anyone with financial knowledge see if u can give me some insight

[87grandnat]

I am 24yrs old, my dream has been to get into real estate for the longest and i am kinda in a bind as what to do, i want this so bad that i want to go ahead and try to purchase a house very soon (to rent or sell, probably rent) and am not sure if i should because i have a credit card with 10k on it that i owe, I was gonna save up money pay the card off then try real estate but, i really want to save up money and buy a house. Is this a bad idea? i know that paying off debt is best before going into more debt, but i would hopefully be making an investment and not so much be going into debt.
I know that some of you have done things like this as far as entreuprinual (sp?) moves you have made, so i hoped someone could kinda tell me if this is a safe move or not.

Thanks for any and all help,
Joshua

 

[GNRick]

I think you should buy a house since you gotta live somewhere so you might as well be building equity. Unless you're living with Mom and Dad for free, of course. Probably the best way to make real estate pay is to buy a duplex and rent out one half. But you have to be able to cover both sides for when it sits vacant. Another thing to look at is property taxes, maintenance, and the power bill. If you can minimize these, you will come out ok. So don't buy the biggest house, as it will take more maintenance and the power bill will be high. Another rule of thumb is to purchase the cheapest house on the block, since it can only go up in value. Make sure you get the house inspected first- someone who knows roofs, electrical, etc is a necessity. When I bought my current house, the seller had a nice inspection report which covered everything, plus the house is only 15 years old so things haven't had time to go bad yet. And one last thing- landscaping can be as expensive as a Grand National. Try to find a house with nice trees and bushes already there. Good luck!

 

[The Blob]

Financial lesson #1 - Credit card debt is bad

The $10K in credit card debt may prevent you from qualifying for a loan. Depends on your income. If you can get a loan buy a house... then pay off the credit card.

 

[Pronto]

10k of cc debt is going to hurt your borrowing power plus it's non deductable. I would make a plan to concurrently pay down that debt and save for a down payment, even if it means living with your parents for a year or something like that. Once your debt free you could look for a multifamily and live at it while you fix it up and rent it. The housing market might cool alittle while your paying down your debt so that might help you qualify for a house too.

 

[hbsky]

If you can get a loan with payments that will be smaller then your current rent, then it sounds like a good idea. If you are buying something to rent out and living elsewhere, make sure that you can cover at least 6 months of non-renting/mortgage cash. I had one of my rentals sit for 7 months before it rented two weeks ago. Depending on where you live, alot of markets have taken a little dip, so you might get a bargain.

 

[GNRick]

If he can find a house selling for $10k under appraisal, he might be able to get a large enough loan to pay off the credit card. :smile:

 

[87grandnat]

^^^^^good ideal! i appeciate all the info, keep it coming, but some info about my situation....i will make close to 50k next year, so i dont think getting a loan will b a big problem dispite the cc amount, and where i stay now i only pay about a hundred dollars a month in rent so i am n a good situation to try to do something like this and am tired of waiting, i am getting to the point that i feel like i need to stop being affraid and go for it, if i lose everything, hell at least i tried, i read in a magazine about a month ago about guy that was 23 years old and owned 7 rental propeties! i was pissed when i read that because i feel like it could b me if i would just go for it! but i am always wanting to get in the best situation possible

thanks for all info,
Joshua