretense of knowledge."

Buy The Land

Put a make shift shanty on it if you must. And build your own house. This way you can design 'extras' in it. Such as extra storage areas, a tunnel or two just in case. And hire someone who thinks like you do..that government is way to big. This way, not all that you build will show up on the plans you have to submit. Just make sure things are hidden so well, it takes you time to learn them all.

I believe in Hope & Change..I Hope the government will Change
Spindale-Rutherford County-North Carolina

You may not need a permit

if you simply put up a barn or a garage. These buildings could have special hidden features (garage with a hidden basement, etc.) that would serve as emergency shelter. You could put in a well but remove the submersible pump after testing it and hide it. (There are pump thieves who will remove a pump from an unguarded well or even sneak in at night and take it.) Hide anything of value until you actually move there.

Question: How far from the city do you feel is safe? James Rawles (survivalblog.com) says you should be further than a gas tank's worth of travel distance away from a population center and well away from any main routes of travel. If things happen suddenly though, you will need to have enough stored gas and gas cans to carry with you that you can make it to your retreat without depending on buying gas along the way.

New Hampshire and Ecuador.

Thats the thing

My work is on the east side of jacksonville while the houses I'm looking at are below the southside of jax. (Note: Jacksonville is the largest city in the US land-wise). We are already talking atleast a 45 minute drive to work at these distances. The places I am looking at are about 40-45 miles away from downtown Jacksonville with the next population center closest to me (population maybe 5,000) about 20 miles away.

This area is very sparsely populated and mostly untouched.

"A living Constitution is a dead one" -Ron Paul

God that would be amazingly fun

as well as useful. Just have no idea how long that would cost or how long it would take.

In a short amount of time civil unrest will hit the shores of the U.S.. I just don't know how much longer we have to prepare.

"A living Constitution is a dead one" -Ron Paul

Wait a few weeks and do some more research ...

There are some great subsidies out there for first time home buyers. Look into that. You will have your money confiscated to fund it, so you might as well take advantage of it.

Also, Banks want your last W2, your last two pay checks, 20% down, and you need to be over 700 on your credit score.

Also the bank will not like it if your payment exceeds more than 24% of your take home.

Also, they want you to have worked at your job for at least 2 years.

I don't think the banks are being unreasonable and I would suggest these things for any first time home buyer.

Remember this above all else ...

You have no idea how expensive it is to own a home. Utilities, maintenance and repair, insurance, taxes, lawn mowers, landscaping, water and sewer bills, and the annual emergency, big ticket item, repair like a roof, furnace, water heater, termites, etc.

You should have an emergency fund set aside of at least $3000.

You still have about 1-2 years before the bottom hits.

My suggestion is to rent a home for a while to get your feet under you.

What if I go through the FHA?

Do you think the FHA will be less stringent with the requirements than a bank? I know my parent's got a loan from the FHA no problem and their credit is certainly less than sparkling.

My credit score is 710. I have had three credit cards since I was 16 and have paid the balance down to zero every month without fail.

I honestly think I could get financing for one of the 50k houses I am looking at but you bring up a real good point. OWNing a house is insanely expensive. I mean we are talking mortgage payment, insurance, taxes, utilities, cable, internet, maintenance and repairs, sewage; all on top of gas, food, health insurance, car insurance, and unforseen cost I'm sure to have.

I might just rent a place at the beach and surf until I have a decent amount of wealth saved up. I just don't know if chaos will reign by then...

"A living Constitution is a dead one" -Ron Paul

Go to your local bank and see if you ...

pre qualify.

Another thing you need to do is ask about assignment.

Is your loan going to be sold, and if so will your bank still service the loan?

I know this is going to sound insane to you but this is real life stuff ...

If your bank is not servicing the loan and they hand it over to BAC or some other big servicer, I can 100% promise you that they are going to try and throw a forced escrow at you after the fact to see if they can force a 30 late hit on your credit score. They do this so that you cannot refi away from them because it really dings your credit and they also want to see how tight your running. If they think you are running tight, they sit and wait for you to build up equity, then they will use the forced escrow again to see if they can initiate a default and a forclosure.

This is not conspiracy stuff ... The big banks have been found in the court of law in several states to use these tactics.

If I were you, and I were single, and I am not expecting kids anytime soon, I would not buy.

Your beach house comment just shows me that you are not serious about this.

I am not saying this to take you down a notch, I am just saying that a step like this is a life changer.

And if you don't want to change your life then you are not ready for a home.

Great advice DPers

I have a good view of both sides of the argument.

On the one side, buying a house would be good because I can modify/fortify the house and tear up the yard however I want. I would get a deduction on my taxes as well as security knowing that if I did lose my job, as long I could keep up with taxes, I would have atleast a year and a half to squat in it.

If I do decide to take the plunge, I am currently leaning towards a very small down payment with a higher rate. Either way the rate will get demolished by hyperinflation someday, but at least this way I wouldn't have too much skin in the game if I lost my job.

I'm worried about waiting due to rising interest rates. Rising interest rates will lower housing prices if you pay in cash but will make it more expensive if you are buying with credit. If I plan on financing a large portion of this house, that would be a problem.

Some reasons not to purchase the house is the trap that a mortgage has over you and the inflexibility of it. Also I'm sure housing prices have a long way to go down.

I am just gonna keep looking for a good deal as well as keeping you guys posted.

Keep it coming guys.

"A living Constitution is a dead one" -Ron Paul

I'd buy some land and put a travel trailer on it

that way your cost is low and if you need to go you can take the home with you. Just hitch up and you're gone.

I have a house and wish I didn't. Not much flexibility.

Exactly

Exactly what I was going to suggest. We also have a noose of a house around our neck and are trying to unload it in order to get something more peripatetic.

Colchester, New London County, Connecticut

.

That is a great idea.

I was thinking that he should just rent a cheap studio and keep buying silver.

Do they have big ones?

Its got to be big enough to house my 5 person family. They are all helpless sheep.

"A living Constitution is a dead one" -Ron Paul

.

Then yes. Get land first and 3 trailer houses on land. If they are sheep then put them to work sewing, farming, art, and whatever skills they can contribute to pay off the debt quickly. Sell all goods under the table. When you pay taxes you are contributing to the sinful actions of our governments. Work for elimination of property taxes and you and your family can be a wealthy family indeed.

My goal is to have hemp legalized and then growing it on some land and I will tent it to manage it when I am not with my daughters in my Grand Junction house.

Fiber/Fuel/Food/Freedom

We're looking at the Open Range 427

Lots of room, great galley...great layout.
http://www.genuinerv.com/2011-open-range-427-bhs-TX-i240533

Colchester, New London County, Connecticut

This is the way I look at

This is the way I look at it...if you can buy a house with little or nothing down..go for it...you said you were going FHA..not much needed for down payment. My point...when there are no jobs...no one will be making house payments..you can either lose a little or lose a lot...if your house is paid for.. and you lose your job..you could lose a 100k...just like that because you couldn't afford to pay your property tax...
it's better to walk away from not much than it is to walk away from everything.

"and the truth shall make you free"
John 8:32